> Correction: index funds don't have a choice. They must follow the index, and so must buy the stock.

Maybe, most indexes do not have to follow the index. they just need to match the returns. An index fund manager has choice of what stocks to buy. However an index fund doesn't have enough managers to make many choices and so they normally buy just what is in the index. However all index fund managers know they are large enough that if they change their holdings "instantly" when the index it self changes the market will collapse and so the fund will under perform. Thus index fund managers are always trying to figure out what the index will do so they can start buying/selling stocks in smaller amounts before the change happens.

How each fund handles this is up to the managers. (and "total market" funds have less ability and need to do this)

But surely the managers of those pension funds can see this happening, and will not likely take on the risk of shares that are that young, no? The index funds hands are tied, i agree, but passive retirement funds are largely managed by people who are motivated for them to succeed. If this were not the case, then pension funds could have been looted long ago...

Mmmm legalized theft: the new Tech Industry!

>Correction: index funds don't have a choice. They must follow the index, and so must buy the stock.

Right, if they've advertised as an S&P 500 index fund, they have to robotically follow the S&P 500, stupid inclusions and all. Changing that strategy would require ... a lengthy process involving input from shareholders.

However, someone can still start e.g. a "classic S&P 500" fund that follows the old rules for inclusion, and I suspect we'll see that in response to these recent decision.

Sure, I don't like him either but it shouldn't be about him. It should be about the institutions we trusted to keep our index funds safe. Or was this always based on "vibes"? Was VOO never safe? Was it always possible for the people in charge of the stock market to simply include some money pit into our retirement funds? I feel like the people responsible for these decisions must fear life in prison or this will keep happening.

Twitter was 40 billion ish overpriced purchase and SpaceX is seeking to raise 75billion

Let’s not make billions into a footnote?

"He’ll do anything to move the goalposts and turn his failures into successes. There is no norm he won’t violate, no boundary he won’t cross."

Unfortunately, if you really start digging in to what is going on in the financial world, you will find he has violated no norms here. This is not a defense of Elon; this is a condemnation of the entire financial industry.

The whole thing scares me, honestly. It has never been a clean happy market where lots of honest people get together and are just honestly trying to make a better world for each other, there is no golden past where people were just nice or anything, but damn if computers don't let people build some structures that the robber barons of old could only have dreamt of. I'm really concerned that "index and chill" doesn't just have a "best by" date but that the best-by date could be in the past; I've heard of an awful lot of ways of exploiting it and other retirements schemes we have, this is just one. I find it implausible that these ideas exist but nobody is doing them.

I’ve always suspected the “index funds are the safest investment” system is ripe for exploitation.

Thanks. That's pretty shady and grim :(

See also:

https://www.youtube.com/watch?v=IHD8BDFYyGI

Ya, but this is a proof-of-concept rip-off. The fact that the indexes don't have our back is a huge problem.

A key point to look out for is how much money Anthropic and later OpenAI will go for in their IPO, which will utilise the same (updated) rules.

count me in !

I think the idea here isn't the absolute numbers, but that if Elon manages to successfully fleece everyone's retirement, it will collapse confidence in the market, which could wipe out far more value than SpaceX alone.

IF SpaceX is actually worth 400-500bn and it's a few hundred billion dollars of fleece, sure, that's a "small" amount (still.. lord almighty it is never enough for these people). But the hazard is that it is a fleece. That would shake confidence in the system, the bear case is basically unlimited at that point.

I dunno won't index funds be forced to sell other stocks to buy these IPOs? Won't that possibly trigger a market crash if the IPO stocks loses a lot of value very fast after the IPO on top of investors predicting this fact and selling shares of other companies?

I dunno, the logical explanation makes sense, but markets don't work on logic especially on the short term. People fearing what other people will do and act in anticipation is known to happen.

Thanks for being the voice of reason here. So many people make their investment/allocation decisions on the fly... it's only going to get magnified by these 3 big IPOs. (and their unexpected consequences)

Firms will look at your $600k 401k AUM, Investor Policy Statements, and laugh you out the door. They won't care, you have no say. Your 401k plan is between them and your employer.

Not sure if OP meant literally sell, or just rebalance out of stocks. TBH I've been considering sliding over to all bonds for a time, since there is no tax event if funds stay in the account. But the numbers don't seem that high at the end of the day.

Any advice that confidently ends with "but whether you do A, B, or C, is for you to decide" can generally be safely avoided. This is providing 0 bits of guidance.

class action is the average person's best bet here. You should expect to get $.75 while the lawyers make big money.

> Also some EU pension funds are already in the process of divesting from US markets...

And where will they go to?

I wish we would start paying proportional attention to business news, instead of treating AI (or any other "cutting edge") companies as economy-defining and giving these 50+% of the attention.

