SemiAnalysis Transcript: Why Hardware-Software Co-Design Is AI's Real 100x Efficiency Driver
July 5, 2026 - Sequoia Capital Podcast Interview with Dylan Patel
Introduction and the Growth of SemiAnalysis
Shaun Maguire: I think it is really fun inside of SemiAnalysis because you have 90 people, and a big chunk of them are technologists and engineers across the whole supply chain, and then a big chunk is people who were formerly at hedge funds. You see these arguments where people are like, "Oh, well that doesn't matter," and then someone is like, "Well, but cost," and then the engineer is like, "No, no, no, but this technology is the coolest." You see this organically fight it out. We are pretty informal, and given the fact that you were a forum moderator, you can imagine what the environment is like.
Dylan Patel: You don't wrestle with a pig because a pig enjoys it, right? Exactly.
Shaun Maguire: We are here in the SemiAnalysis office with Dylan Patel. I am Shaun from Sequoia, and my partner Sonya Huang is here too. It is pretty insane what you've done. Semiconductors five years ago were not very sexy in the West. They were sexy in the East, but people here in the West had kind of forgotten about them. You did not forget about them, though. You went very long. You created probably the premier research company in the space that has been educating the world on the state of the art, from very technical details to the supply chain to the bigger picture. There are rumors that SemiAnalysis recently passed $100 million of revenue. I don't know how accurate those are. Whatever the numbers are, you guys are crushing it.
Dylan Patel: It is as accurate as the information is. Yeah, cool. You never know.
Shaun Maguire: There are also rumors that you might start a venture fund. I hear all the time in the ecosystem people wanting affiliation with SemiAnalysis. You've built this trusted brand, and so whatever you do, it is working. This is clearly just the beginning of the journey for you. Congratulations on all of that. But how did this happen? My first question is: what is your background? How did you kind of get to where you are now?
Motel Kid Origins
Dylan Patel: Well, when I was a young boy coming out of the womb... No. So, okay, I grew up in a small business. My parents had a motel, and we lived in the motel. We later had a gas station. So, I was selling. I joke a lot of times that the first neural network I trained was racially and visually profiling people based on when they entered the gas station to pick which cigarette to grab. Basically, the cigarettes were all displayed across the top, and I was too short to actually reach them. Technically, it wasn't legal to sell cigarettes at that age, but whatever, I had to move the step stool over to the right area.
Shaun Maguire: I started working my first job before it was legal, too. It is good experience.
Dylan Patel: Well, I didn't get paid, right? It was a family business.
Shaun Maguire: Same here.
Dylan Patel: But yeah, we had our motel, and then across the street was our gas station. Sometimes someone would walk in, and if an old white lady with curly hair walked in, I'd move the ladder or the step stool over to where the Camels are. Depending on different age, demographic, profession, race, etc., I would move the step stool over. I joke this was the first neural network I trained because if I waited for them to tell me, I'd have to move it over and then step up, versus just being ready. Menthols versus 100 slims and all these things. I joke that was the first neural network I trained. But I grew up in family businesses, lived in a motel, and it all really goes back to when it was my 8th birthday.
Xbox Repair and the Spark of Hardware Passion
Dylan Patel: My birthday is in May, and it was April when the Xbox 360 was announced. For my birthday, I didn't ask for the Xbox, or I didn't ask for a birthday gift. My parents asked what I wanted, and I asked for it for Christmas. We celebrated Christmas, but there was no way, at least at the time, I thought they would give me the Xbox 360 for Christmas, so I asked for my birthday to have it for Christmas. Anyways, Christmas comes around, and I get it. Fast forward a couple of months, my cousin who lives in Alabama—they also lived in a motel—was going to come over for spring break. We were going to just hang out at my house. He is in between me and my older brother in age. My brother is a bit more jockish, so he didn't really care too much about the Xbox. He played sometimes, but he didn't really care. But my cousin, I wanted him to think I was cool, right? So, I bragged many times on the phone. I was like, "Yeah, I got an Xbox." And then the Xbox broke. There was a hardware defect called the Red Ring of Death.
Dylan Patel: Long story short, I had to open it up and short the temperature sensor, and it fixed it. There were many other tricks I tried first, and none of them worked. So, that is sort of how I got into hardware. It opened Pandora's box. By the time I was 12, I was on these forums a lot, reading and posting.
