We are quite short of compute, and that is going to result in compute becoming very expensive for complex agentic workflows even as single-turn chatbots get cheaper. So the richest companies & most pressing use cases will use AI agents & everyone else will be stuck with chatbots?
ECONOMY
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AI automation creates more human work
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We’ve automated every single thing we could with AI agents. And yet, there’s way more human work to do than ever. We’ve grown from 4 to 30 human employees since GPT-3. I wrote a report on the structural reasons: how AI makes expert competence cheap and why that drives up demand.
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Token Economics: LLM Utility, Demand, Supply, Monetization
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→Token utility: the model, context length, and level of interactivity required
→ Token demand: the volume of tokens required
→ Token supply: the optimal infrastructure given the token utility and demand
→ Token monetization: cost-based and value-based pricing to maximize -
Cloudflare CEO explains how he chooses employees to replace with AI
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How I Choose Which Cloudflare Employees to Replace With #AI by @eastdakota "Two weeks ago I laid off more than 20% of my workforce."
(link to article in the reply) There's a book about what this means for the overall economy. New edition covering the job market and economic -
AI’s potential electricity and water footprint by 2030
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Individual use is small, but at aggregate scale, resource usage is higher. By 2030, AI may use as much electricity as Japan. Water use will remain less than 1% of total US water use in 2030, but that can still strain local utilities. (and this problem alone took many runs)
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Estimates of AI data center power and water usage
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Estimates of power usage here: https://
arxiv.org/pdf/2509.20241 (these numbers also match independent assessments) Estimates of water usage here: https://
eta-publications.lbl.gov/sites/default/
files/2024-12/lbnl-2024-united-states-data-center-energy-usage-report_1.pdf
… (note it only includes direct cooling, not water for electricity generation) -
SpaceX’s AI TAM vs. Anthropic, OpenAI, and Google IPOs
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If the TAM for @SpaceX
's IPO is $26.5 trillion in AI, what's the right number for @AnthropicAI
, @OpenAI and @Google ? -
SpaceX Expands AI Compute-as-a-Service Offering
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As the recently expanded partnership with @AnthropicAI demonstrates, @SpaceX is offering AI compute as a service at significant scale. We are in discussions with other companies to do the same. Over time, especially with orbital data centers, we expect to serve AI at extremely
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Anthropic Projected to Double Revenue to $10.9 Billion
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Even bigger win for Anthropic: Anthropic’s revenue is set to more than double to $10.9 billion in the second quarter, an explosive rate of growth that will help it turn an operating profit for the first time. About $500m in profit. Nuts.
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Anthropic Secures Additional Compute Capacity from Colossus Clusters
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Holy: After Anthropic secured compute capacity from Colossus 1, it is now also getting access to compute from Colossus 2. But to be honest: I somehow expected to his. Grok certainly doesn’t need all that compute.