Gavin Baker: Anthropic S-1 shows $2.08 revenue per compute dollar

The debate around AI spending has often assumed that cheaper tokens would shrink the pie for hardware makers. Anthropic's S-1, filed Monday, offers a counterexample: revenue per compute dollar rose to $2.08 from $0.40 a year earlier, even as prices fell. Gavin Baker, who runs Atreides Management, had predicted the filing would "break a lot of people's brains" because many investors assume tokens are subsidized. After the filing, he posted: "Brains were indeed broken."

Baker's broader point is that AI demand has shown strong elasticity: lower prices lead to so much more use that total spending on compute goes up. He argues revenue per GPU can rise as token prices fall, as long as each GPU produces enough extra tokens. Social Capital's data showing H100 rental prices up 45% since December is consistent with that view. NVIDIA's own ties to Anthropic—a $10 billion investment and recent large-scale use of its systems—make the lab a direct indicator for the chipmaker.

The stock already reflects plenty of worry. NVIDIA trades at 18x forward earnings, just above the 17x low it hit on Oct. 23 and far below its three-year average of 30x. Citadel's Ken Griffin has warned that if supply ever outruns demand, "marginal pricing will actually go into freefall." Baker's elasticity argument, if it holds, would suggest that scenario is not imminent—but the October surge in Anthropic's annualized revenue is Baker's own estimate, and NVIDIA's Nov. 17 report is the next real test.