On Saturday, Anthropic CEO Dario Amodei published a 3,800-word essay called “We Must Pace the Frontier.”
Sam Altman agreed within hours. And Elon Musk needed three words: “Dario is right.”
Equity carnage instantly followed. By Monday’s close, the Philadelphia Semiconductor Index $SOXX ( ▲ 2.07% ) was down almost 6%.
What’s The Big Skinny? One essay. Two endorsements. Zero cancelled contracts. And yet Wall Street wants to reprice every company that sells a chip, a transformer, or a megawatt. Overreact much?
I’m convinced so on the heels of my September 9th conversation leading data center CEO - TeraWulf’s Paul Prager [Listen to the full interview here]
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Before you reflexively dismiss me as an AI permabull, I’ll have you know that I consider David Roche’s bear case – published in Engelsberg Ideas on Monday – the cleanest bear case I’ve read all year.
It deserves a hearing (before my dismissal)…
Since 2013, more than $3.1 trillion has gone into American AI – a figure Roche says already includes off-balance-sheet commitments.
Inside that figure sits $356 billion of long-term debt, $248 billion of lease liabilities, and $1.5 trillion of purchase commitments.
Scary, huh? Here’s the rub…
Roche’s AI bear case focuses on financing. But Monday’s AI selloff was about demand. And it’s not going anywhere, even if frontier model development slows down.
How can I be so sure? It’s simple really. AI demand can be split into two curves.
The capability curve: How fast leading labs push to grow in technical skill, reasoning, problem-solving over time, and apocalyptic capabilities. This curve makes headlines.
The consumption curve: How much AI gets consumed by everyone, every month, new model or not. This curve quietly marches on and higher.
Anthropic’s Amodei asked to slow the first. True to form, nobody said a word about the second. Yet that’s the most critical factor for investors, as the latest data, not fearmongering in the headlines demonstrates…
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Evercore’s base case for AI token demand shows a ramp to roughly 4,000 quadrillion a year by 2030.
Don’t have any context for a quadrillion? This is all you need to know – the growth is more than 20 times today’s consumption.
Now look at what’s growing in the chart above…
It’s not the frontier models, represented by the orange sliver, which is barely visible even in 2030.
Instead, Agentic AI is the fattest block in the stack by 2030, with consumer and enterprise applications next.
Translation? The one input Amodei wants throttled is not the major contributor to overall AI demand.
Why? Because most companies don’t rely on frontier models. Instead, they route by task – hard reasoning to the frontier, everything repetitive to models that already exist because they’re cheap and good enough.
Case in point: Per OpenRouter, the token share held by Google, OpenAI and Anthropic collapsed from roughly 70% in June 2025 to about 30% a year later. The seven highest-volume models now all carry open weights (i.e. what’s cheap and good enough).
Now let’s get to the part nobody traded Monday…
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Buy WULF… And Everyone Else Who Owns The Megawatts
In the eleven months through August, Anthropic – the lab that asked for the AI pause – entered compute agreements covering at least 14.8 gigawatts, equal to as much as $517 billion per The Information.
Hard to take the calls for a pause, when they’re actions scream to the contrary.
Or as D.A. Davidson’s Gil Luria put it plainly: “They’re being Machiavellian here.”
Indeed! So watch what they sign, not what they say.
If you do it’s clear - the pace of AI capabilities might slow on the bleeding edge, but the pace of consumption is only going (way) higher from here, which brings us back to my recent interview…
I sat down with TeraWulf CEO Paul Prager on September 9 – three days before Amodei’s essay, five before the selloff.
The last time Prager and I talked, this industry was still scrambling to land the first customers at data center sites with guaranteed power. That phase has long passed.
It’s all about delivering. Or as Prager put it, “Execution is going to be the determining factor of whether or not you get a repeat customer.”
What about the AI demand fears gripping the markets recently? “I’m not sure I share that concern,” said Prager.
He’s got the receipts to back it up.
Revenue: $44.8 million in the second-quarter with 71% coming from AI data center leasing rather than bitcoin mining.
Balance sheet: $3.0 billion of cash.
Mega tenant: In July, the company signed Anthropic to a 20-year lease at Hawesville, Kentucky: 401 megawatts and roughly $19 billion of contracted revenue, up to $35 billion with both extensions.
Set that all against a $7.72 billion market cap at Monday’s close and it’s not hard to see the bull thesis.
One customer. One contract. Two and a half times the entire company.
The pipeline isn’t thinning, either.
At the Muskie campus in eastern Kentucky, Prager told me there are “six players in that data room killing us with questions… [it’s] the most competitive and active data room we’ve had.”
Meanwhile, existing customers keep asking him to accelerate delivery.
Prager won’t tell you everybody makes it. “I think we’re probably 12 months away from a real fallout in the space,” he said.
He’s right, which is why you need a screen. Run it on every AI data center name you own.
Do you own the energy infrastructure or rent it?
Is the revenue contracted and to whom?
Are you taking technology risk?
Answer yes, yes and no, and a frontier pause is noise. It’s all about the consumption demand. Heading way higher.
The Big Skinny: Wall Street just marked down the people who own the power because three men who rent it asked for more time to think. Keep buying WULF… and every operator that owns its megawatts, contracts its revenue to credit that can pay, and won’t guess what a GPU is worth in 2029.
| Before You Run… |
Watch the full Paul Prager interview on The Upside here.
One number to remember: $517 billion. That’s what the lab asking for a slowdown committed to compute in eleven months.
For entertainment/educational purposes only. Not financial, legal, or tax advice; not a recommendation or solicitation. Terms & Conditions: TheBigSkinny.com.
