>> “I’ve been thinking about writing an essay on the kind of mistakes that are made by college graduates booing or otherwise dissing AI,” he said. As if speaking to all of Gen Z, he added: “You guys have the opportunity to be generation AI—where you come into the workforce saying, ‘I know this a lot better than all of you"
Quite patronising. Maybe they really do know it a lot better than you, Reid, but not in the way you think. Maybe they see through the hype and hustle culture and are more interested in working towards fulfilling lives and jobs.
It's time to give up your silly cynicism, embrace being a professional slop shoveler and doing work with higher volume, more repetition and less creativity than ever.
I'm old too, it isn't about that. He's desperately trying to guilt young people into glomming onto his profoundly uncool thing by playing on some ancient "digital native" trope. It's, well, some boomer type shit.
This is largely escapism because the current paradigm of growth is ending, rather messily. The definition of living well is going through a forced change, and adjusting is hard.
Someone like Elon being asked for their opinion on tech - I kind of understand - was at least at the coal face of SpaceX and Tesla for a time, seemed to understand the tech and was not terrible when it came to direction.
Zuck I'd get, Bezos, Dario, Sam - but I don't actually get why Reid is always in the conversation - he's never been in front of anything
Not commenting on Reid specifically but on the other hand I don't understand why we should listen to the Tech CEO's / Founders about their opinions on the tech they are selling.
Since you're not picking up on a social subtext, "we should not listen to them" here means "don't be influenced by them" or "don't take their words as granted". In other words, we should be skeptical, not literally shut them out.
To be truly impartial I don't think you should even evaluate their claims directly. This allows them to focus the comparison on things they care about, not the things you care about. Instead you should decide what problems you need solving, and evaluate solutions to those problems against your own rubric.
So, a guy with probably one of the largest incentives in the world to trash xAI is trashing xAI?
The information content of this is rather minimal. Even if everything he says is literally true it's hard to tell through the massive, massive vested interest he has.
And it doesn't help that...
'Hoffman, who is an investor in both Anthropic and OpenAI, pushed back firmly on the narrative that the two companies are in a zero-sum race. “We tend to want to tell these stories as cage matches,” he said, as in two companies enter and only one leaves, but “in fact,” he claimed, “there’s a lot of room for both of them to win incredibly.'
that's clearly a very self-interested gloss on the flip side of the situation. Yes, that's in the possibility space. No, I would not consider "both companies do fantastically for many many years" as a terribly large part of the possibility space. Look to all of the many past instances of industries starting up. It is a very common case that if you take the two early leaders you aren't looking at who is going to be the two biggest companies in 10 or 20 years. It is in fact a common case that neither of those companies are the leaders in 10 or 20 years. The sheer staggering size of the AI training moat at the current time may lock in the possibility that no other business could possibly overtake them... but what if somebody solves that massive training gap? It probably isn't mathematically fundamental; I can't help but observe that humans do not get to their level of capability by pouring the entire Internet through their head several times.
He probably does know a lot of things most of us don't know, but I doubt he's sharing very many of them in this article. This is just trash talk.
The AI labs have somewhat the same problem that publishers have. Essentially their asset is a static piece of IP: a huge file full of numbers. They’re like a publisher only letting you read their book through some scuzzy Flash reader UI because they have to protect that file at all costs. At some point the weights get out/get reproduced and then what they have a is bunch of sunk costs.
Is xAI being used by any professionals? I see them acting as a data center rental service for the others, but that doesn’t justify their valuation imo. They seem to be behind on everything and don’t seem to have any relevance. The cursor purchase may change that but for how long?
I see no reason any portion of SpaceX justifies its current valuations. I also think taking what is probably ultimately a successful and profitable company in SpaceX, even if it is maybe not as successful and profitable as Elon might say, and tying it at the hip to the AI bubble, while being clearly on the losing end of that AI bubble so far, could well kill SpaceX in the process. I hope not, because no matter how HN may feel about Elon, SpaceX has some great tech and is definitely moving space tech forward. Rather harder to say that about xAI.
But then I'd say I don't understand the valuations of a lot of companies right now. It seems to me the stock market has written into its structure the idea that United States companies will be claiming something like 500-1000% of all TAMs in the entire world in the next 10-20 years, which seems unlikely to be the case. SpaceX's claimed TAM of "pretty much the entire United States GDP, you know, why not" is merely the most blatant instance of this.
I'm not defending SpaceX or xAI. Billionaires don't need my help. But this article is still pretty pointless. Hoffman isn't a dispassionate observer, he's one of the players. Of course he's telling everyone he's going to win and the other guy is going to lose. Even when a coach is completely objectively correct when he says in his pre-game press conference that he has every confidence that his team will win in the end, it's still an information-free statement.
>So, a guy with probably one of the largest incentives in the world to trash xAI is trashing xAI?
He's just stating the obvious, so I really don't see this as contentious.
xAI is irrelevant. It's so irrelevant that after being relegated hardware from Tesla, then pushed into Twitter to try to make that have value, then pushed into SpaceX because Elon Musk somehow gets away with hilarious levels of securities fraud, now it's basically reduced to renting out hardware.
Yes, xAI is irrelevant, and Hoffman is just pointing out the blatantly obvious. Its only value is in renting out hardware that can be better used by more capable orgs. It is basically a scalper that happened to get loads of nvidia hardware pre-orders in just before the AI run-up, and the entire SPCX scam relies upon everyone trying to buy usage of it.
I truthfully don’t know the answer, but if I had to guess, his connections and positions provide him with an unusual amount of knowledge and perspective. Another might be that his opinions often are correct in hindsight.
Elon said we should spend most or all of our GDP building more silicon than we can actually make to launch it all into space where we had no meaningful solution to economically cooling it burning all of our money for a product that currently makes no money delivered in a fashion that can't possibly work. It's not clear that he understands AI or rockets.
Remember prepared statements can be written by smarter people. Ask him to speak extemporaneously and find out how stupid he really is.
Guy who sells trips to space says we need to put more stuff in space. AI is hot now, so he has to connect his business to AI. Remember when he put a car in orbit? This is more of the same.