It is especially telling if we try to list out all the psychological biases at play:

  - Availability & salience bias - vivid, memorable things feel more important than they are
  - Narrative bias - humans tend to think in stories, and AI tells plenty
  - Recency and novelty bias — new things feel more consequential than established ones (this one already drives like 80% of all HN content btw)
  - Proportionality neglect - people are bad at intuitively grasping what percentages mean, even if they see the stats
  - Social proof and reflexivity - coverage signals importance, and drives more coverage
  - Status quo invisibility - things that work reliably become invisible (surprisingly, HN is really good in terms of working against this bias, I feel like at least 5% of all posts are some niche "inner daily workings" topics)
  - Speculation premium in attention - uncertainty generates more discussion than certainty
  - In-group signaling - cutting-edge things are status markers among influencers

I've recently learned a new finance term, "float", and I want to check if this makes a difference to this discussion?

https://en.wikipedia.org/wiki/Public_float

I hear S&P 500 is weighted on float rather than on market cap, while Nasdaq 100 is based on market cap.

You're not modelling the contagion here. The problem is that while any single one isn't that big a share of the S&P 500, similar companies do make up a lot collectively. Excl some non-tech/AI firms:

NVIDIA Corp NVDA 8.02%

Apple Inc AAPL 6.53%

Microsoft Corp MSFT 4.84%

Amazon.com Inc AMZN 4.01%

Broadcom Inc AVGO 3.36%

Alphabet Inc GOOGL 3.32%

Alphabet Inc GOOG 3.09%

Meta Platforms Inc META 2.23%

Micron Technology Inc MU 1.71%

Advanced Micro Devices Inc AMD 1.19%

Oracle Corp ORCL 0.99%

That's 40% of the S&P 500.

And if anything happens to the AI bubble all of these go down together. While they won't all go to zero and cause a "-40%" overnight, Nvidia's rise is so meteoric that they will trigger a -8% and the rest's valuation has more than doubled since 2023. Even Apple, which isn't much of an "AI company", is still following the AI-tech hype.

If Nvidia eats shit, and the others go -50%, that translates to an overall ~-24% on the stock market.

Before any contagion outside the tech industry is considered. Look at the Dotcom Bubble and a -40% to -50% crash is quite plausible.

That's if everyone were acting perfectly rationally, but a world in which those three companies go bankrupt would have everyone panic selling every equity possible like it's the endtimes.

They will drag the rest with it.

thank you

If they go bust won't it likely trigger a massive market crash? Afterall index funds will be forced to sell other US stocks to buy them, bringing their values down. Non-passive investors will predict that and divest even more and so on...

And that is on top of the IPO companies losing value themselves, this seems likely to trigger a doom-loop until the market reaches a low enough value. This will likely trigger layoffs and companies reducing spending and investments further depressing the economy. Added inflation from oil prices and war.

This doesn't seem like one big balloon ready to burst, but more like a house suspended by hundreds of balloons and they are about to be ran over by an airplane.

You've been told a lie. Productivity has increased every step of the way even as populations shrink and the elderly cohort grows. Most of those productivity gains, i.e. the added value produced by each worker, has gone to shareholders' profits. If we had a reasonable tax system that captured more of that surplus value (which mostly goes offshore and does not in fact "generate more jobs"), then we'd have no problem at all funding the pension systems, and much more.

each few years the pension age rises 69 for me now, but it will likely go up further. much further up is beyond the average life expectancy...

> unless automation taxes pay for it

But this doesn't solve the problem in any way; it simply leads to production drop.

I mean, this is literally the logic of every communist government in the 20th century. They had the same logic that "given the mechanization of agriculture, food practically produces itself; you just need to throw a seed in the ground and give it a couple of tractor rides, and the earth will do the rest. Therefore, we need a tax on such activity, because we have enough resources to feed everyone".

In other words, it's literally a pure tax on automation. The results were mass deaths from starvation every single time.

Originally pensions were created so people who could not work would not be destitute.

The fact it became an all-inclusive all-year-round vacation reward is an anomaly which is getting corrected. Too bad for us we're the generations holding the bag.

I doubt that a FAANG programmer from hacker news has to work till they die. You are doing something wrong.

Current system isnt great but works. Just fear uncertainity doubt here.

You know that short selling is possible? And index funds are traditionally some of the keenest participants to lend their shares out to short sellers in return for a bit of extra return (over the raw index).

There's lots of different indices with different rules, and lots of different funds to implement these. Pick one that works with your preferences.

If it is actually growing company with growing valuation being a year late is not big deal over say 10 or 20 years. It is actually the smart move.

And when it happens, I suspect we'll end up having to eat austerity to avoid inflation again. Under new leadership from the Responsible Party, whoever that is where we live.

>Why does SpaceX warrant a change of existing trading rules?

