Dylan Patel: observation

Transcript context

…But the emergency is so big where Anthropic and OpenAI are like, “We could make a trillion dollars right now, but we’re just bottlenecked on the mirrors that go into the ASML machines.” How can we make more mirrors if we spend $100 billion on this? That’s the situation we’re going to be in pretty soon. We’re not going to be able to solve that supply constraint? That just seems quite hard to imagine. You’ve seen people do funny arbitrages here where they buy turbines and then try and resell them, because the value of a turbine is way more since it’s the thing bottlenecking your data center. I think if anyone had $400 million and the ability to convince ASML to sell them an EUV tool, they should totally just go buy one, wait, and then sell it for north of a billion dollars. But ultimately, yes, capitalism will cause these things to expand. But it’s a whip. It takes a long time for the whip signal to get to the tail end of that. The supply chain doesn’t react immediately. In fact, you go talk to someone at Carl Zeiss, they’re like, “Yeah, yeah, yeah, we need to make 100 EUV tools by the end of the decade.” When we had our episode earlier this year, they didn’t even think they needed to make that many, enough mirrors to make 100 EUV tools a year. Now they’re like, “Okay, we need to do that.” But in reality, because of all the economics of what’s going on, it should be even more. It takes so long to pill. Suppose that every single company in the stack got private equitied. Somebody came in who was super AGI-pilled and was like, “We’re going to maximize production.” What do you think the physical constraints on making more things would be? The reason I ask is we’re pretty soon going to be in a world where the lab revenue, or just AI cash flows — because obviously the accelerators also have these huge cash flows — will be so big that you can just fund extreme expansion of all this production from cash flows themselves.…

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