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PM Patrick McKenzie Patrick McKenzie Spent six years at Stripe working on payments infrastructure before moving to an advisory role there, after founding several small software companies over the p...

“Anthropic says in the S-1, 'we have historically operated in a compute-constrained environment in which demand for compute has exceeded the supply available to us.' … Their Q3 revenue softening isn't a demand story. It's a supply story. They're running all the GPUs they have and it just isn't enough. … I think analysts who read this as softening demand would need to explain tapping spot for 50% of their compute spend.”

Complex Systems with Patrick McKenzie (patio11) · Startups & Venture · November 2026

“Anthropic says in the S-1, 'we have historically operated in a compute-constrained environment in which demand for compute has exceeded the supply available to us.' … Their Q3 revenue softening isn't a demand story. It's a supply story. They're running all the GPUs they have and it just isn't enough. … I think analysts who read this as softening demand would need to explain tapping spot for 50% of their compute spend.” — Patrick McKenzie, Complex Systems with Patrick McKenzie (patio11)

Context

In a postscript added after recording, Patrick revises his earlier view that Anthropic's slower Q3 growth reflected how customer cohorts stack up. He says the S-1 shows Anthropic buying GPUs on the spot market at a premium, so the slowdown points to a lack of chips, not a lack of customers.

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Transcript

Complex Systems with Patrick McKenzie (patio11) Around 24:40 into the episode
Patrick McKenzie

About 15x in the first half, right?

Zvi Mowshowitz

…There's also some talk about quarter three just being a slow period for growth, relatively speaking, due to the calendar. But my expectation is that quarter three was relatively slow, but that quarter four has picked up again, and you will see some very, very large growth. Numbers out of Anthropic.

Patrick McKenzie

…12 to 18 months in advance. And so in roughly Q1 or Q2 of 2025, they had to make a guess as to how compute efficient a yet to be released Opus 5.5 would be and how many customers would be willing to use it. Anthropic seems to have underestimated Horn's fees, parallelance elsewhere, seems perhaps simply not to have been aggressive enough in anticipatorily contracting against the coming demand. Their Q3 revenue softening isn't a demand story. It's a supply story. They're running all the GPUs they have and it just isn't enough. Supporting evidence. They talk about hitting the spot market for GPUs for $5 billion at substantially more than their multi-year commitments typically run in such a way as to eat 10% of the margin just from the shift in the mix. You'd assume low tens of percent of revenue is served by Spot Compute, but that spot compute made up 50% of their compute spend for the quarter. The S1 says short-term…

Zvi Mowshowitz

Yep, it's really hard to say. There's a lot of different factors. We have very little visibility for a variety of obvious reasons. Reasons, we have to endlessly hear the same people predict the imminent fall of OpenAI and Anthropic and the imminent commodification of the models and the imminent…

Patrick McKenzie

I think reasonably well-calibrated people could think, you know, just on priors, not paying much attention to what AI is doing. I've just heard this story before. This time is different as a meme. You know, this feels in some ways like the classic examples from Bern Hobart and Tobias's book on…

Zvi Mowshowitz

There are so many differences with that model that exists here, one of which is that the initial investment is not initially idle or useless. There is actually overwhelming demand for everything that you can get right now, while the systems get clearly better at a very rapid pace. So, even if…

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

More from Complex Systems with Patrick McKenzie (patio11)

“Anthropic has been incredibly conservative, in my opinion, on its forward commitments and its acquisition of compute. OpenAI has been much, much more aggressive. And still, OpenAI proved to be more conservative than it would have been optimal to be. … The cost of not having the compute available when you go really well is very high. … The only way this works out badly for them is if the price of compute actively goes down substantially, so they can't resell it, and there's no demand for it. And that is a very strange world that I do not expect.” — Zvi Mowshowitz, Complex Systems with Patrick McKenzie (patio11) “Here they call recursive self-improvement 'closing the loop,' to be more business friendly. But they say their entire business model is they want to close the loop. They are worried that if someone else closes the loop before they close the loop, they will be out of the loop and they will lose. So they intend to close the loop as fast as possible and as much as possible.” — Zvi Mowshowitz, Complex Systems with Patrick McKenzie (patio11)