Reid Hoffman isn't relevant. Don't attack the person, attack the substance of their argument. How is xAI not a total shitshow? This is the question you need to be able to answer.
They're all clowns. None of them are credible. TBH this extends much further down than the C-suite. Generally it seems like something happens to people's brains when they hit roughly Director+ where they just start spouting absolute nonsense.
I'm not interested in people's take on SpaceX this early after their IPO, they have an ambitious vision and Elon Musk gets a lot of blind hatred. You don't invest into SpaceX to see returns in a month, you're in it for the next five or more years or you're better off finding a different stock to invest in. To date SpaceX is the top leader in getting things into space for the lowest cost, everyone else pales in comparison.
People don't invest in SpaceX because of space launch capability, that barely counts for their valuation at all.
The valuation of SpaceX is due to AI, namely the revenue they get for renting out their GPUs to companies that actually have AI customers, as their own AI tech has not panned out.
For the large number of companies rolled into SpaceX, they are all failed attempts to grow large enough to justify their valuations, and when a company fails to do that it just gets rolled into the conglomerate as a way of hiding the failure.
Tesla's valuation contrasted with its performance means that Tesla will likely be rolled into whatever latest vehicle of Musk's has the most attention, hiding the failure of Tesla to come anywhere near to its promises.
Other than launching satellites, being able to get things into space for the lowest cost is about as relevant as being able to get things to the bottom of the ocean for the lowest cost.
It's never going to be cost effective to send anything back down the gravity well, which means that the only way Musk's plan leads anywhere is if he's able to bootstrap an entirely self contained, self perpetrating economy in space. That's not happening in five years.
Edit: and no, data centres in space are not the answer.
Star Link is the main thing which increased the payload to space significantly.
Star Link only has 10 million customers and every few minutes a satellite handover is happening which makes it hard to use for video call (was my experience at a friend's house)
While this business is paying of right now others will get into it too and destroying SpaceX margin (china etc)
Now what else on payload is there? Ah yes Datacenter.
It would take 300-400 Sparship launches alone to get a current 200-300Mwh DC into space alone.
Starship doesn't deliver yet what it needs to be able to do. Neither on payload side nor on cost reduction due to reuse.
A DC will be cheaper on earth for a long time as long as earth is as empty as it is especially for areas which are just dessert.
It would be a lot better long term investment to just build its own Datacenter city in the dessert as ai doesn't need that low of latency and use everything realtime in the other Datacenter we already have.
SpaceX Elon musk fantasy is 50-100 years to early.
This article encouraged me to look at the investor materials [0].
The 55th slide "key metrics" wording stood out to me:
> AI: "Nameplate Compute Draw" Total number of GPUs installed in the data centers at the end of a period multiplied by the respective all-in power draw, reflecting installed capacity and not actual power consumption or utilization
Close to $15 billion in losses since 2023 and not much clarity on actual usage or impact. TIL the plan of record is AI satellites assembled on the moon.
Reid Hoffman hates Musk. Think what you will of Musk (we all have our opinions), but Hoffman criticizing one of Musks companies is the equivalent of Steve Jobs criticizing Windows. Its a personal quibble and therefore not really news worthy.
This is not a very good comparison because Jobs was well known for very pointed and accurate critique of software, which was one of his super powers at Apple. Bill Gates was known for figuring out how to manage software engineering, but nobody would listen to Gates about that, and in fact the only time I ever saw him critique software, talking about the complete usability failure of Windows and Microsoft's supporting websites, it did not require any sort of deep insight.
Hoffmans critique about which businesses have good promise should be taken seriously, if with a grain of salt.
If you want to know why you might want to buy a product ask the company that made it. If you want to know why you might not, ask their competitor. In both cases the answers are valuable, but in neither case should you take the answers at face value.
It's like some random lottery winner criticizing Apple - there's no special insight or perspective there. He is a fundamentally uninteresting, and pridefully smug person.
Less faux than a bit silly. Their outrage isn’t fake. It’s just misplaced.
The comparison doesn’t work because the KKK’s violent racism isn’t comparable to commercial competition and the relatively-polite quibbles of two San Francisco billionaires. That’s less insulting than just wrong.
The key part - Reid being invested in both OpenAI and anthropic should have been higher up in the article. Pretty crucial context to him trash talking XAI.
It was at the very top just now when I looked. That said, the site has so many distracting pop-ups and other interruptions it's hard to see anything there.
SpaceX renting out their compute to competitors is what crashes the "AI company" notion. They are either datacenter company or an AI company - but it cannot be both.
You can be both but you probably are not very good AI company if you have significant amount of extra computing to rent. Or you calculated your own demand significantly wrong somewhere. Which again does not make you great AI company...
Either you are in need of as much as compute as possible since you're building frontier AI models or you're not and you're just renting out the compute. And let's face it - Grok, if not failure, is just a toy.
> Either you are in need of as much as compute as possible since
Either you are a fast-growing, high-multiple frontier-model AI company or you’re a datacenter company, but you can’t be both. You can be a shitty AI company that sells its extra datacenter capacity.
The only objective information we really have is SpaceX's pre-IPO S-1 filing, which breaks down their revenue into Space, Communications and AI segments, with 2025 revenue for each given as.
Communications (i.e. Starlink) 11.3B
Space (i.e. launch services) 4.0B
AI (i.e. Twitter, Grok) 3.2B
According to Google's AI summary, Twitter 2025 revenue was 2.9B, and Grok was 0.5B, so the 2025 "AI" revenue is basically all Twitter, although at least temporarily going forward there will also be significant datacenter/GPU rental income from Anthropic and Google, and now we also have Cursor with an ARR of 4B.
The only significant "AI" revenue here is from Cursor. Datacenter rental seems like it will bring in a lot of money in 2026, but that's hardly "AI".
The problem is that SpaceX financials supporting the IPO say SpaceX is a major AI company that has a minor side-hustle of making rockets that sell satellite internet.
That's the total picture of SpaceX, right. Does SpaceX as a whole make financial sense? No. Everyone knows the SpaceX "value story": AI means that a company that makes a minus 5 billion per year really makes plus 200 billion per year! IN SPACE! But, uh, about those Space parts? Surely those are cashflow positive ... right? RIGHT?
