Dylan Patel - The Infinite Demand for Tokens, Claude Mythos, and Supply Constraints

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus along with all of our podcasts at colossus.com.

**SPEAKER_2** (2:00)
Patrick O'Shaughnessy is the CEO of PositiveSum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of PositiveSum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PositiveSum may maintain positions in the securities discussed in this podcast. To learn more, visit p-s-u-m dot v-c.

**Patrick O'Shaughnessy** (2:28)
This is my second conversation with Dylan Patel. Dylan is the founder and CEO of SemiAnalysis, where he tracks the semiconductor supply chain and AI infrastructure build out. This conversation is about the supply and demand of tokens. On demand, Dylan describes something completely explosive. He explains why the frontier model is the only model anyone wants and willingness to pay for it is nearly unbounded. His own firm has gone from tens of thousands of dollars in I spent last year to 7 million run rate this year.
On supply, we walk through the bottlenecks across memory, logic, and fab equipment that will determine how fast any of this can scale. We also cover mythos and what the leading labs need to do to fix their growing perception problem. Please enjoy my conversation with Dylan Patel.
You told me this incredible story about how your own team's use of tokens has changed dramatically this year.

**Dylan Patel** (3:15)
Yeah.

**Patrick O'Shaughnessy** (3:15)
Can you retell that story and what it is teaching you about what's going on in the world?

**Dylan Patel** (3:20)
Last year, we thought we were heavy users of AI. Everyone's using ChatGPT. Everyone's using Claude, providing whatever subscriptions anyone wants on the order of spend of tens of thousands of dollars for our firm. This year, the spend is just skyrocketed. It really started in late December with Opus. That included Doug Laughlin, who is president. He's very much leading the charge in the sense of non-technical people using AI for coding. So he's basically peeled the whole firm slowly over time. I think he's been the leader in doing that. Obviously, the engineers were using it anyways, but spend in January just started to inflect and rocket and rocket and rocket and rocket. We signed an enterprise contract with Anthropic, and it's gone to the point where now, I think when I last talked to you, it was 5 million spend rate. It's actually 7 million spend rate now. So we're spending 7 million.

**Patrick O'Shaughnessy** (4:09)
That was last week, by the way.

**Dylan Patel** (4:11)
A lot of that is just the usage. People who have never coded before are using Claude code and spending thousands of dollars, sometimes a day. It also like some people spend thousands of dollars one day, or spend a couple of hundred dollars a couple of days, and then they go back to thousand dollars. It's very variable across each individual user, but across a firm, we're spending 7 million dollars a year now on Claude code at the current rate versus our salary expense being in the neighborhood of $25 million.