AI Semiconductor Landscape feat. Dylan Patel | BG2 w/ Bill Gurley & Brad Gerstner

**Dylan Patel** (0:00)
If BG2 is scaling dead, then why is Mark Zuckerberg building a 2 gigawatt data center in Louisiana? Why is Amazon building these multi-gigawatt data centers? Why is Google, why is Microsoft building multiple gigawatt data centers, plus buying billions and billions of dollars of fiber to connect them together, because they think, hey, I need to win on scale, so let me just connect all the data centers together with super high bandwidth, so then I can make them act like one data center, towards one job. So this whole is scaling over narrative and it falls on its face when you see what the people who know the best are spending on.

**Brad Gerstner** (0:44)
Great to be here, Psyched, you both are in the shop today. Dylan, this is one of the things we've been talking about all year, which is how the world of compute is radically changing. So Bill, why don't you tell folks who Dylan is, and let's get started.

**Bill Gurley** (0:59)
Yeah, we're thrilled to have Dylan Patel with us from SemiAnalysis. Dylan has quickly built, I think, the most respected research group on global semiconductor industry. And so what we thought we'd do today is dive deep on the intersection, I think, between everything Dylan knows from a technical perspective about the architectures that are out there, about the scaling, about the key players in the market globally, the supply chain, and the best and the brightest of people we know are all listening and reading Dylan's work. And then connect it to some of the business issues that our audience cares about and see where it comes out. What I was hoping to do is kind of get a moment in time snapshot of all the semiconductor activity that relates to this big AI wave and try and put it in perspective.

**Brad Gerstner** (1:50)
Dylan, how did you get into this?

**Dylan Patel** (1:52)
So when I was eight, my Xbox broke and I have immigrant parents. I grew up in rural Georgia, so I didn't have much to do besides be a nerd. And I couldn't tell them I broke my Xbox. I had to open it up, short the temperature sensor, and fix it. And that was the way to fix it. I didn't know what I was doing at the time, but then I stayed on those forms. And then I became a form warrior, right? You see those people in the comments always yelling at you, Brad. It's like, that was me, right? As a child. And you didn't know as a child then, but you know.

**Brad Gerstner** (2:19)
Awesome.

**Dylan Patel** (2:20)
It was just like arguing with people online as a child and then being passionate. As soon as I started making money, I was reading earnings from semiconductor companies and investing in them with my internship money. And yeah, reading technical stuff as well, of course, and then working a little bit. And then yeah.

**Brad Gerstner** (2:36)
And just tell us, give us a quick thumbnail on SemiAnalysis today. Like what is the business?

**Dylan Patel** (2:41)
Yeah, so today we are a semiconductor research firm, AI research firm. We service companies. Our biggest customers are all hyperscalers, the largest semiconductor companies, private equity as well as hedge funds. And we sell data around where every data center in the world is, what the power is in each quarter, how the build outs are going. We sell data around fabs. We track all 1500 fabs in the world. For your purposes, only 50 of them matter, but like all 1500 fabs around the world. Same thing with the supply chain of whether it be cables or servers or boards or transformer substation equipment. We try and track all of this on a very number driven basis as well as forecasting. And then we do consulting around those areas.

**Brad Gerstner** (3:21)
Yes. I mean, Bill, you and I talked about this. For Altimeter, our team talks with Dylan and Dylan's team all the time. I think you're right.
He's quickly emerged, really, just through hustle hard work, doing the grindy stuff that matters, I think is a benchmark for what's going on in the semiconductor industry. We're at this, I suggested, we're two years into this, maybe, this build out, and it's been hyperkinetic. And one of the things Bill and I are talking about is we enter the end of 2024, taking a deep breath, thinking about 25, 26 and beyond, because a lot of things are changing, and there's a lot of debates. And it's going to have consequence for trillions of dollars of value in the public markets, in the private markets, how the hyperscalers are investing, and where we go from here. So Bill, why don't you take us a little bit through the start of the questions?