Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy
[00:00:00] S0: As you continue to assess and try to be the world's best informed person on both the trajectory of supply and demand, what are things that you wish you knew to make that understanding that you don't know?
· Dylan Patel
[00:00:00] S1: I think the hardest area for us and for everyone is understanding tokenomics – the economics of tokens. I think we have a really tremendously good insight into how much it costs to run infrastructure, what the cost of tokens are, what the cost of models are, what the margins of these labs are. But the usage and adoption is what's really difficult to model. Continuously, right? January, we had crazy estimates for February. Anthropic smashed them. How do we calibrate this model? What are the data sources for this? February, we had crazy assumptions for March. I know people were like, you're crazy, Dylan. And then they smashed them. Everyone sees the number of 10 billion, and they're like, what the fuck? How do they add 10 billion of revenue? Who's using all these tokens? Why are they using them? What are they building with them? And then more importantly, with what they're building with these tokens, how is that actually diffusing into the economy, and what value is that generating? Because it's not really something that you can capture in any GDP statistic. All of the value of the tokens that I use get transformed into better information, which I then sell at a discount to what people used to sell information for relatively. And therefore, that information is now making its way throughout the economy, and people are making better investment decisions or better competitive decisions if they're a semiconductor company or a data center company or hyperscaler. What is the value of this? What has that done to the economy? It's clearly, by every subjective metric, amazing. But where is the phantom GDP? What is the phantom GDP? How do we track the real economic value? Because the GDP metrics are not accurate if you were to say, what is the GDP that Dylan Patel is making? It's tiny, compared to the value that I think is being created. And I think you would say the same for Patrick. What is the value being created by these tokens? Not on a basis of simple, what is the knock-on effect of all the things that these things are doing? I think that's the real question and challenge. It's hard to measure. I think we've got a tremendous reading on the supply side of things. I think we've got a tremendous reading on even a lot of the demand side signals. But it's, what is the value these tokens are generating? That's hard to quantify and measure.
· Patrick O'Shaughnessy, Dylan Patel
[00:00:00] S0: I hope we get a chance to do this every three months because this changes so quickly. What do you think is going to happen next? When I come back three months from now and we're in San Francisco together again, what do you expect? [00:00:00] S1: Large-scale protests. [00:00:00] S0: Really? [00:00:00] S1: Yeah, I think there will be a large-scale protest against Anthropic and OpenAI. People hate AI. AI is less popular than ICE, less popular than politicians. With Anthropic adding so much revenue, that's going to start causing business changes downstream. People are going to get more and more scared of AI. They'll start blaming more and more of their own problems and things that are global, have been deep-seated problems for a long time. Those will bubble up and be blamed on AI. Probably some politician or some influencer will be able to start taking and weaponizing AI against people. You look at the comments of news articles where Sam Altman had a Molotov cocktail thrown at his house twice in two weeks. People were cheering it on. And this is just the beginning. So I think we'll see large-scale protests against AI in three months. [00:00:00] S0: What is the counterweight to that? How should the AI industry head that off?
· Patrick O'Shaughnessy, Dylan Patel
[00:00:00] S0: What is the counterweight to that? How should the AI industry head that off? [00:00:00] S1: First of all, Sam Altman and Dario have to stop getting on interviews. They're so uncharismatic. I don't know what they're doing. Every interview they do is like, wow, normal people are going to hate you even more. Sam being on Tucker Carlson probably made all Republicans hate OpenAI. I'm just guessing. Same with Dario. I think that's first. Two, they need to start showing uplifting things that can be done with AI. Three, they need to stop talking about how the capabilities are going to change the whole world constantly because then people are going to get fear of that capability because they have no connection. There's no connection to it either. The average person doesn't know an Anthropic employee. The average person doesn't know an OpenAI employee. The average person doesn't know who these people are, what their goals are, and they just view them as a sneaky cabal of 5,000 people at this company that are going to change the world and automate all the jobs and destroy society. That's what they view it as. And as people who are funding the building of all these data centers and power plants that are going to pollute the world. They don't quite understand what's happening. So they have to stop talking about the future thing that's going to happen and only talk about present – how uplifting AI is. I think there's a huge reorg and rebranding that needs to be done. [00:00:00] S0: This is so much fun. I love doing this with you. Thanks for your time.
· Patrick O'Shaughnessy, Dylan Patel
[00:00:00] S0: This is so much fun. I love doing this with you. Thanks for your time. [00:00:00] S1: Awesome, thanks.