Well, no.
SpaceX it is the 50th or so rocket company. The previous ones did not fail because they couldn't get rockets working or couldn't improve on the state of the art in rocketry. The ones not supported by nation-states failed because they couldn't get the financials working. To be fair some of them failed because they couldn't get to earth orbit. But that's not the common case. More common: "New rocket type works! We demonstrated it succesfully! No launches ... so no money. We're publishing our work and shutting down. Bye". Irritatingly quite a few of these new rocket companies are theoretically more efficient than SpaceX will ever be. Also irritatingly most of these companies, through financial necessity, demonstrated a working rocket in one try, in contrast to SpaceX.
(my favorite? Aerospike nozzles. Aside from their great "Wiley E. Coyote" potential should launch fail they look absolutely incredible)
Did Space part of SpaceX get the financials working? No. Not even with Starlink (their debt repayments still drag it into the negative). What is their fix for too small a market? Make Spaceship, an even bigger rocket ... for a market that sees no use for the existing Falcon 9 launch capacity ...
Starlink: same. It's not even the 10th satellite internet company. The previous ones all failed, because the market was too small, and had to be bailed out by nation states, famously Iridium. Did Starlink solve the financials? No.
The most irritating bit of this is of course Elon Musk himself. Why did he succeed? Well he keeps mentioning himself and "starting from first principles". As illustrated above: he started from first principles, he failed (private, ie. profitable access to earth orbit? SpaceX doesn't do that), then he got incredible amounts of money somewhere to pour down a black hole (using artificial demand like Starlink) and so everything is still moving. Obviously Elon Musk's achievement is 100% finding this money and 0% practicing science from first principles".
That's also Elon Musk's great redeeming quality. What's his achievement? Convincing, first himself, then humanity, or at least enough humans to get ~300 billion in cash, that Space exploration is worth doing despite the fact that it's unprofitable. The actual technical Space exploration side he ... frankly didn't do particularly well, though well enough that it (eventually) worked. But the result is still fantastic: we're in space far more than before!
> What is their fix for too small a market? Make Spaceship, an even bigger rocket ... for a market that sees no use for the existing Falcon 9 launch capacity ...
It’s designed to go to Mars. It boggles the mind that anyone would invest in a company and just ignore and/or disbelieve the reason the company was created. Either they’re just gambling or they’re delusional when they discuss so called fundamentals.
Going to Mars is absolutely insane value proposition for public company. There is no monetary gain from it. You have some political gain. But even that is one bad administration away from crashing for multiple years...
The SpaceX S-1 says they’re going to be making $320bn by 2030 on AI services at a profit margin of 74%. That dwarfs all the launch business and even Starlink, which they very optimistically project as well. This is how they supported the IPO valuation.
The SpaceX IPO prospectus states that the company is targeting a TAM of $28.5T, equal to roughly a quarter of the world's gross economic output.
Patrick Boyle said it best. Roughly 1 billion people on the planet make more than $12k annually (folks with "discretionary" income). Divide that TAM of $28.5T by 1B and the every single person needs to give SpaceX ~$28.5K every year forever in order for that figure to make sense. It's more than 3x what the planet spends on food currently.
Nobody (with money to invest) actually believes that SpaceX or Tesla will ever catch up to their valuations. People investing in things like this only believe that somebody else believes it.
This will continue to work until they run out of morons willing to buy a stock with a PE of 300 at which point it will contract spectacularly.
> The asymmetry—Anthropic penalized while OpenAI was not—is what troubles him most
This isn’t the asymmetry that worries me. Anthropic was penalized, which makes OpenAI (and xAI and every other American company) theoretically subject to the same class of penalties.
Compared to what? All the comments seem to agree, but I curious if people here have actually used Grok.
I rotate between major models frequently. Grok has been up there in accuracy and research for some time, trading places with Gemini IMO. Latest 4.3 release has been solid.
Composer is pretty good and now they own Cursor. Don’t count them out yet.
So.. it’s bad, compared to what? Claude from 2 months ago?
Gemini has been atrocious, in my experience. Not sure if it's the harness or the model, but it hallucinates much, much more than GPT (via ChatGPT) or Claude, and weirdly assumes it can just answer complex, knowledge-heavy domain questions without doing a web search.
Sorry, that's a typo, it's not SpaceX, it's SPAC X - as in, Musk is using SpaceX as a SPAC to absorb other AI companies. Cursor is the first, but will certainly not be the last. So, if it's not an AI company yet, it will be soon. I mean, the humongous total addressable market from their IPO filing has to come from somewhere, and Grok will definitely not cut it...
Renting GPUs doesn't make you an Ai company imo, colocation data center is more accurate. One might expect that line of business to commodify within five years.
Cursor is obviously an AI company and the main problem Cursor faced was not really having their own model and being forced to buy expensive inference from other providers.
Cursor + their own data centres + the ability to train their own models is pretty big. Definitely an AI company.
Does Cursor have any meaningful market share? I cannot seem to find them on any lists.
Would your requirements also make Atlassian an Ai company? They have data centers and have trained their own model and have Rovo. I certainly do not because it's not their main line of business and their "ai" sucks hard. SpaceX seems to be closer to this category than Anthropic/OpenAI
This is nitpicky (and it supports your point, I'm not arguing): Colocated data centers became a commodity decades ago. Currently they are a scarce commodity that's in high demand, but I agree with you that this will eventually come full cycle.
The "Tell Gen Z to stop booing AI" is crazy to me. Are we living on the same planet, every argument is dismissed even though it's backed with real data.
Whilst nobody can dispute the inordinate success Hoffman has had in building and scaling LinkedIn and his work on Greylock, his associations with the Epstein files, previous spats with Musk, and his warped political views makes me question anything he says.
In this instance, I see it as nothing more than a self-serving and politically motivated diss against Musk, even if the substance of what he says is true.
I commented 51 mins ago when there were around two comments here that were not talking about Reid's bias against xAI.
