Now thinking of this from the other side, 2 big DRAM producers are taking the risk to dedicate a very big part of their production to AI and if we assume they also have similar deals with other AI companies or big datacenters, what is their risk profile if the AI bubble bursts? Are they viable as companies then ? What is their plan B ?
Their risks are none. They are not increasing capacity, only selling the available one to the highest bidder. Whenever these AI companies run out of money, these producers can simply resume their regular business.
It only depends on whether they get addicted to the high prices.. as long as they can withstand a collapse in the prices then you're right they have minimal risk
Not sure about DRAM companies, but many businesses would still go under if they sold their annual production to a company that then goes bankrupt and won't pay anything for the delivered goods.
Hopefully they get paid more than once a year. Their risk is completely dependent on 1. the net X days until they are paid, and 2. How fast they delay shipment when/if a payment is delayed.
> what is their risk profile if the AI bubble bursts?
Exactly. This is why they’re not scrambling to invest in additional capacity. If these memory manufacturers went all in on new capacity it would take years to build out. If the bubble bursts, or even if it doesn’t burst and just tapers off back to normal demand, they would be in a bad position with excess manufacturing capacity that isn’t paying off.
I think the price increases we are seeing are a direct result of the skepticism about AI scale viability. The big dram houses aren’t increasing capacity, due to the risks you mention.
So demand from other sources has to be suppressed through being priced out in order to meet those supply promises made to OAI in ignorance of their true scale.
This is OAI doing suppliers dirty by making economy distorting moves without transparency, intentionally distorting the market in an effort to hurt competitors.
Yet another example of the “free market” creating destruction for the general public.
As a thought experiment, replace “dram” with “rice” or another essential food stock. Market manipulation such as this is wildly irresponsible, anti-humanity and antithetical to public good. Wars are started over less.
This is an excellent example of the actual alignment of OpenAI as an organization. Yet we are to trust them with leading the way in the alignment of our manque oracles of truth and power?
> This is OAI doing suppliers dirty by making economy distorting moves without transparency, intentionally distorting the market in an effort to hurt competitors. Yet another example of the “free market” creating destruction for the general public.
At the speed OpenAI is growing, it's far more likely they're trying to protect themselves first, not harm competitors. The market only exists because it's free / semi free. Were it controlled by statist bureaucrats - which is the sole alternative back in reality - the situation would be drastically worse. Just ask Soviet Russia. You'd get your meager once every ten year DRAM ration and you'd like it.
The general public isn't the standard of morality or good. Invoking it is meaningless.
I think we can dispense with the strawman Soviet Russia alternative lmfao.
In a reasonably well regulated market, deception at that scale (that utterly destroys competitive buildouts by externalizing the costs that normally would be borne by a customer needing an exceptional order) would be a clear violation of market laws. The fact that deceptive, aggressively anticompetitive behavior such as this , blatantly harmful to other innovation passes as “free market” is a laughable assertion… this is merely the will of the stronger, not any reasonable definition of a free market. A free market implies transparency in pricing and demand, alongside fair competition practices.
Anyone else planning to innovate in the ML space just took a huge hit thanks to OAI, including scientists, pharmaceutical companies, and other things that arguably operate mostly in the realm of clear public good.
Their inherent assumption that might = right is a very powerful indication of their inability to be trusted in the control of a tool / weapon that has more potential to steer the future of humanity than nuclear power/weapons ever did. It’s clear that A: they don’t see AI as any big deal, or B: they don’t care how their actions affect humanity in any nuanced sense of the concept.
> The big dram houses aren’t increasing capacity, due to the risks you mention.
Except they are
> SK hynix to boost DRAM production by a huge 8x in 2026, still won't be enough for RAM shortages
> It's also not just SK hynix that is boosting DRAM production capacity, with both Samsung and Micron rapidly increasing their respective DRAM production numbers.
That's such an impossibly big number for that timeline. The actual news is they're ramping up their newest node, which they were doing anyway, and which was a small percent of their total production.
lol 8x in 2026 hahahahahahaha that is one of the funniest things I’ve ever heard of coming from a semiconductor manufacturer. Maybe 8x as many of something they weren’t selling beforehand, but increasing production on full fabs by 8x? I’d love to be wrong but this makes zero sense to me.