They don't, while timing certainly benefits, and potentially was triggered by them and OpenAI and Anthropic IPOs, these rules are not specific to only apply to SpaceX.

FTSE Russell (Russell 1000/2000 etc.) Adopted "fast entry" for large IPOs. Eligible companies (investable market cap above Russell Top 500 cutoff) can join after 5 trading days (previously quarterly rebalances). Also eased float rules with carve-outs.

https://www.lseg.com/en/media-centre/press-releases/ftse-rus...

Nasdaq (Nasdaq-100): Effective May 1, 2026, top ~40 market-cap companies can enter after 15 trading days (previously 3+ months). Adjusted low-float handling.

https://spotgamma.com/spacex-ipo-index-changes-spotgamma/

S&P Dow Jones (S&P 500): Reducing seasoning from 12 months to 6 months for megacaps and waiving the 4-quarter GAAP profitability requirement for large issuers.

https://www.wsj.com/finance/stocks/stock-indexes-are-contort...

Because this time we did learn our lesson is almost 15 years ago? Its a good time to get out of the ride

> Why does SpaceX warrant a change of existing trading rules?

It does not, of course, but when oligarch corruption runs supreme, it is whatever they want.

Because twitter helped elect those who set the rules now.

Are you sure? It discovers it within seconds following a bad earnings report. It seems hard to know right now whether five days might actually be sufficient or not, seeing as the cat is out of the bag about how unprofitable and debt laden this trillion dollar enterprise is.

XAI is now printing revenue thanks to the Anthropic compute deal. Moreso than SpaceX itself.

> xAI is losing money hand over fist

I wonder how much better Anthropic is doing.

Moreover their filings on the matter basically correctly weight their space launch business and then go "and xAI will obviously be worth a bajilion dollars more".

The whole point of original rule was to have market discover price over time before adding a company.

It is absurd to blame "market" that did not had enough time to settle. "Bankers" are to blame for making this rules change happen.

It is entirely valit to blame people who changed the rules to allow this to happen.

>>If people really don't want SpaceX in their S&P 500 tracking ETF, we should see a S&P-ex SpaceX in short order.

"People" don't know much about finance to put it mildly. ETFs are created by market demand. Even "factors" ETFs are often based on completely irrational things like dividends, P/E ratios and other meaningless metrics. This happens because people are easily seduced by narratives ("solid dividend paying stocks", "low P/E ratio - good returns") which are plainly wrong but tempting to an average person.

Most people realized they don't know anything about finance and would like to pay someone (their fund manager) to make responsible decisions and expose them to wide market while avoiding blatant manipulations. Unfortunately the incentives are misaligned here. The managers' incentives are somewhere else. They are not paid by long term performance of their fund and they are disproportionally penalized for taking contrarian decisions.

People being force feed those mega IPOs losing money on them is bad for others as well - there will be less wealth for productive investments and more in hands of "players" (or scammers if you want to call it out). There might be a crash. Trust in financial market will plummet and hostile regulation might arise which other market participants will pay for even though they are not to blame.

I will not have exposure to those mega IPOs but I am in privileged position because:

-My understanding of financial markets is much better than that of an average person.

-I have quite a bit of time to follow all of it and react in time

-I pay 0% capital gain tax and use a broker with nearly 0 fees which allows me to rotate for free (almost)

-I know where and how to move my money so I don't lose advantages of wide market exposure

It took me a lot of effort to set it all up like that. An average person falls short on all of the above and is not in position to avoid donating part of their pension fund to Musk and Altman though. It is still bad for me for reasons mentioned above.

So then, why change the rules?

What's really clever is that Musk could pull his Nazi salute at the inauguration of the president he bought, and the ensuing 'voting with your dollars' against him doesn't matter because he was able to orchestrate forcing people to pay him by cutting them out of the loop. I mean it's absolutely evil, but it's pretty clever - his team proved they can't run a country (they probably could, but don't want to), but they're incredibly adept at stealing.

I wonder if Musk chose rocketry solely because of the ability to use it to drain money from government?

What to do then, if "Boogleheads" are wrong?

I suppose everyone reading this thread counts as "well-informed" then, right? All I have to do is move my 401k into the bond-heavy fund right now and then back into the stock-heavy one when everything craters is what I'm hearing. It's what you're doing, right?

But you think they’ll adopt some of these proposals that are in the benefit of these companies IPOing at the expense of large funds?

There's no obviously correct answer here.

A: This has not happened yet. B: Are you actually optimistic that it won't?

That's a request for an opinion, not an emotion.

> they changed that rule as well

S&P hasn’t changed any rules yet.

No, the parent was saying the other rule change is arbitrary.

The tiny float and just a few days before the index funds buy means they have to buy without any more revenue / earnings info than was already published pre-IPO. 90 days is a quarter, so there WILL be more price discovery before a 0 day index fund seasoning period.