5 more comments appeared afterwards in roughly the same timeframe when I posted my reply and that was the first mention of Reid being an OpenAI investor which is enough to explain his obvious bias here.
> The timing of Hoffman’s remarks is pointed. SpaceX went public on June 12th, with AI central to its IPO narrative. Within days, the company announced it was acquiring Cursor, the AI coding tool. Hoffman’s read: that’s not proof of AI capability, but evidence of its absence. “You could almost think of it as the IAC of AI,” he said, invoking the serial acquisitions roll-up strategy of Barry Diller’s internet-era conglomerate. “Use the market cap to buy AI companies and try to buy your way into relevance.”
Careful. I don’t have anti-Musk bias, but it can both be true that SpaceX will be quite successful in the long run and the stock is still overpriced in the short run.
"The pitch deck, he revealed, describes Manas as “an AI drug discovery factory for creating monopolies” legally permissible, he notes, because pharmaceutical IP functions as a sanctioned monopoly by design."
What a terrible world to live in. Of course hes trying to convince Gen Z of the "opportunities" they have. Opportunities for him and his oligarch friends to make a load of $. Cant wait for this AI bubble to crash and dissolve a bunch of undeserved wealth.
I wake up every morning amazed that there were enough people foolish enough to buy a company with only $18B in revenue and no profit at basically at the valuation of Microsoft (a company with $300B in revenue and $100B in profit).
If you were reasonably confident the stock was overvalued and/or would go down, why would you not short it, (Or similar)? "Talk is cheap" and "Putting money where mouth is" are both trite, but applicable here. In the short term, this can misfire, but as a consistent mindset long term, it would expose whether there is value in these assessments.
To help you understand my mindset here: Picture a simple game or bet. RNG/dice etc. 55% chance for a $10 payout; 45% chance to lose $10. You would keep on rolling that die, right? I believe this is is close enough of a comparison.
Stated another way: Someone else who has no confident predictions about the market and is in index funds or similar, would love to be able to make confident statements about a stock (SPCX or w/e), because it would be an effective edge. They wouldn't just post about it on the internet; they would take appropriate positions.
Elon Musk's companies launch rockets, build the most high-tech electric cars, host the world's most relevant social network, deploy high-speed internet to most of the world, build one of the world's leading LLMs, I could go on...
Teslas aren't the most high-tech these days. They have fallen behind on the hardware side, particularly in charging and batteries. Here's a charging speed comparison:
>> “I’ve been thinking about writing an essay on the kind of mistakes that are made by college graduates booing or otherwise dissing AI,” he said. As if speaking to all of Gen Z, he added: “You guys have the opportunity to be generation AI—where you come into the workforce saying, ‘I know this a lot better than all of you"
Quite patronising. Maybe they really do know it a lot better than you, Reid, but not in the way you think. Maybe they see through the hype and hustle culture and are more interested in working towards fulfilling lives and jobs.
It's time to give up your silly cynicism, embrace being a professional slop shoveler and doing work with higher volume, more repetition and less creativity than ever.
Such an out of touch attempt to get the youths onboard the hype train.. ok boomer.
> ok boomer.
Reid Hoffman is not a boomer. He was born in 1967. Also: ageism isn't sexy.
I'm old too, it isn't about that. He's desperately trying to guilt young people into glomming onto his profoundly uncool thing by playing on some ancient "digital native" trope. It's, well, some boomer type shit.
>Maybe they see through the hype and hustle culture and are more interested in working towards fulfilling lives and jobs.
By living like recluses, doom scrolling Tiktok and gambling on Kalshi all day? Lol. They're hardly saints.
Did we blame the kids for smoking back in the day too, or recognize the harm and regulate it out of their lives?
Fair, the youths very much much get blamed for smoking and gambling back in the day as well. Sort of pivotal to the story of Pinocchio, for example
This is largely escapism because the current paradigm of growth is ending, rather messily. The definition of living well is going through a forced change, and adjusting is hard.
We made that world. There are very smart people who spent their talent making the most addictive social media as possible.
College students totally have the capital to gamble all day on kalshi.
How is Reid Hoffman relevant?
Someone like Elon being asked for their opinion on tech - I kind of understand - was at least at the coal face of SpaceX and Tesla for a time, seemed to understand the tech and was not terrible when it came to direction.
Zuck I'd get, Bezos, Dario, Sam - but I don't actually get why Reid is always in the conversation - he's never been in front of anything
Not commenting on Reid specifically but on the other hand I don't understand why we should listen to the Tech CEO's / Founders about their opinions on the tech they are selling.
Why wouldn't you listen to a company on why their product solves the problem you're having?
Since you're not picking up on a social subtext, "we should not listen to them" here means "don't be influenced by them" or "don't take their words as granted". In other words, we should be skeptical, not literally shut them out.
Companies lie.
Yes, but that doesn't mean you shouldn't listen to them. You listen to them and you evaluate their claims.
To be truly impartial I don't think you should even evaluate their claims directly. This allows them to focus the comparison on things they care about, not the things you care about. Instead you should decide what problems you need solving, and evaluate solutions to those problems against your own rubric.
It seems to me that the original poster meant "listen" in the sense of "believe," not "listen" in the sense of "hear."
Humans lie
Companies exist to influence others.
What do you think anyone talking to the press or commenting on social media is up to?
As the article said, Reid Hoffman is on Microsoft’s board and is an investor both in OpenAI and Anthropic.
So, a guy with probably one of the largest incentives in the world to trash xAI is trashing xAI?
The information content of this is rather minimal. Even if everything he says is literally true it's hard to tell through the massive, massive vested interest he has.
And it doesn't help that...
'Hoffman, who is an investor in both Anthropic and OpenAI, pushed back firmly on the narrative that the two companies are in a zero-sum race. “We tend to want to tell these stories as cage matches,” he said, as in two companies enter and only one leaves, but “in fact,” he claimed, “there’s a lot of room for both of them to win incredibly.'
that's clearly a very self-interested gloss on the flip side of the situation. Yes, that's in the possibility space. No, I would not consider "both companies do fantastically for many many years" as a terribly large part of the possibility space. Look to all of the many past instances of industries starting up. It is a very common case that if you take the two early leaders you aren't looking at who is going to be the two biggest companies in 10 or 20 years. It is in fact a common case that neither of those companies are the leaders in 10 or 20 years. The sheer staggering size of the AI training moat at the current time may lock in the possibility that no other business could possibly overtake them... but what if somebody solves that massive training gap? It probably isn't mathematically fundamental; I can't help but observe that humans do not get to their level of capability by pouring the entire Internet through their head several times.
