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> On October 1st OpenAI signed two simultaneous deals with Samsung and SK Hynix for 40% of the worlds DRAM supply. The market doesn't believe they can pay for the Oracle cloud deal. Why do these vendors believe OpenAI can pay for 40% of the world's DRAM?
An American company, combined with American tariffs, and fear of American retaliation. Getting pretty tired of that place tbh.
Earlier quoted context omitted.
Market manipulation is a crime under the Securities Exchange Act of 1934. You can't buy things to influence the price or the market, only to use or resell. https://en.wikipedia.org/wiki/Market_manipulation
Do you think OpenAI plans to trade the semiconductor market? This would only apply in that scenario.
It even seems to skirt around notions of illegal vertical integration. For example in this address from 1998, a former FTC commissioner describes several types of illegal "vertical alliances", all of which rely on both the upstream supplier and the downstream consumer being aligned in anticompetitive intent, which (if the article is to be believed) they couldn't have been here because there are two suppliers who were unaware of each other's deals.
Is it really not illegal to just buy up a huge chunk of a critical input for an industry and stockpile it for the purpose of locking out competitors? Seems hard to imagine that some robber baron of the 19th century didn't already do this.
If OpenAI were actually using the RAM that’s one thing - but stockpiling raw wafers in warehouses is egregious.
Guys, these are silicon wafers not bars of steel. You can't just stockpile 40% of annual capacity in a warehouse long-term. I would be incredibly surprised to find that any such large scale storage facility exists. Any storage of undiced wafers is temporary while the manufacturing pipeline proceeds. You've seen the pictures of clean rooms and stuff. There's no way you spend all that effort to make the wafer and then…
It would require half of one distribution center of a major retailer.
> Lenovo has begun notifying clients of coming price hikes, with adjustments set to take effect in early 2026.. Dell is expected to raise prices by at least 15-20%, with the increase potentially taking effect as soon as mid-December.. Dell COO Jeff Clarke warned that he’s “never seen memory-chip costs rise this fast,” .. Lenovo [cited] two key factors: an intensifying memory shortage and the rapid integration of AI technologies.. TrendForce has downgraded its 2026 notebook shipment forecast from an initial 1.7% YoY growth to a 2.4% YoY decline.
Matt Levine, https://www.bloomberg.com/opinion/newsletters/2025-12-01/ope... | https://archive.is/S3MPq
> your business model might end up being sort of a … startup incubator or private equity firm; you’d spend your time starting or acquiring companies on which the robot could work its magic. Your business model would be “general business, but with AI.” .. OpenAI has a $500 billion valuation largely as a bet that a lot of the value of AI will accrue to its builders, but it could hedge that bet by owning the users too. Either it will sell AI at high margins to lots of businesses, or it will sell AI at lower margins to lucrative businesses that it owns.
> Budget brands normally buy older DRAM fabrication equipment from mega-producers like Samsung when Samsung upgrades their DRAM lines to the latest and greatest equipment. This allows the DRAM market to expand more than it would otherwise because it makes any upgrading of the fanciest production lines to still be additive change to the market. However, Korean memory firms have been terrified that reselling old equipm…
I'm not sure any realistic definition of free market would mean your actions are free from consequence. The global market is anarchy in the literal sense and no one is bound by a higher authority. Coercion and cartels are part of a free market. Economic efficiency actually requires a lot of rules and regulations to achieve the free market playground we like to imagine.
> On October 1st OpenAI signed two simultaneous deals with Samsung and SK Hynix for 40% of the worlds DRAM supply. The market doesn't believe they can pay for the Oracle cloud deal. Why do these vendors believe OpenAI can pay for 40% of the world's DRAM?
They definitely can, as anybody could, for a short enough period of time. The only ones betting they'll be able to sustain it for a long period are the ones paying the currently very inflated price for ram.
but it's not a short term deal. funny enough, there's a cohort of bonds that never even made one payment. They are called first payment default bonds. There is a cheekier nickname for them, but it escapes me at the moment.
> Budget brands normally buy older DRAM fabrication equipment from mega-producers like Samsung when Samsung upgrades their DRAM lines to the latest and greatest equipment. This allows the DRAM market to expand more than it would otherwise because it makes any upgrading of the fanciest production lines to still be additive change to the market. However, Korean memory firms have been terrified that reselling old equipm…
I don't think you can have a "free and global market" when countries participate in large-scale state industrial policy. Given those constraints, you have to either enforce a zero-subsidy environment (the US has no power to do this) or you have to accept that trade control is one arm of your foreign policy goals and surrendering it entirely is unlikely to help your aims. For the most part, free and open trade is bene…
All industrialized countries participate in large-scale state industrial policy. It's a pre-condition of industrialization. A nation cannot industrialize without large scale state policy. And once industrialized, all nations maintain large-scale state industrial policy. Are you saying there never has or can be a "free and global" market? Or just when china does it?
> You may think of it analogously to Free Speech.
It's nothing like free speech as free speech is a constitutional right granted within a nation.
> The reality is that if you allow convincing enough liars, your society starts to falter.
That's rich coming from someone peddling zeihan. I've always wondered what kind of morons actually believe his nonsense. Now I know.
> On October 1st OpenAI signed two simultaneous deals with Samsung and SK Hynix for 40% of the worlds DRAM supply. The market doesn't believe they can pay for the Oracle cloud deal. Why do these vendors believe OpenAI can pay for 40% of the world's DRAM?
Ironically this deal has increased DRAM prices so much that if OpenAI doesn't pay, Samsung/Hynix can make more money selling on the open market.
Earlier quoted context omitted.
The law you refer to applies only to markets for securities. RAM is very clearly not a security, it fails the Howey test. There are similar laws prohibiting the manipulation of commodity markets but I do not believe a US court would find RAM to be a commodity.
How is RAM not a commodity?
There's also the question of if OpenAI operated In good Faith (from a search: "Another sign of bad faith is withholding crucial information..."), and- of course- the South Korean government can step in as well. In fact- as a worldwide issue- any sufficiently large State(or group of States) can take issue with it.
OpenAI will have issues if they find themselves unable to buy power equipment (Schnider, Eaton). Or, perhaps anybody associated with OpenAI management or funding is arrested the second they step foot in Europe. This is already a nightmare of an International Incident.