I don't think he'll sell a large portion of his shares. My point was that when his shares become sellable will be the only time there is a giant leap in available shares. Because everyone else will be able to sell some of their shares in regular intervals.

Off-load some of them when the valuation is _to the moon_ from AI and then later he'll force shareholders and the board to gift him even more shares then he sold.

People use the dollar in business becaUse its a stable currency.

If the US does something to destabilize the dollar, will economists be running around saying “the dollar was never intended to be used for that purpose!”? No.

It doesn’t really matter if the index “wasn’t supposed” to be something it became. The problem is the same. The only difference is who you blame.

The current situation is unusual and the standard rules handled it fine. For some reason they're changing the rules. That's not "no index can handle all situations." It's a deliberate, harmful change.

> and with short selling in public markets being possible, an accurate price will be established very quickly.

I know very little about markets, but: aren't the short-sellers just going to provide liquidity for the big index funds? Like, if the funds HAVE to buy SpaceX, and the funds are enormous, wont every single stock sold short be immediately gobbled up, as well as pretty much anyone else wanting to sell? Even if everyone else is selling like mad, it wont affect price much at all?

Maybe this is naive, but if these enormous funds are more or less forced to buy SpaceX, it seems impossible that "actual price discovery" is going to happen in any reasonable amount of time, and the short-sellers will be screwed.

Index funds generally try to match the performance of the index, but most are not required to hold the same companies as the index itself does. They typically do, but managers often have choices.

> Index funds already seek to own the entire market, [...]

No, it depends on the index in question.

Could you use a prediction market (or Spread Betting in the UK) to hedge against your ETF loosing money during the period? If the ETF lost value, the hedge would gain it back and vice versa. You wouldn't need to sell the ETF and you'd only be liable for tax on gains from the prediction.

Would you be taxed even if you put it straight into another fund? Genuine question.

I believe you may have gotten discussion threads mixed up, but in any case: I expect that as SpaceX investors sell their SpaceX stock, they will buy ordinary equities to diversify.

Not in retirement accounts

And ten years of full self driving being ready in mere days.

The problem is the stock market is more divorced from reality than we have ever seen. For instance, why does Tesla stock still sit where it is? How could it possibly not be going down at this point? So many undelivered promises, major setbacks in sales, massive decreases to their sales forecasts… literally nothing has gone well for them in years and yet the price is still outrageous. It really feels like I’m just out of the loop on something.

Jack Barker’s rather blunt monologue in SV about how the stock is the product is more true than ever. It felt very heavy handed at the time but it’s only proven to be more the case than I thought.

More like for all that sweet sweet cooling capacity.

EDIT: guys, it's sarcastic... since the parent was talking about latency, cooling is something that is even worse in space than latency

Space is not far away at all.

So... The US GDP in 2024 (the last one I found) was $27.8T...

They are planning to capture 100.7% of it?

Dogs went into space. Dogs are haram. Therefore, space is haram.

Probably not this reasoning.

Advertising, presumably. But that also excludes, like, all of big tech?

One presumes it's because a huge amount of its revenue comes from defense contracts, which are haram. Here is n excerpt from the fund's exclusion criteria:

> S&P 500 Shariah Industry Exclusions. The index universe consists of all the constituents in the S&P 500 Shariah, excluding companies classified as part of GICS sub-industries 20101010 (Aerospace & Defense), 40203040 (Financial Exchanges & Data), 40201060 (Transaction & Payment Processing Services).

Ketamine (and pump and dumps) is haram

Interesting, thanks. Actually slightly cheaper than I expected.

> someone is getting sued.

but that doesnt mean any money gets recovered at all. Musk sure as hell aint giving anything back.

The fix is to simply not buy it - those 401k aren't completely passive, you can choose a different investment (instead of NASDAQ index).

Will take 6+ years and lots of fees lost to recover loss. Won't be anywhere close to made whole.

> People can surely sue...

Would either published indexes or investment funds exist, if suing them for poor performance was anything resembling that easy?

I'm thinking "no".

The small mid caps are precisely what will get sold down here…

If it's actually your 401k, sure you can. Just today I rebalanced my retirement funds away from large cap stocks to avoid this steaming turd that Elon is dumping on the public.

If you're truly convinced there's nefarious reasons for including megacap IPOs in passive index, you can always short the stock (or use derivatives) by the same amount.

I'm not sure you'll come out ahead. (Personally I don't get the outcry, except for nasdaq which has fairly stupid rules, delaying the inclusion of megacaps won't make the problem go away, but probably increase since the float will be massively larger). It's inherent to being a passive index.

How is that their problem? That is an issue between you and the government.