He probably does know a lot of things most of us don't know, but I doubt he's sharing very many of them in this article. This is just trash talk.
The AI labs have somewhat the same problem that publishers have. Essentially their asset is a static piece of IP: a huge file full of numbers. They’re like a publisher only letting you read their book through some scuzzy Flash reader UI because they have to protect that file at all costs. At some point the weights get out/get reproduced and then what they have a is bunch of sunk costs.
Is xAI being used by any professionals? I see them acting as a data center rental service for the others, but that doesn’t justify their valuation imo. They seem to be behind on everything and don’t seem to have any relevance. The cursor purchase may change that but for how long?
I see no reason any portion of SpaceX justifies its current valuations. I also think taking what is probably ultimately a successful and profitable company in SpaceX, even if it is maybe not as successful and profitable as Elon might say, and tying it at the hip to the AI bubble, while being clearly on the losing end of that AI bubble so far, could well kill SpaceX in the process. I hope not, because no matter how HN may feel about Elon, SpaceX has some great tech and is definitely moving space tech forward. Rather harder to say that about xAI.
But then I'd say I don't understand the valuations of a lot of companies right now. It seems to me the stock market has written into its structure the idea that United States companies will be claiming something like 500-1000% of all TAMs in the entire world in the next 10-20 years, which seems unlikely to be the case. SpaceX's claimed TAM of "pretty much the entire United States GDP, you know, why not" is merely the most blatant instance of this.
I'm not defending SpaceX or xAI. Billionaires don't need my help. But this article is still pretty pointless. Hoffman isn't a dispassionate observer, he's one of the players. Of course he's telling everyone he's going to win and the other guy is going to lose. Even when a coach is completely objectively correct when he says in his pre-game press conference that he has every confidence that his team will win in the end, it's still an information-free statement.
>So, a guy with probably one of the largest incentives in the world to trash xAI is trashing xAI?
He's just stating the obvious, so I really don't see this as contentious.
xAI is irrelevant. It's so irrelevant that after being relegated hardware from Tesla, then pushed into Twitter to try to make that have value, then pushed into SpaceX because Elon Musk somehow gets away with hilarious levels of securities fraud, now it's basically reduced to renting out hardware.
Yes, xAI is irrelevant, and Hoffman is just pointing out the blatantly obvious. Its only value is in renting out hardware that can be better used by more capable orgs. It is basically a scalper that happened to get loads of nvidia hardware pre-orders in just before the AI run-up, and the entire SPCX scam relies upon everyone trying to buy usage of it.
I read the article - and many articles touting what Reid said - but my question remains - why in the name of god is he relevant.
He is connected and gives money to people - why should that mean anyone should listen to him about any of this. He's not actually a do-er is he?
Is there something I am missing? The amount of coverage he gets seems massively disproportionate to his skill, talent and insight.
Sam Altman is not an AI researcher, I don't think he ever worked directly with tech as an engineer either. Pure MBA-with-engineering-degree type.
> He is connected and gives money to people
Thats why. Not that we should listen to him (no clue who exactly he is) but thats why he gets attention.
>>He is connected and gives money to people
this is also known as influence so..
Sir this is Capitalism.
I truthfully don’t know the answer, but if I had to guess, his connections and positions provide him with an unusual amount of knowledge and perspective. Another might be that his opinions often are correct in hindsight.
It means his opinions about xAI are worth less than a random HNer's, since he has a very strong incentive to talk bad about it.
So he has money.
That Microsoft who added LARGE BLUE copilot buttons on the dialogs you get in Visual Studio when it stops on a breakpoint or exception?
> How is Reid Hoffman relevant?
What does this actually mean? I’ve always taken this use of relevance as an influencer metric.
Is Elon credible? He's been wrong so so many times about "full" self driving: https://en.wikipedia.org/wiki/List_of_predictions_for_autono...
Other than co-founding one of the most successful tech companies, that is.
Elon said we should spend most or all of our GDP building more silicon than we can actually make to launch it all into space where we had no meaningful solution to economically cooling it burning all of our money for a product that currently makes no money delivered in a fashion that can't possibly work. It's not clear that he understands AI or rockets.
Remember prepared statements can be written by smarter people. Ask him to speak extemporaneously and find out how stupid he really is.
Guy who sells trips to space says we need to put more stuff in space. AI is hot now, so he has to connect his business to AI. Remember when he put a car in orbit? This is more of the same.
There sure are a lot of people attacking the messenger here. This seems fairly par for anyone criticizing one of musks properties.
Reid Hoffman isn't relevant. Don't attack the person, attack the substance of their argument. How is xAI not a total shitshow? This is the question you need to be able to answer.
They're all clowns. None of them are credible. TBH this extends much further down than the C-suite. Generally it seems like something happens to people's brains when they hit roughly Director+ where they just start spouting absolute nonsense.
How is he less relevant than Elon Musk?
He co-founded linkedin a platform every one knows.
Elon Musk invented the Cybertruck and has a weird cult following through Tesla.
i mean Elon Musk called some of his kids this:
X Æ A-Xii Musk, Exa Dark Sideræl Musk and Techno Mechanicus Musk
What opinion should i give more value?
I'm not interested in people's take on SpaceX this early after their IPO, they have an ambitious vision and Elon Musk gets a lot of blind hatred. You don't invest into SpaceX to see returns in a month, you're in it for the next five or more years or you're better off finding a different stock to invest in. To date SpaceX is the top leader in getting things into space for the lowest cost, everyone else pales in comparison.
People don't invest in SpaceX because of space launch capability, that barely counts for their valuation at all.
