Stock market investors are about to be asked to put up many tens of billions of dollars for companies building some of the most advanced, or “frontier”, AI models. First will be next month’s initial public offering of SpaceX, owner of xAI, with OpenAI and Anthropic also eyeing public listings. But there are still many things about the basic economics of frontier AI that are unknown or unproven.
That point was underlined last week by the release of SpaceX’s IPO prospectus, which provided the first detailed look at a frontier model business. The questions start on the cost side.
Most estimates peg the cost of building a gigawatt of AI data centre capacity at between $40-50bn. Even though the biggest AI companies (including SpaceX) have stretched out schedules for the depreciation of the value of their servers in financial accounts to five or six years, such charges on servers alone are estimated to account for half or more of the annual costs of running an AI data centre.