From Internet Forums to Semiconductors
Dylan Patel: This was around the time when Reddit ate all other forums, and so I became a moderator of Android, Apple, and Google, as well as hardware, and was looking at Intel, Nvidia, and AMD on all these other forums. I was on Build a PC. All these forums, I was watching, reading, and posting a lot, but some of them I was moderating a lot. Watching smartphones develop from very simple to speed racing to being technologically more advanced than PCs in many ways architecturally, and the same with GPUs, just tracking and watching that, reading every comment, always having the economic tinge because I grew up in a small business. So, I was always looking at the economics. There was a time where all the neckbeards on the internet loved AMD GPUs, and I personally had bought an AMD GPU too because of price-performance. But then when it came down to what is technically better, I'd always be like, "No, Nvidia is better because they use a smaller chip to get better performance at better power efficiencies, and their margin is better." So, I would always talk about how Nvidia's margins were better than AMD's in the GPU landscape, and so it was very fun.
Shaun Maguire: And you were 12 at the time.
Dylan Patel: I started moderating when I was 12, but this is all through my teenage, tween age, and high school years.
Shaun Maguire: Did you have any other weird hobbies, or was it just semiconductors?
Dylan Patel: I played a ton of Starcraft. At one point, I was Grandmaster on the North American ladder in Starcraft 2. Very serious.
Shaun Maguire: So, you've gotten obsessively good at multiple things.
Dylan Patel: Yeah, obsession is good.
Shaun Maguire: How were your grades?
Dylan Patel: They were decent. I would say I had mostly A's, but there were classes that I thought were really boring or I just didn't enjoy. Like Spanish, I got not the greatest grades, but I speak fluent Spanish, by the way, so it is really dumb.
Shaun Maguire: Maybe that is why you didn't get a good grade.
Dylan Patel: I didn't learn Spanish until later, to be fair. But yeah, my grades were fine. They were fine enough for Asian parents. I was better than most of the school, but it wasn't like tryhard maxing for straight A's.
Shaun Maguire: Okay, so you are very much a student of the internet, then. This is how you developed this expertise. At what point do you decide to start SemiAnalysis, and what has been the biggest surprise since starting the company?
From Quant to Founder
Dylan Patel: Yeah, so I went to school and got a few degrees in stuff that wasn't related to semiconductors. I was a quant for two years at a small quant risk firm. Then, basically, there was a culmination of events that happened. One was that I got screwed out of a bonus. I had made my company many millions of revenue—risk-free revenue—because I exploited a risk thing in the market, well over $10 million, and then someone else took credit for my work. Eventually, I did get right-sized, but I lost the social contract with the company I was working with. My grandparents grew up in my house with us, or in the motel with us, they lived with us, so I was very close with them. My grandmother got dementia, she forgot who I was, and she fell down some stairs, had a tragic accident, and passed away. All of that happened in early 2020. Additionally, there were some relationship things, so there were a few things that happened that made me very sad. Then COVID happened, and my brother was like, "Dude, just come stay with me." He lived in Nashville, so I came and stayed with him in Nashville. We were like, "Oh, lockdowns will be a few weeks. You can stay with me while they happen, and then you can go back home." Famous last words. Lockdowns lasted much longer.
Dylan Patel: Living with my brother for a few months, I didn't know what I was doing. I was now at my brother's home, everything was his rules. Him and his fiancee at the time, now wife, were there, so I basically had to tiptoe around. But I didn't care about my job, and so I was posting even more than normal. I had always been posting a lot on the internet. I had always been trading stocks a lot. I made a lot of money shorting COVID and going long COVID and all this stuff. Semiconductor shortages happened around then, too. Anyways, I was very much obsessed with posting and things like that.
Dylan Patel: Eventually, around that time, someone I got into an argument with on the internet doxed me. They publicly revealed my identity from my anonymous account. At the time, I was scared, and I stopped posting for three weeks. I was like, "What am I doing? Why do I care?" So, then I just started posting. I had blogs and stuff as well, but I made a real blog, SemiAnalysis, and on my 24th birthday, I posted two blogs. From there, it got so much traction because now, instead of posting under an anonymous name, it was a real name, and I put a lot more effort into those two posts than I usually did. Instead of just posting on the internet, it was real effort into the blog. You can actually go back and read those if you want. They are not that great, but they were good for the time. They were the best stuff you could find on the internet about semiconductors, and I just kept posting, posting, posting. I started getting a lot of consulting business.
Homeless Research Road Trip
Dylan Patel: In 2020, I was again crashing out and didn't know what I wanted to do, so I packed everything up. I took my truck, bought a tent that fits on the back of the truck, bought an air mattress, and drove around all these national parks all around America. Two, three, or four days of the week, I'd stay in a random motel where I negotiated the price to be like $30 a night for a room, and I would work on some of this stuff. On the weekends, I'd read books, and offtimes read textbooks while in some random national park or hiking, and listen to audiobooks about semiconductors, about AI, about all the things that I cared a lot about. I got way more educated over those six months where I was just going to every national park. The whole time, I was alone, and the whole time I was posting blogs. Everyone was like, "Dylan, what are you doing?"
Shaun Maguire: Was this pre-Starlink or the very early days of Starlink?