The valuation of SpaceX is due to AI, namely the revenue they get for renting out their GPUs to companies that actually have AI customers, as their own AI tech has not panned out.
For the large number of companies rolled into SpaceX, they are all failed attempts to grow large enough to justify their valuations, and when a company fails to do that it just gets rolled into the conglomerate as a way of hiding the failure.
Tesla's valuation contrasted with its performance means that Tesla will likely be rolled into whatever latest vehicle of Musk's has the most attention, hiding the failure of Tesla to come anywhere near to its promises.
Other than launching satellites, being able to get things into space for the lowest cost is about as relevant as being able to get things to the bottom of the ocean for the lowest cost.
It's never going to be cost effective to send anything back down the gravity well, which means that the only way Musk's plan leads anywhere is if he's able to bootstrap an entirely self contained, self perpetrating economy in space. That's not happening in five years.
Edit: and no, data centres in space are not the answer.
In that case you'd be better off waiting 6 to 12 months before buying into SPCX.
Space-x is it's biggest customer.
Star Link is the main thing which increased the payload to space significantly.
Star Link only has 10 million customers and every few minutes a satellite handover is happening which makes it hard to use for video call (was my experience at a friend's house)
While this business is paying of right now others will get into it too and destroying SpaceX margin (china etc)
Now what else on payload is there? Ah yes Datacenter.
It would take 300-400 Sparship launches alone to get a current 200-300Mwh DC into space alone.
Starship doesn't deliver yet what it needs to be able to do. Neither on payload side nor on cost reduction due to reuse.
A DC will be cheaper on earth for a long time as long as earth is as empty as it is especially for areas which are just dessert.
It would be a lot better long term investment to just build its own Datacenter city in the dessert as ai doesn't need that low of latency and use everything realtime in the other Datacenter we already have.
SpaceX Elon musk fantasy is 50-100 years to early.
You gonna wait so long?
This article encouraged me to look at the investor materials [0].
The 55th slide "key metrics" wording stood out to me:
> AI: "Nameplate Compute Draw" Total number of GPUs installed in the data centers at the end of a period multiplied by the respective all-in power draw, reflecting installed capacity and not actual power consumption or utilization
Close to $15 billion in losses since 2023 and not much clarity on actual usage or impact. TIL the plan of record is AI satellites assembled on the moon.
[0]: https://ir.spacex.com/investors/default.aspx
Reid Hoffman hates Musk. Think what you will of Musk (we all have our opinions), but Hoffman criticizing one of Musks companies is the equivalent of Steve Jobs criticizing Windows. Its a personal quibble and therefore not really news worthy.
This is like the guy at Techdirt writing another article about how dumb Elon is.
Steve Jobs did have valid criticisms of Windows.
If you want to know why you shouldn't choose Windows it makes sense to get Steve Jobs' opinion and then evaluate the opinion.
It’s like Bill Gates criticizing Apple… if you really want to split hairs about the analogy used.
This is not a very good comparison because Jobs was well known for very pointed and accurate critique of software, which was one of his super powers at Apple. Bill Gates was known for figuring out how to manage software engineering, but nobody would listen to Gates about that, and in fact the only time I ever saw him critique software, talking about the complete usability failure of Windows and Microsoft's supporting websites, it did not require any sort of deep insight.
Hoffmans critique about which businesses have good promise should be taken seriously, if with a grain of salt.
It’s an analogy, it’s always going to be imperfect!
Jesus Christ.
If you want to know why you might want to buy a product ask the company that made it. If you want to know why you might not, ask their competitor. In both cases the answers are valuable, but in neither case should you take the answers at face value.
It's like some random lottery winner criticizing Apple - there's no special insight or perspective there. He is a fundamentally uninteresting, and pridefully smug person.
He still can be right.
But yeah its clear that xAI is a trainwreck and Space-X is weird cult hype.
That's like saying nobody should have listened to MLK criticising segregation because he hated the KKK.
I think that’s a pretty inappropriate comparison and you should withdraw it. Please edit your post?
The faux outrage is odd.
> faux outrage
Less faux than a bit silly. Their outrage isn’t fake. It’s just misplaced.
The comparison doesn’t work because the KKK’s violent racism isn’t comparable to commercial competition and the relatively-polite quibbles of two San Francisco billionaires. That’s less insulting than just wrong.
It would only be like that if MLK was trying to become the lead white supremacist.
ridiculous comparison
The key part - Reid being invested in both OpenAI and anthropic should have been higher up in the article. Pretty crucial context to him trash talking XAI.
Not that I disagree with his assessment…
It was at the very top just now when I looked. That said, the site has so many distracting pop-ups and other interruptions it's hard to see anything there.
Maybe he invested in the competition because xAI is a train wreck?
SpaceX renting out their compute to competitors is what crashes the "AI company" notion. They are either datacenter company or an AI company - but it cannot be both.
You can be both but you probably are not very good AI company if you have significant amount of extra computing to rent. Or you calculated your own demand significantly wrong somewhere. Which again does not make you great AI company...
> They are either datacenter company or an AI company - but it cannot be both.
why not?
Either you are in need of as much as compute as possible since you're building frontier AI models or you're not and you're just renting out the compute. And let's face it - Grok, if not failure, is just a toy.
> Either you are in need of as much as compute as possible since
Either you are a fast-growing, high-multiple frontier-model AI company or you’re a datacenter company, but you can’t be both. You can be a shitty AI company that sells its extra datacenter capacity.
Arguably Google is both (with GCP and Gemini).
The only objective information we really have is SpaceX's pre-IPO S-1 filing, which breaks down their revenue into Space, Communications and AI segments, with 2025 revenue for each given as.
Communications (i.e. Starlink) 11.3B
Space (i.e. launch services) 4.0B
AI (i.e. Twitter, Grok) 3.2B
According to Google's AI summary, Twitter 2025 revenue was 2.9B, and Grok was 0.5B, so the 2025 "AI" revenue is basically all Twitter, although at least temporarily going forward there will also be significant datacenter/GPU rental income from Anthropic and Google, and now we also have Cursor with an ARR of 4B.
The only significant "AI" revenue here is from Cursor. Datacenter rental seems like it will bring in a lot of money in 2026, but that's hardly "AI".
