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Sam Altman’s DRAM Deal

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Re: Sam Altman’s DRAM Deal

#231

Post by eightysixfour »

harimau777 wrote: post #113
arjie wrote: post #48

Earlier quoted context omitted.

It's not really that different from Apple reserving wafer starts on TSMC's next node and so on. It's just that this kind of capacity requirement has rarely shown up in DRAM before. Vendors prefer this kind of capacity reservation over a more variable finished product requirement. It allows them to know that they can build at the bottleneck rather than having to start up more capacity and then having that lie idle whi…

Did Apple reserve 40% of the supply and cause a massive shortage. If not, then I don't see how its the same.

Not only do they buy 40%, they bought 100% of TSMC's 3nm capacity for a year, locking everyone else out of 3nm chips.

Re: Sam Altman’s DRAM Deal

#232

Post by snackbroken »

nerdponx wrote: post #123
armaautomotive wrote: post #30

Earlier quoted context omitted.

Do you think OpenAI plans to trade the semiconductor market? This would only apply in that scenario.

It's interesting that this isn't actually illegal to do except in the specific context of an exchange market. I did a very cursory search of the US Code and the Securities Exchange Act of 1934 and yeah, unless there's some additional legal precedent or other applicable law I didn't find, then this might just be a gap in the law. It even seems to skirt around notions of illegal vertical integration. For example in thi…

Not exactly the 19th century, but in 1980 Softsoap bought up a year's worth of manufacturing capacity of hand pump mechanisms in order to block competitors from entering the consumer market for liquid hand soap.

Re: Sam Altman’s DRAM Deal

#233

Post by Libidinalecon »

hearsathought wrote: post #128
arjie wrote: post #67

Earlier quoted context omitted.

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…

> I don't think you can have a "free and global market" when countries participate in large-scale state industrial policy. 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…

Zeihan is wonderful if read as a post-modern, historical fiction novelist.

The characters and plots are obviously all exaggerations and fabrications of reality but there are many interesting themes in his novels.

Of course, reading him like he is Edward Gibbon would be pretty foolish but The End of the World is just the Beginning is a great book.

Re: Sam Altman’s DRAM Deal

#234

Post by adgjlsfhk1 »

mjevans wrote: post #187
christophilus wrote: post #153

Earlier quoted context omitted.

RAM is a very cyclical market, historically. You can look at $MU historical charts and kind of see that it trades like a cyclical (compare it to $RIO, for example). Cyclical companies are easily burned by investing in infrastructure right at the peak. It happens all the time with little mining companies, and I think DRAM manufacturers are sort of the mining companies of tech.

Cyclical markets are the sort of thing 'National Strategic Reserves' should address... Am I crazy for wanting this to be in Full ECC RAM modules suitable for composition into many device factors with hope that we'll finally go to reliable memory for all markets as a result?

The problem is that the cycle time is about the same as the generation time. By the time the current cycle completes, we'll be on DDR6/HBM4.

Re: Sam Altman’s DRAM Deal

#235

Post by nerdponx »

nerdponx wrote: post #123
armaautomotive wrote: post #30

Earlier quoted context omitted.

Do you think OpenAI plans to trade the semiconductor market? This would only apply in that scenario.

It's interesting that this isn't actually illegal to do except in the specific context of an exchange market. I did a very cursory search of the US Code and the Securities Exchange Act of 1934 and yeah, unless there's some additional legal precedent or other applicable law I didn't find, then this might just be a gap in the law. It even seems to skirt around notions of illegal vertical integration. For example in thi…

Oops I forgot the link to the FTC document https://www.ftc.gov/news-events/news/speeches/vertical-issue...

and here's a followup from the same commissioner https://www.ftc.gov/news-events/news/speeches/vertical-issue...

Re: Sam Altman’s DRAM Deal

#236

Post by nerdponx »

zozbot234 wrote: post #217
nerdponx wrote: post #123

Earlier quoted context omitted.

It's interesting that this isn't actually illegal to do except in the specific context of an exchange market. I did a very cursory search of the US Code and the Securities Exchange Act of 1934 and yeah, unless there's some additional legal precedent or other applicable law I didn't find, then this might just be a gap in the law. It even seems to skirt around notions of illegal vertical integration. For example in thi…

> Seems hard to imagine that some robber baron of the 19th century didn't already do this. They tried it and lost their shirts. When you hoard a critical input, that input doesn't just disappear. You spend huge amounts of money pushing the price up, and then the market price turns against you as people finally figure out that the hoarding was just a stunt, that you don't really have a higher-valued use for the stuff…

It's hard to tell from the news but it sounds like they've negotiated contracts for a recurring stream of DRAM rather than just trying to buy a ton of it on an open market. Wouldn't we be stuck with high prices until manufacturing capacity increases and/or the deal expires?

Re: Sam Altman’s DRAM Deal

#237

Post by nerdponx »

snackbroken wrote: post #232
nerdponx wrote: post #123

Earlier quoted context omitted.

It's interesting that this isn't actually illegal to do except in the specific context of an exchange market. I did a very cursory search of the US Code and the Securities Exchange Act of 1934 and yeah, unless there's some additional legal precedent or other applicable law I didn't find, then this might just be a gap in the law. It even seems to skirt around notions of illegal vertical integration. For example in thi…

Not exactly the 19th century, but in 1980 Softsoap bought up a year's worth of manufacturing capacity of hand pump mechanisms in order to block competitors from entering the consumer market for liquid hand soap.

I didn't know about this history. Looks like it actually worked out great for them.

Re: Sam Altman’s DRAM Deal

#238

Post by testing22321 »

am17an wrote: post #81
arjie wrote: post #19

There's nothing dirty about this deal. When making a large deal with one vendor he didn't disclose to them that he was making a deal with another vendor. That's pretty normal when you're trying to buy a lot of stuff. Otherwise, they can collude to shake you down. I'm not thrilled about this genre of "guy I don't like does totally normal thing so it's bad". It's too engagement baity. EDIT: Though even that may be wron…

It's bad for consumers period. A deal that hampers 40% of global supply shouldn't be a thing, it's predatory. I know DRAM is not a necessity, but considering that PCs are going to be affected means this affects real things like schools and hospitals. There's being smart while making a deal and there's knee-capping the market with your leveraged to the tits business

You’re just talking about putting limits on capitalism. Be careful, that’s blasphemy.

Re: Sam Altman’s DRAM Deal

#239

Post by bdbdbdb »

roadbuster wrote: post #40

> To be clear - the shock wasn’t that OpenAI made a big deal, no, it was that they made two massive deals this big, at the same time, with Samsung and SK Hynix simultaneously That's not "dirty." That's hiding your intentions from suppliers so they don't crank prices before you walk through their front door. If you want to buy a cake, never let the baker know it's for a wedding.

This wasn't buying a cake from a baker, this was a bakery buying 40% of the flour in the world so nobody else can sell wedding cakes, but now there's gonna be no bread for a year

Re: Sam Altman’s DRAM Deal

#240

Post by marcosdumay »

swatcoder wrote: post #155
marcosdumay wrote: post #137

Earlier quoted context omitted.

> has a lot of momentum behind it Does it? It's mostly the US pushing against globalism right now. Trump managed to unite almost the entire world.

Britain? Russia? China? Admittedly, Europe was being slow to reconfigure until finally forced to do so this year but they've jumped on board now too. And in typical historical fashion, everybody with less little influence/independence to project their own sphere are now cautiously but attentively jockeying to accumulate the best deals they can gather among those they do. The world is far from united, even if many do…

So... How are China and the UK working against globalism exactly?
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