Dylan Patel: Pre-Starlink. Yeah, so it was very much like, "What are you doing?" I traveled around Latin America again for a year, initially with my friend and then with my ex, and then in 2022, 2023, and 2024, I was still completely homeless since mid-2020. But I was traveling around to every conference in the world. I went to 40 plus conferences a year, no matter where in the supply chain it was. I was like, "Oh, that looks interesting, I guess I'll go to that." I went to one conference like, "Wow, this is amazing." You get to talk to the experts, and they are going to talk to you because, in the case of semiconductors, everyone is a boomer, so it's great. They don't see young people who are excited about it, so they are really happy to tell you stuff. You just have to ask.
Shaun Maguire: On this, was there like a part of the supply chain or one of these conferences that particularly changed your view of the semiconductor world or that you felt then, or feel now, is particularly underrated?
Dylan Patel: I think the trade shows and conferences range really widely. Obviously, some of the ones I have the most fun at include NeurIPS.
Shaun Maguire: Why is that?
Dylan Patel: Because it's 20,000 AI researchers, and they are generally in my age range, so it is a lot of fun, and they are leading AI researchers. You learn a lot. There are also a lot of parties. Then it ranges all the way to a random chemical conference in Japan where it is 300 Japanese dudes. There are 20 guys from ASML, 20 guys from TSMC, 20 guys from Intel, and those are the only people who speak English. Everyone else speaks only Japanese, and you are like, "Uh, I guess they're still pretty interesting and fun."
Dylan Patel: I think one skill set I have is that I'm able to bond with anyone regardless of their background and who they are. I'm able to talk to them, find something interesting to talk about, offtimes it's the tech stuff. I think the most interesting conferences are offtimes the really big ones because that's where the biggest stuff is happening. But the niches that are really exciting are like SPIE. There is IEEE, which is international electrical engineering, and there is SPIE, which is another ecosystem. SPIE conferences are super deep in details. Every single one that I went to, especially SPIE Advanced Lithography or SPIE Photomask, the first time I went, I didn't even understand 90% of what I heard. Then I read and read and read, and next time I went, I understood like half of what I heard. The third time I went, I understood like 75%. Even now, I go and I still don't understand everything that's going on.
Dylan Patel: Whereas you go to NeurIPS, and after a couple of times, you can understand: okay, what is neurosymbolic reasoning? What is this? What is that? You can get a mapping of what everything is pretty quickly. But some parts of the supply chain are so arcane, deep, and technical, it takes a lot of time for you to even understand what is happening. For every research paper, you go to a conference for a few reasons. You understand the research, but what you really care about is understanding how does that research intersect with technology and how does that research differ from what is there today? None of these research papers tell you what is happening today, but then you just ask people, you build contacts, you learn about the supply chain, and you find out that this company supplies this company even though it is not publicly stated anywhere. Or you learn that this chemical costs about this much, and a tool uses about this much. You hear the horror stories of how this chemical had a shortage and it totally threw off this part of the supply chain, and then it turns out there are only three companies in the world that make that chemical.
Dylan Patel: My favorite one is I learned from a Japanese guy at that specific Japanese conference where almost no one spoke English. In very broken English, he told me about how his father worked in this industry in the 1980s, and the only factory in the world that built this specific chemical burned down, and that caused memory prices to double or triple. I was like, "Wow, not too different from today." Not at all crazy.
InferenceX and Performance Benchmarking
Sonya Huang: Inference is going to be the biggest market on Earth, biggest market beyond Earth. Agree or disagree?
Dylan Patel: I mean, obviously, use of tokens is going to be the biggest market, and the value that's created from tokens is going to be the biggest market. But I think tokenomics, the use of tokens, the adoption of AI, is the most important thing that's happening. And inference, whether it's open models or closed models, will be one of the biggest markets in the world, much bigger than oil, much bigger than many other parts. Inference of AI will be many percentage points of the GDP, yeah.
Sonya Huang: What you've done with InferenceX, I think, is the industry standard. Maybe say a word on why you started it, what it does, and what do people misunderstand about performance benchmarking on inference?
Dylan Patel: Yeah, so to zoom back, SemiAnalysis does a lot of stuff that's like research for institutional clients and our subscription products, but a lot of it is also like, "Hey, this would just be cool to figure out. Let's figure out how to figure it out and just post it publicly." And that gets more and more scale. We've done this with a lot of GPU benchmarking, testing, training performance, and inference performance. But ultimately, we saw that inference benchmarking was point-in-time. You test it, you take some time, you release it, and it's slow, arcane, and outdated because models change all the time. Every week there is a new model, whether it's a Chinese model or today, Mythos 5, Fable dropped, and new models are coming out all the time.
Dylan Patel: On the software layer, PyTorch, vLLM, S