This shows how out of touch people like Reid Hoffman is.
He thinks it's a daming accusation that SpaceX is "not AI" but in reality "not AI" means rockets and satellite internet.
The parts of the business his class cares about is the garbage, not the substance
Agree that X.ai is a tire fire.
The problem is that SpaceX financials supporting the IPO say SpaceX is a major AI company that has a minor side-hustle of making rockets that sell satellite internet.
That's the total picture of SpaceX, right. Does SpaceX as a whole make financial sense? No. Everyone knows the SpaceX "value story": AI means that a company that makes a minus 5 billion per year really makes plus 200 billion per year! IN SPACE! But, uh, about those Space parts? Surely those are cashflow positive ... right? RIGHT?
Well, no.
SpaceX it is the 50th or so rocket company. The previous ones did not fail because they couldn't get rockets working or couldn't improve on the state of the art in rocketry. The ones not supported by nation-states failed because they couldn't get the financials working. To be fair some of them failed because they couldn't get to earth orbit. But that's not the common case. More common: "New rocket type works! We demonstrated it succesfully! No launches ... so no money. We're publishing our work and shutting down. Bye". Irritatingly quite a few of these new rocket companies are theoretically more efficient than SpaceX will ever be. Also irritatingly most of these companies, through financial necessity, demonstrated a working rocket in one try, in contrast to SpaceX.
(my favorite? Aerospike nozzles. Aside from their great "Wiley E. Coyote" potential should launch fail they look absolutely incredible)
Did Space part of SpaceX get the financials working? No. Not even with Starlink (their debt repayments still drag it into the negative). What is their fix for too small a market? Make Spaceship, an even bigger rocket ... for a market that sees no use for the existing Falcon 9 launch capacity ...
Starlink: same. It's not even the 10th satellite internet company. The previous ones all failed, because the market was too small, and had to be bailed out by nation states, famously Iridium. Did Starlink solve the financials? No.
The most irritating bit of this is of course Elon Musk himself. Why did he succeed? Well he keeps mentioning himself and "starting from first principles". As illustrated above: he started from first principles, he failed (private, ie. profitable access to earth orbit? SpaceX doesn't do that), then he got incredible amounts of money somewhere to pour down a black hole (using artificial demand like Starlink) and so everything is still moving. Obviously Elon Musk's achievement is 100% finding this money and 0% practicing science from first principles".
That's also Elon Musk's great redeeming quality. What's his achievement? Convincing, first himself, then humanity, or at least enough humans to get ~300 billion in cash, that Space exploration is worth doing despite the fact that it's unprofitable. The actual technical Space exploration side he ... frankly didn't do particularly well, though well enough that it (eventually) worked. But the result is still fantastic: we're in space far more than before!
> What is their fix for too small a market? Make Spaceship, an even bigger rocket ... for a market that sees no use for the existing Falcon 9 launch capacity ...
It’s designed to go to Mars. It boggles the mind that anyone would invest in a company and just ignore and/or disbelieve the reason the company was created. Either they’re just gambling or they’re delusional when they discuss so called fundamentals.
Going to Mars is absolutely insane value proposition for public company. There is no monetary gain from it. You have some political gain. But even that is one bad administration away from crashing for multiple years...
The SpaceX S-1 says they’re going to be making $320bn by 2030 on AI services at a profit margin of 74%. That dwarfs all the launch business and even Starlink, which they very optimistically project as well. This is how they supported the IPO valuation.
It sounds like you agree with Hoffman's statement. So how is he "out of touch"?
Rockets and Starlink do not support even a fraction of the valuation given their revenue projections.
In a sane market neither will generative AI, but that’s what’s propping up this valuation at present.
So you appear to agree with him that the valuation is nonsensical.
The SpaceX IPO prospectus states that the company is targeting a TAM of $28.5T, equal to roughly a quarter of the world's gross economic output.
Patrick Boyle said it best. Roughly 1 billion people on the planet make more than $12k annually (folks with "discretionary" income). Divide that TAM of $28.5T by 1B and the every single person needs to give SpaceX ~$28.5K every year forever in order for that figure to make sense. It's more than 3x what the planet spends on food currently.
If this happened it would make Elon emperor of the known universe. Can’t imagine the level of influence this would buy.
It also seems impossible. What are people seeing that I don’t?
Nobody (with money to invest) actually believes that SpaceX or Tesla will ever catch up to their valuations. People investing in things like this only believe that somebody else believes it.
This will continue to work until they run out of morons willing to buy a stock with a PE of 300 at which point it will contract spectacularly.
isn't that his point?
> The asymmetry—Anthropic penalized while OpenAI was not—is what troubles him most
This isn’t the asymmetry that worries me. Anthropic was penalized, which makes OpenAI (and xAI and every other American company) theoretically subject to the same class of penalties.
DeepSeek is not.
Compared to what? All the comments seem to agree, but I curious if people here have actually used Grok.
I rotate between major models frequently. Grok has been up there in accuracy and research for some time, trading places with Gemini IMO. Latest 4.3 release has been solid.
Composer is pretty good and now they own Cursor. Don’t count them out yet.
So.. it’s bad, compared to what? Claude from 2 months ago?
i jump about a lot, for coding gemini and grok are definitely not as strong as gpt 5.5/opus/sonnet/composer.
composer 2.5 is actually very good and use it for a good chunk of tasks.
Gemini has been atrocious, in my experience. Not sure if it's the harness or the model, but it hallucinates much, much more than GPT (via ChatGPT) or Claude, and weirdly assumes it can just answer complex, knowledge-heavy domain questions without doing a web search.
Sorry, that's a typo, it's not SpaceX, it's SPAC X - as in, Musk is using SpaceX as a SPAC to absorb other AI companies. Cursor is the first, but will certainly not be the last. So, if it's not an AI company yet, it will be soon. I mean, the humongous total addressable market from their IPO filing has to come from somewhere, and Grok will definitely not cut it...
Guy who has enormous personal financial interest vested in xAI being a train wreck says xAI is a train wreck. Fascinating thought leadership.