> People are not finance specialists and they are heavily incentivized to buy index funds, so they need to trust that the people who are telling them to invest are not hiding things from them. If that trust is broken, lawsuits will follow.

A "lawsuit" isn't a concern for the likes of Musk.

He's got the money to pay lawyers, politicians, and influencers. He's spread this risk around to the right people; if he goes down, they're going down with him, too.

At a certain point you have to start jailing people for long periods of time. I don't mean the Milken, Belfort, or Skilling treatment. I mean being placed away for 30+ years in medium-security facilities at the least.

The argument is, as I understand it:

* Valuation of the sp500, the hyperscalers and Nvidia is (mostly) reasonable based on earnings

* Build out of infrastructure is demand-driven, hyperscalers are not building just for future demand that would not materialize

* OpenAI, anthropic & co can be overvalued but that does not mean there's a systemic bubble

I think this underestimates contagion effects and the fact that demand appears to be subsidized and may disappear quickly, but it's just MHO.

It worked. The only people upset about it are young people who don't vote. If young people don't want a continual wealth transfer from them to the old, they need to start voting. That's been the case since 2008, and here we are a generation later.

but this isn't "irrational exuberance", literally everyone I know paying and kind of attention has "rational dread".

But where else will people put their money?

Okay? Why does that mean a devastating pop?

Why would that pop the bubble?

Robber Barrons existed from like 1860 through 1915 and extracted the wealth of many people, including Native American tribe lands.

Like this shit can keep going until we decide enough is enough and actually change our society.

> isn't the definition of a bubble that it pops quickly?

There is no consistent definition of a bubble. We have no fundamental reason current valuations have to collapse suddenly.

https://x.com/Mr_Derivatives/status/2022796755621060695

Chamath says Warren Buffett outperformed the $SPX by 2 times pre-2000’s because he used "insider info".

Berkshire Hathaway completely exited its investment in Paytm (One97 Communications) in November 2023. This divestment occurred just two months prior to the Reserve Bank of India (RBI) initiating its strict regulatory and KYC-related crackdowns on Paytm Payments Bank in early 2024.

I think Warren has been doing insider trading.

No, Warren Buffet became so rich because he was making deals to pick up stock at favorable prices the public didn’t have access to. You will not be Warren Buffet just by buying after stocks crash.

Normal people generally won't be able to beat professionals in the "market timing game". So when Joe Sixpack decides to sell off his index funds with intent to buy back in at a lower price, he's usually making a mistake. Staying invested in the market is a better choice for most investors because being in cash is about -2%/year EV whereas being in stocks is about +6%/year EV.

And significant part of those in opposition will jump the ship if they gain power. I think there is little hope for system to change unless there is total collapse and replacement.

Not just the opposition. In other times this would have been the reason for a revolution.

Indeed, not enough people are asking why the Biden administration sat on the Epstein files for 4 years and did nothing with it.

Both are your retirement funds! So…you call one, you call the other one as well.

> Yeah, right

Yes. Literally right.

> One third of all software code is written by AI.

I find it interesting that using lines of code as a metric is making a comeback.

You couldn’t have picked a better argument to show how this bias is exactly what’s making tech people think this shift is ubiquitous. “It works extremely well for coding, in which I am a domain expert, so why wouldn’t it work for all the other domains I absolutely know nothing about?”

It’s actually quite a lot worse than even doctors in training except for highly constrained experimental settings and a few very nice applications that are mostly too tedious/impractical for a human to do or are very basic detection tasks.

I am a radiologist and researcher predominately focused on AI.

Last time I checked thoroughly (roughly two years ago), AI (in the form of small ML models) mostly outperformed radiologists in areas where the gold standard is "one level" above imagining wise. By that I mean that you train a model to detect on an X-ray what would normally need a CT. Or train it to see on a non-contrast CT what would normally need contrast or an MRI, or biopsy, and so on.

Essentially the cutting edge reaches up to 99% of human performance on the task it is trained, which is good enough for triage but not for a final diagnosis. However, magic sometimes happens when you train a model to detect something, which you already know is there, on an examination that is cheaper, faster or less invasive than the human"gold standard". Conveniently, this dataset exists since it's common to first do a cheap examination like an X-ray, and then escalate if nothing is found (or if something is found that you want to see better, or a number of other possibilities).

Examples of AI outperforming humans like this includes AI detecting sacral fractures on x-rays better than radiologists (who normally take a CT to conclusively exclude it), detecting potential precursors to pancreatic cancer on non-contrast CTs (where contrast or an MRI is usually required) and detecting an occluded coronary artery on an ECG without the archetypical "ST-elevation changes".

