The xAI piece is the one that stands out to me. $258B for a lab that's burning $1.46B/quarter against $430M revenue, valued almost entirely on a merger anchor from four months ago.
As I wrote in the piece, I'm extremely skeptical that xAI should be valued as if it is a frontier lab.
But as you say, going back to the xAI + SpaceX merger, analysts consistently seem to value it as if it is, so I predict the public will too, at IPO time.
I assume "extremely skeptical" is you being generous, is there anybody other than Elon who says xAI/Grok are SOTA? The only thing anybody says about it is that it's only good for porn, but local models do porn too so xAI has no moat or edge at all as far as I can see.
There is actually a real bull case for xAI (that I don't endorse), e.g. from people who think that chips & computer is the main determiner of model quality. xAI may plausibly soon have the biggest training apparatus of anyone.
> I assume "extremely skeptical" is you being generous
I'm not sure that's the case. Every value in this forecast is absurd, I actually think the author is sincere in there feeling that they are being extremely skeptical.
If you don't spend any time comparing models to the point where you don't know about benchmarks, why do you care where people think the line for SOTA is?
The benchmark game is wholly gamed, but the proof is in the pudding. I know people using Anthropic, OpenAI, and Gemini. Chinese models locally. But who uses Grok for anything but porn? Whatever the benchmarks might say, Grok is just trash in practice. They spent too much time teaching it to be edgy and not enough time teaching it to code.
Most of the numbers seen arbitrary to me. Why is Starship worth $170bn? Based on what analysis? Why 38x earnings for Starlink? Maybe the AI has some justification, but the way it is presented just looks flimsy.
Even if you think those are standard numbers and you're banking on growth, or whatever, I don't see any way anyone rational (or even a semi-rational AI bull) could convince themselves xAI isn't an absolute garbage company.
It’s absolutely ludicrous that xAI is thrown into the mix at that valuation. They’re not even a player in AI other than providing Grok slop for twitter.
What do you mean $380B? This "fair market value" forecast also includes $147B for starlink enterprise and $75B for starlink direct-to-cell. So almost $600B all in.
> Starlink Consumer Broadband at $380B (9.2M subscribers, ~38x revenue)
I mean that Starlinks consumer broadband is valued at ~38x revenue, when other telcos are valued around 1.5x revenue. That revenue is 2533% more expensive, why pay such a big premium for something that's essentially the same?
Starlink is less than 10 years away from providing full data services to cellphones globally, allowing them to offer a better service at a cheaper rate to AT&T and Verizon. Not to mention more coverage.
Also, AT&T and Verizon customers don't love their provider. They despise them. I walked into a Verizon store last year and was outright scammed by the staff member into their insurance plan after explicitly declining it (they just added it to the bill anyway).
> Starlink is less than 10 years away from providing full data services to cellphones globally
10 years is a long time, considering the global reactions to America under Trump, and also Musk's tight coupling to Trump, and even in the US given how many bridges Musk burned.
If Starlink was properly spun off and independent of Musk this would be much less of an issue, but now? Now the rest of the world is likely to treat it like the US treats Huawei.