Seems very relevant that SpaceX’s primary AI offerings are:
- Cursor - Lots of data centre capacity being rented to Anthropic and Google and others
That seems very much like being an AI company.
Renting GPUs doesn't make you an Ai company imo, colocation data center is more accurate. One might expect that line of business to commodify within five years.
Yeah, like how AWS has “commodified”
Cursor is obviously an AI company and the main problem Cursor faced was not really having their own model and being forced to buy expensive inference from other providers.
Cursor + their own data centres + the ability to train their own models is pretty big. Definitely an AI company.
Does Cursor have any meaningful market share? I cannot seem to find them on any lists.
Would your requirements also make Atlassian an Ai company? They have data centers and have trained their own model and have Rovo. I certainly do not because it's not their main line of business and their "ai" sucks hard. SpaceX seems to be closer to this category than Anthropic/OpenAI
This is nitpicky (and it supports your point, I'm not arguing): Colocated data centers became a commodity decades ago. Currently they are a scarce commodity that's in high demand, but I agree with you that this will eventually come full cycle.
How many people use grok professionally? Compared to claude code/codex?
The "Tell Gen Z to stop booing AI" is crazy to me. Are we living on the same planet, every argument is dismissed even though it's backed with real data.
Whilst nobody can dispute the inordinate success Hoffman has had in building and scaling LinkedIn and his work on Greylock, his associations with the Epstein files, previous spats with Musk, and his warped political views makes me question anything he says.
In this instance, I see it as nothing more than a self-serving and politically motivated diss against Musk, even if the substance of what he says is true.
OpenAI investor Reid Hoffman says competitor xAI is a "complete train wreck".
Why listen to these people when they have a clear vested interest in talking nonsense about their competitors?
These comments from investors are predictable and it is obvious why they keep doing this.
Did you not see literally every other top level comment in this thread?
Look at the time I posted my comment.
I commented 51 mins ago when there were around two comments here that were not talking about Reid's bias against xAI.
5 more comments appeared afterwards in roughly the same timeframe when I posted my reply and that was the first mention of Reid being an OpenAI investor which is enough to explain his obvious bias here.
> The timing of Hoffman’s remarks is pointed. SpaceX went public on June 12th, with AI central to its IPO narrative. Within days, the company announced it was acquiring Cursor, the AI coding tool. Hoffman’s read: that’s not proof of AI capability, but evidence of its absence. “You could almost think of it as the IAC of AI,” he said, invoking the serial acquisitions roll-up strategy of Barry Diller’s internet-era conglomerate. “Use the market cap to buy AI companies and try to buy your way into relevance.”
Sounds like securities fraud to me.
Not an AI company? You don’t have to keep selling me on SPCX, I’m a buyer now.
Careful. I don’t have anti-Musk bias, but it can both be true that SpaceX will be quite successful in the long run and the stock is still overpriced in the short run.
When it falls I’ll just average down.
Unfortunately for you, it's priced like one.
SpaceX: "Not an AI company, but priced like one"
Tesla: "Not a tech company, but priced like one"
"The pitch deck, he revealed, describes Manas as “an AI drug discovery factory for creating monopolies” legally permissible, he notes, because pharmaceutical IP functions as a sanctioned monopoly by design."
He's got it all figured out, like Myhrvold and Intellectual Ventures
What a weird way to describe what is just another drug company, exactly the same way every single drug company functions.
Okay, random dude says something -- everything completely behind paywall. Guess it wasn't important.
I don't get a paywall -- maybe it's thanks to uBlock Origin?
What a terrible world to live in. Of course hes trying to convince Gen Z of the "opportunities" they have. Opportunities for him and his oligarch friends to make a load of $. Cant wait for this AI bubble to crash and dissolve a bunch of undeserved wealth.
I wake up every morning amazed that there were enough people foolish enough to buy a company with only $18B in revenue and no profit at basically at the valuation of Microsoft (a company with $300B in revenue and $100B in profit).
A ton of them are on this thread
They would be very upset with your comment if they could read!
Short it then
There are more than those two options, both of which are "take unnecessary risk on a hugely uncertain investment."
If you were reasonably confident the stock was overvalued and/or would go down, why would you not short it, (Or similar)? "Talk is cheap" and "Putting money where mouth is" are both trite, but applicable here. In the short term, this can misfire, but as a consistent mindset long term, it would expose whether there is value in these assessments.
To help you understand my mindset here: Picture a simple game or bet. RNG/dice etc. 55% chance for a $10 payout; 45% chance to lose $10. You would keep on rolling that die, right? I believe this is is close enough of a comparison.
Stated another way: Someone else who has no confident predictions about the market and is in index funds or similar, would love to be able to make confident statements about a stock (SPCX or w/e), because it would be an effective edge. They wouldn't just post about it on the internet; they would take appropriate positions.
I'm with the parent post, and I did!
Cults remain irrational longer than the sane can remain solvent. Particularly when the cult captures governments.
Fantastic insight! I take his opinion as having the most merit possible in this context. Why?
Because LinkedIn is also a train wreck and game recognizes game.
linkedin is not a $3T company though.
Elon Musk's companies launch rockets, build the most high-tech electric cars, host the world's most relevant social network, deploy high-speed internet to most of the world, build one of the world's leading LLMs, I could go on...
Reid Hoffman runs a social network for spam.
> build the most high-tech electric cars
Teslas aren't the most high-tech these days. They have fallen behind on the hardware side, particularly in charging and batteries. Here's a charging speed comparison:
https://www.youtube.com/watch?v=Cy46Ag0djjk
Last week Yann LeCun called xAI a "failure"
https://www.cnbc.com/2026/06/18/yann-lecun-elon-musk-xai-fai...
>>LeCun, who was previously Meta chief AI scientist,
Well, I guess he should know.
Oh shit, someone criticized something to do with the TechBroGod ...
Talk about shaking the tree for Musk's temporarily-impoverished billionaire dick-rider groupies, LOL
I mean, I can see some issues with SpaceX valuation, but I find it really funny that we are now taking advice from the LinkedIn founder on HN.
Ideology is truly blinding.