alt Hacker NewsOk so Samsung, SK Hynix and Micron do not have the capacity to meet demand. Also, what little capacity they do have they are allocating to HBM over DRAM. Based on my limited knowledge HBM can not be easily repurposed for consumer electronics. Translation: main street is cooked for the next 3-4 years.
It doesn't stop there though. OpenAI is currently mired in a capital crunch. Their last round just about sucked all the dry powder out of the private markets. Folks are now starting to ask difficult questions about their burn rate and revenue. It is increasingly looking like they might not commit to the purchase order they made which kick-started this whole panic over RAM.
Soo ... how sure are we that the memory makers themselves are not going to be the ones holding the bag?
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The Radeon VII came out in 2019 as a $700 consumer GPU with an 1TB/s HBM2 memory subsystem which is more than any consumer GPU you can get today, including the high-end ones afaik. At that point in time, there was a whole lineup of AMD GPUs with HBM going down into the midrange.
If they could make this stuff and sell it to regular people a decade ago for very palatable prices, why do they come up with the idea that this is the technology of the gods, unaffordable by mere mortals?
To add a more local hurdle as well, the Dutch power grid is at capacity and its managing company is now telling companies that planned to build a datacenter that they can't be connected to the grid until 2030, even though said companies already paid for and got guarantees about that connection.
That is, memory capacity is reserved for datacenters yet to be built, but this will do weird things if said datacenter construction is postponed or cancelled altogether.
> Soo ... how sure are we that the memory makers themselves are not going to be the ones holding the bag?
The memory makers specifically did not scale up capacity to avoid being left holding the bag.
I am betting the pendulum swings faster to the other side to excess capacity as all the construction lies of Altman fall through with financiers waking up the the fact they can't build the infrasctructure as fast nor make any profits on that infrastructure that will get built.
I think I’m missing something. Financially, what bag would the memory makers be holding here? I don’t think I’m well informed regarding how these deals were structured.
But wouldn’t you rather hbm prices come down first ? Memory makers will be fine. There is practically infinite demand. Unless you get china style rationing of compute per person world wide.
The real issue is everyone wanting to upgrade to hbm, ddr5, and nvme5 at the same time.
What kind of consumer electronics can you build with HBM? That's the startup you should be founding...
There's actually plenty of demand for LPDDR even in the AI datacenter, because HBM is quite wasteful of area for any given memory capacity.
> Folks are now starting to ask difficult questions about their burn rate and revenue.
this view isn't updated correctly post-claude code and codex. there will clearly be sufficient demand.
The market is already stagnated. Even if OpenAI doesn’t buy what they reserved other players will do so. SK Hynix CEO said there is a 20% gap between supply and demand per year. And that doesn’t account the shock effect that will take place the moment prices normalize and everyone and their dog will go out and start buying inventory to avoid the next crisis. I for one would certainly buy more than I currently need just in case.
> Soo ... how sure are we that the memory makers themselves are not going to be the ones holding the bag?
I hope they do, they did not have to agree to sell so much RAM to one customer. They’ve been caught colluding and price fixing more than once, I hope they take it in the shorts and new competitors arise or they go bankrupt and new management takes over the existing plants.
Don’t put all your eggs in the one basket is how the old saying goes.
> Soo ... how sure are we that the memory makers themselves are not going to be the ones holding the bag?
We aren't. The remaining memory manufacturers fear getting caught in a "pork cycle" yet again - that is why there's only the three large ones left anyway.
Memory makers did get themselves into this situation by selling all wafers for empty promises and alienating everyone but OpenAI tbh. I do hope they end up holding the bag once again, cause after covid and the cartel thing they don't seem to ever learn their lesson on how to have the tiniest amount of integrity.
Good point. I think both AI companies and hardware makers should pay for the damage they caused to us here.
They act as a de-facto monopoly and milk us. Why is this allowed?
This will result in demand destruction which will starve the enterprise which will starve the hyperscaler. theres no situation where people not being able to afford hardware for 4 years results in the bubble not popping
The people who fucked over consumers are left holding the back that they sold us out over?
Oh no!
I would expect that OpenAI gets as much money as they ask for for the next 10 years.
There’s virtually infinite capital: if needed, more can be reallocated from the federal government (funded with debt), from public companies (funded with people’s retirement funds), from people’s pockets via wealth redistribution upwards, from offshore investment.
They will be allowed to strangle any part of the supply chain they want.
Don’t the memory makers always get left holding the bag? I feel this has happened at least three times before.