Population numbers in all areas where this is widespread exploded after the introduction of efficient agriculture from outside. Like if lack of food was the root problem, we would expect population in these places to be decreasing, not increasing, right? Something other than food scarcity is at play here.
Ok, Metaverse and AI didn’t work out. But maybe betting billions on the Next Big Thing, while your actual product is descending into anarchy will pay off!
Meta's goal is to stop OpenAI, Google and/or Anthropic from shutting them out of whatever AI ends up delivering. This is why they went with open weights for LLama - it prevents the other players becoming gatekeepers.
This is part of a pattern of tech leaders investing in order to avoid getting shut-out of whatever the next paradigm of computing is supposed to be.
- Google building Google+ and stuffing social into everything to avoid getting shut out of social networking. (The fear Larry/Sergey felt about this is why Vic Gundotra could bully and survive scandals until it became clear that Facebook wasn't an existential threat/Google+ was not going to really compete)
- Meta attempting to build an AI assistant because they were afraid Alexa/Google Assistant/Siri would be how everyone accessed computers in the future (due to technical failure, this product only ever launched as control mechanism for Oculus, but the ambition was larger)
Of course this always come alongside other factors that lead others to follow when a new concept is proven; however a tell-tale sign that leadership is worried about market dominance rather than a mere new line of business is that they spend or throw weight around above and beyond what the new line of business alone would justify.
I think Zuckerberg understands something that most people on this forum seem to not understand at all.
Facebook, Instagram, etc... these are all only valuable as network effect monopolies.
Investment into AI can torch billions of dollars and still be worthwhile so long as it's done in the service of protecting those monopolies, because LLMs are both intrinsically threatening to Meta's existence and intriniscally valuable for building better recommender systems when platform monopolists like Apple add privacy protections (cutting Meta off from the data spigot that powers its revenue streams).
Once AIs with no wallets outnumber humans on Facebook, Meta has an existential problem. There is no way to avoid the inevitable, the best one can do is embrace it, and 25 billion is nothing compared to losing your platform.
> Usage their customers would not pay for if it did not have a positive ROI.
I don't think we can assume that's true. Their customers are paying for it, but we don't know how profitable they are being with the AI compute they pay for.
>Zuck... “the right strategy to aggressively frontload building capacity” as part of the tech group’s bid to be the first to build artificial superintelligence.
There's one problem. They seem unlikely to be first to build ASI given that Google and OpenAI seem a fair bit ahead and there's stiff competition from xAI, Anthropic, DeepSeek et al.
The leaderboard seems to have Google, OpenAI and Antropic ahead, then X and four Chinese firms, Z, DeepSeek, GLM and Kimi, with Meta behind that.
I'm not sure if they have a decent strategy to get ahead? It seems to me the best bet would be to have some very smart people do a better algorithm rather than building more data centers.
Meta has $43 billion in cash and cash equivalents as of December 2024 [0]. What is the reason for not using part of those reserves, and issuing debt instead, costing them hundreds of millions in fees to investment banks and bondholders?
Also, if they are issuing bonds to the public, does that mean that private lenders aren't lending any more?
The numbers are stupid yes but it's weird to me that Meta is bearing the brunt of it while Nvidia, Amazon, Microsoft, Google, OpenAI, Anthropic and all the rest continue to be rewarded by investors. If/when the bubble bursts everyone is going down.
It seems Cloud and Datacenter is still in demand and are outstripping supply. Something I just dont understand. Where are they all coming from? It cant just be AI. I really wish there is some explanation of these capital investment.
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[ 4.0 ms ] story [ 37.1 ms ] threadWhy is Oracle going into debt for AI? What are they doing
Even just to save face, I would have expected one of the billionaires to have started a foundation tackling the problem in some way.
I totally understand what OpenAI and Google are trying to do with AI but I never understood Meta's angle.
What's Meta's AI product?
This is one of the most important future uses of what we today call chat bots and "AI".
This is part of a pattern of tech leaders investing in order to avoid getting shut-out of whatever the next paradigm of computing is supposed to be.
- Google building Google+ and stuffing social into everything to avoid getting shut out of social networking. (The fear Larry/Sergey felt about this is why Vic Gundotra could bully and survive scandals until it became clear that Facebook wasn't an existential threat/Google+ was not going to really compete)
- Meta attempting to build an AI assistant because they were afraid Alexa/Google Assistant/Siri would be how everyone accessed computers in the future (due to technical failure, this product only ever launched as control mechanism for Oculus, but the ambition was larger)
Of course this always come alongside other factors that lead others to follow when a new concept is proven; however a tell-tale sign that leadership is worried about market dominance rather than a mere new line of business is that they spend or throw weight around above and beyond what the new line of business alone would justify.
Facebook, Instagram, etc... these are all only valuable as network effect monopolies.
Investment into AI can torch billions of dollars and still be worthwhile so long as it's done in the service of protecting those monopolies, because LLMs are both intrinsically threatening to Meta's existence and intriniscally valuable for building better recommender systems when platform monopolists like Apple add privacy protections (cutting Meta off from the data spigot that powers its revenue streams).
Once AIs with no wallets outnumber humans on Facebook, Meta has an existential problem. There is no way to avoid the inevitable, the best one can do is embrace it, and 25 billion is nothing compared to losing your platform.
"The social media group had hired Citigroup and Morgan Stanley to raise up to $25bn in debt, ranging from five to 40 years in maturity, "
Together with the debt payments needed then, this will do wonders for the stock. I’m sure.
https://x.com/JonathanBeuys/status/1984882268817519036
That is revenue from real world usage of their datacenters. Usage their customers would not pay for if it did not have a positive ROI.
A pretty stable growth of 30% per year for the last 5 years. At a current level of about $50B per year.
What is the value of it, if it continues like this for another decade? Revenue would be at roughly $1T/year then.
In the face of this real usage and the growth of it, spending tens of billions of dollars on building out infrastructure looks ok to me.
I don't think we can assume that's true. Their customers are paying for it, but we don't know how profitable they are being with the AI compute they pay for.
There's one problem. They seem unlikely to be first to build ASI given that Google and OpenAI seem a fair bit ahead and there's stiff competition from xAI, Anthropic, DeepSeek et al.
The leaderboard seems to have Google, OpenAI and Antropic ahead, then X and four Chinese firms, Z, DeepSeek, GLM and Kimi, with Meta behind that.
I'm not sure if they have a decent strategy to get ahead? It seems to me the best bet would be to have some very smart people do a better algorithm rather than building more data centers.
Insider trading ? /s
Also, if they are issuing bonds to the public, does that mean that private lenders aren't lending any more?
[0] https://finance.yahoo.com/quote/META/balance-sheet/