See the link below for references: https://pmc.ncbi.nlm.nih.gov/articles/PMC9478257/ https://www.nature.com/articles/s41591-023-02640-w https://rebelem.com/a-winning-hand-in-cardiology/

So AI, as a general rule, doesn't usually match or exceed the upper bound of the "gold standard" medical performance. But it tends to carry the quality of the upper bound downwards towards the faster, less expensive and invasive methods. In some cases, like in the case of EKGs, that's huge. In some cases it saves time, in some cases it decreases miss rates from tired radiologists or triages their review feed. And in some cases it's not very useful.

LLMs doesn't come close to specialized radiology models at the moment, because LLMs are more about applying knowledge than creating new correlations. Of course that's also hugely useful, but that's a bit of a different topic to unpack.

What are the premiums like for this AI radiologists malpractice insurance?

With these kinds of things, I want to see comparisons to trained, alert humans. Cut out all the distracted, stressed, tired, incompetent, intoxicated cases from the baseline. That includes rushed doctors at the end of a long shift.

A self driving car doing better than a drunk on the freeway doesn't reassure me that it'll do better than sober me in a snowstorm.

I’ve seen the same. But I don’t see that as a glowing beacon of progress.

A whole lot of doctors, if not most, didn’t pick their profession out of an interest in medicine…

Is it likely that SpaceX will have actual reasonable demand? Their major customer is Starlink. How legitimately confident are we in the numbers with regard to price reduction vs creative accounting to offload costs to Starlink and subsidize the launches to appear to offer huge cost reductions?

If there exists sufficient demand for the product of space launches then it's probably reasonable to expect their to be a near-peer competitor soon, but that's only if SpaceX were to be profitable, which it isn't, even with the subsidization by Starlink on the order of many billions.

There is about 3 chinese orbitallaunchers with some reusability support flying & about as much scheduled to debut this year.

But other than that, yeah - outside of China, progress has been horrendously slow & Blue Origin, the only other US company that demonstrated a partially reusable rocket just had a devastating pad explosion, destroying one of their 2 rockets and their only launchpad.

Doesn't SpaceX charge 2 to 3 times their internal cost to external customers? ISRO is still more expensive, IIRC they charged ~US$60 million (roughly $6000/kg) for the OneWeb launches whereas after the recent price hikes SpaceX is supposedly charging ~US$74 million on a larger rocket (~$4200/kg), but that's far from an order of magnitude difference like your comment suggests, which I assume would be using the $25 million they charge Starlink internally (IIRC ISRO's internal cost is much higher, around $40 to 50 million, but that's still not anywhere near an order of magnitude). Using internal cost from one provider and external price for another is somewhat misleading.

> future projection and goal is $100 per kilogram

This can't be treated as meaningful, given other projections and goals (Mars colony, etc.).

how many packages have you shipped so far to space? SpaceX could disappear tomorrow and most people wouldn't notice. Your satellite TV might get slightly more expensive. Those rare people that don't have LTE internet access and need starlink are exception.

At the rates you quote, $1 T (the size of the market) is 714,285 tons of stuff in the space each year. I don’t think there is enough space in space for that much cargo.

> Starship will bill NASA 1/20th what SLS does

Is that before or after the program achieves profitability?

If SpaceX was only Starlink or only Starlink and rockets it would be an horrible circumvention of the rules.

But now he's also trying to get the indexes to pay for the giant cash fire called X.ai and the far right huddle Twitter too.

I have zero interest in owning anything of either of those companies.

Granted, I only skimmed some high-line numbers, but isn't their only profitable project Starlink? SpaceX is functionally a satellite internet company that happens to make rockets.

I think you missed the core of their question: What has actually gotten better in practical terms for the average American?

amortized training costs

> - Significantly increased my productivity as a software engineer.

This is exactly the point that keeps coming up that folks are struggling to grasp, myself included. How are you measuring this? It certainly makes me feel productive, but I'm not sure I can confidently say it has actually made me more productive. It's made the easy stuff a no-brainer (e.g. boilerplate, simple logic) and the moderate stuff really hard. Never mind the hard stuff. Vetting the code has become a whole other job on its own. The only folks I've found who confidently claim it increases productivity appear to be online (and without evidence), because no one in person is willing to claim that and show it.

> Significantly increased my productivity as a software engineer.

You’re going to have to define productivity as it applies to software engineering. With LLMs we’ve primarily seen the number of PRs over time being discussed as a proxy for LoC, as well as the speed of bootstrapping a small project. None of these have a known correlation with economic output. They just feel good, to the programmer, their manager, or both.

> Using it daily for Chinese-English translation. Significantly better than pre-LLM translation software. Also, great at teaching grammar, nuances, etc.

Yes dealing with language is the one area LLMs are actually designed for. But what’s the TAM for machine translation?

> General Q&A. Like "Googling" but much faster. This is probably the most common use case for me.

And now you’re missing any kind of traceability for the information that you “learn,” since it all gets spaghettified and then recombined into a pile of plausible slop with no attribution. Where before you had to do slightly more work to find the information you needed, now it’s available faster but you’re at complete mercy of literally 3 American companies plus the CCP for the accuracy of that information. Most people somehow seem happy with this arrangement.

Sounds like you have only the saleswoman to thank, not the bot.

Intrinsic motivation. I find developing software inherently enjoyable, and being able to build things faster with less friction simply makes me happy.

I asked - I don't have an opinion either way. I use LLMs, I just don't find them life changing, but I would never deny that in a world with infinite data something that can do a pretty good first pass at parsing and summarizing and organizing it with little effort on the creation end is a good thing.

How do you know it is not hallucinating those quirky stories :)?

It does have to be an LLM; when people talk about AI these days, they're talking about LLMs; that's the common framing of the discussion. Linking to unrelated ML to argue that AI has benefits is disingenuous.

> No body who has a choice is using Grok

The Grok app had over 100 million downloads in 2025, over 60 million active users, and generated $350 million in revenue. That’s a lot of people being forced to use it.

But that didn't happen in reality, did it?

Clients - I don't see anyone delighted that apps are better, or cheaper, or more secure. If anything, I see more enshittification, more half-baked ideas and more fear that security is worse now that we let AIs write almost all code.

Employers - They didn't really sell more or expanded their customer base. They would have, if they had the exclusive advantage, but now everyone has AI. They can cram more features in their software quicker, but so can their competitors, and AI is not magically opening any untapped market. If anything, everyone is now doing the same thing - trying to get their software on the AI train, with mediocre results so far.

You - did you benefit really? The job market is shit due to the death of ZIRP, the nature of the job itself is changing and there's a lot of uncertainty around. If anything, employees are now laid off more, not less, and salary and bonuses are not increased in any measurable way.

It looks like to me that we have to dance this particular dance because if we don't do we're left behind. That's fine, it happens every now and then. It might even be that in the future we will have tangible advantages from LLMs - better automated health care, better learning opportunities come to mind. That has to be demonstrated. But now, in year 2026, what's one advantage of AI? Having less and pricier RAM? Being able (and expected) to write more code in less time?

> shitshow for whom?

I think there will be a tremendous political opportunity in the next 6 months to capitalize on rage in cities against new tech wealth driving up housing costs.

Why not raise it then?

Why shouldn't we be concerned about it?

A society should be judged by how it treats those at the bottom and by that metric our current society is pretty awful.

Now let’s see you do this with 40B. The f you can do that I will be intrigued, since it sounds like you solved a bunch of complicated economic problems.

But we don't have visibility on the COGS until they IPO and file, right? So where is all this premature judgement coming from about their unit economics?

(not pointing the finger only at you, at least you identified that gross margins is the correct thing to look at rather than net profit!)

Anthropic is not MoviePass. Its unit economics will be fine after it decides to optimize for profitability.

Inference has dropped by like 75% from a year ago. While anthropic does offer more tokens now for the same money, the value of the business is based on an expectation of future profits. There are dozens, if not hundreds of examples of companies being valued this way.

on the API, their margins are very high

no, it is discounted expected future cash flows

Maybe they are struggling to put together money for datacenter buildout (Capex).

and i think here lies the chess move by Elon

he's trying to steal OpenAI's limelight and shit on their road show

I'm actually quite surprised how much money Anthropic pulls

Also surprised that OpenAI is not pulling as much as I thought

All in all it looks like OpenAI is in a bit of a vulnerable position.

seems to be a well understood angle inside anthropic — colossus use expands subscriber capacity; training goes to aws/gcp

https://x.ai/news/anthropic-compute-partnership https://www.anthropic.com/news/higher-limits-spacex

This seems like it's because openAI actually partnered with Microsoft and has to give them 20% of their revenue. Anthropic isn't partnering with their cloud providers so it makes sense to me they count top line revenue and then give Amazon payment as an expense. Also the numbers seem pretty minor compared to anthropic $49B run rate. The article mentioned an openAI payment of around $500M.

That is 100% valid, and I don't disagree.

They’ve claimed a big revenue run rate for this quarter. But it’s non-GAAP, so you kind of have to assume shenanigans. Earlier this year they were telling a court their revenue was like 1/4 of what they had told the public. I consider the number they came up with when they had to worry about committing perjury to be more trustworthy (because I’m a pill), so that would also indicate shenanigans. My guess is they are inflating that revenue run rate figure by booking token pre-payments from enterprise contracts now instead of spreading it over time as GAAP would mandate. And at the same time their big enterprise clients are talking about scaling back their usage.

So we’ve got a combination of signs that they’ve been inflating their revenue growth, and signs that their customers are losing their appetite for contributing to that revenue growth. I suppose it’s not a slam dunk, but it feels to me like as strong an indicator as one could hope for a private blitzscaler startup like this.

No new models. Same janky slop but with a bunch of RL and benchmark cheating. A pretend future model which is just the current model but with a longer COT and gated away.

The same evidence that they are growing. Tea leaves.

But will you need overpriced Codex and Claude? Most business code is crappy SaaS and glorified CRUD apps & I can build those with Sonnet / DeepSeek just fine …

I mean as a long-term product, not as a offer to join a hype cycle.

I can assure you they are already seeing divestment in preparation.

I imagine the vast majority don’t care. All they care about is trying to hit their 401k or Roth IRA contributions for the month.

> Perhaps they’re afraid announcement would trigger divestment

S&P don't get a choice around whether they announce their methodology or not.

That said, the rule change at the NASDAQ 100 doesn't seem to have impacted pricing or allocation. I can't imagine that many people are that concerned about this. (I posted the public-comment request from S&P to HN [1]. The response was crickets.)

[1] https://news.ycombinator.com/item?id=48054324

Yes, correct. Although, even for some company folks, if it crashes, they get burned since they typically have blackouts post IPO.

Of course, some special souls are excluded from blackouts lol.

Most bank runs tend to be driven by vibes, not numbers though.

The good news is that these folks seem to be in possession of a vibe-rator.

Surely NATO has enough competent people to know that the biggest and only threat remains the USA and pretty much any othed conflict is a direct result of provocation or invasion by the US, right? Or do we all watch Jarhead 2-5 on repeat until all we can say is OORAH

Neither of those are full faith and credit guarantees. Congress can nullify them in a way it Constitutionally cannot actual debts.

It goes beyond that. $175 trillion includes all future entitlement spending not debt, it’s crazy to call all future entitlement spending for every living person debt. By that metric there’s essentially no such thing as a solvent government anywhere in the world and there never has been in modern history.

> American market valuation is more than twice the entire US GDP

Stock versus flow.

> would it necessarily mean the other stocks they might've bought (i.e. the rest of the market) will not get the cash infusion and will thus likely drop in valuation?

¯\_(ツ)_/¯.

Almost certainly, to some degree. But that doesn’t mean anything has to drop. Just not rise, or not rise as much as it would have. Or potentially some other company that would have gone public or sold shares doesn’t do it now.

Yes, but they're not directly correlated. Of course events can affect them both! Going to war would both increase the cost of living and (some) asset prices would go way up. But that doesn't mean they should be measured together like that.

Just to add some color using real numbers: Berkshire's Q1 cash pile was $397.4 billion, which is nearly 60% of its investable assets.

> SPY not be such a great idea with SpaceX launch upcoming since it will be included into it immediately

S&P has not announced a methodology change yet.

The only reason this happened was due to taxpayers bailing out financial institutions. This only exacerbated an insane amount of moral hazard already present in the market following previous bailouts.

Unfortunately, the US Government continued to run themselves into the ground spending-wise and may have a difficult time with another bailout, unless everyone pretty much agrees that we cannot have a USG failure, so they all pretend like nothing happened.

Eventually the merry-go-round stops, I'm just not sure what the catalyst will be, and it might be 100 years from now.

I am old enough to have had multiple career changes since starting on a major firm’s rates floor in 2008. These IPOs are tiny compared to the overall stock market and the stock market is absolutely tiny compared to debt markets. People consistently underestimate the size of the world economy or even their local economy. The world may look small from an orion capsule near the moon but almost every aspect of human society is bigger than most people can reason about. It is possible these IPOs have an outsized impact on sentiment for weird reasons. But it won’t be an actual outsized impact on capital markets.

Edit: I should add the AI bubble can absolutely burst but there is no reason to believe these IPOs are the end of the ride. If I knew I would be…

Without massive government intervention it probably would have

> things have changed now in a sense that handful of companies are large percentage of the stock market to the point where one has to question why invest in “s&p 500” vs “s&p 25-ish”

A small number of companies have always driven most stock-market gains. Betting on size isn't fundamentally a bad bet. But it is a bet against value and the historical tendency for small companies to be higher risk and higher reward.

> Hasn't there been a _lot_ of debt to buy up Nvidia GPUs?

I believe that's been concentrated at the hyperscaler layer, and subsided when the aforementioned private-credit scare reared its head. (I haven't heard a big datacenter debt deal announced in a while. Though of course that doesn't mean they aren't being done.)

And we're still extremely compute constrained. We need more Nvidia GPUs, RAM, power.

> IIRC every bubble he studied always mean reverted

This really depends on how we're defining these things. Let's call a stock-market bubble a period of elevated multiples. That can mean revert by prices decreasing while earnings stay constant or by prices staying constant and earnings rising. (Alternatively, both earnings and multiples can rise and fall.)