I think the epic mistake was made by investors and executives who bought tales about imminent super-intelligence about to displace millions of knowledge workers from entire industries replacing them with AI datacentres.
These people are the main reason why AI companies have unlimited funding, and can afford to buy global RAM supply for years in the future despite their expenses exceed revenue by billions.
Google (which is diversified more and whose performance is less likely to track AI outcomes closely) aside, the two other members of the AI Big 3 are non-public, so, no, you really can’t.
How does buying long term put options require perfect timing? The whole point of a long term put option is that you only have to be right at some point between when you buy it and when it expires.
The same thing was said 4 years ago about NVIDIA on HN, that it's stock it's outrageously overpriced, given it's $20 bln revenue, that it should have at least 10 times more revenue to justify that stock price, which is fantasy, that there is no plausible way for such demand no matter what you think about GPT-2.
nVidia earning is way above zero by a healthy margin. This was also true 4 years ago. How much their shares should cost is debatable but still, nVidia is obviously a profitable business.
Anthropic net loss in 2025 was $42 bln, OpenAI $38.5 bln. Both are spending enormous amounts with no obvious path to profitability.
I'd come at this from a different angle: we still want this to be market system, so we need to make this priced into the market. How can we price this in?
I would try to solve this by making the market structure reflect the underlying difficulty: we have to decide what capacity to produce years in advance, to construct the memory fabs. So this should be a futures market, and a capacity crunch would affect short-term-futures, but leave full term futures at the same price. Because the companies supplying the memory can just construct more capacity to fill those futures at the same cost regardless of the AI demand.
ah yes, adding a futures market to a sector heavily invested in AI certainly won't lead to catastrophic over-speculation that will collapse the industry entire
> How should the memory companies have acted differently?
Same way nVidia did through the crypto insanity - make sure they're supplying enough to the consumer market so it doesn't get completely destroyed and pulls down the other parts of the consumer market they're reliant for long term success.
> Should we blame this on memory companies or the AI companies bidding for memory?
Blame doesn't change the outcomes, neither does it improve the negative consequences. Think in terms of "what does destruction of our consumer market mean for my prosperity?" not "oh, how do defend poor companies again?"
For one, they could have could have not massively scaled back consumer memory manufacturing as a matter of duty to customers. But money and greed must prevail.
Isn't it the case that public companies owe a primary legal/fiduciary duty to shareholders over customers?
The question of choice between a profitable vs unprofitable venture is easy. But yeah, to what extent is choosing profitable instead of VERY profitable a breach of duty to shareholders?
As far as I am aware, the answer to your question is ‘no’[0].
> Contrary to what many believe, U.S. corporate law does not impose any enforceable legal duty on corporate directors or executives of public corporations to maximize profits or share price. The economic case for shareholder-value maximization similarly rests on incorrect factual claims about the structure of corporations, including the mistaken claims that shareholders “own” corporations, that they have the only residual claim on the firm’s profits, and that they are principals who hire and control directors to act as their agents.
>Isn't it the case that public companies owe a primary legal/fiduciary duty to shareholders
The shareholders own the company. It is their property. They paid for it, they own it, and likewise they can do whatever they want with it.
It would be crazy if I proposed you let me drive your car to work everyday. Why? Because you own your car, it's your property, and it works for your own interest. Basically every human agrees with this logic, but somehow "the company is just focused on pleasing shareholders" escapes this.
Raid your own assets, cut costs manically so you can have a few splendid quarters with stock buyback bonanza or focus on long term value creation, which a lot of times involves giving at least a passing tought to other stakeholders such as client and employees?
The getting was great for some time for HP shareholders under Fiorina, or GE shareholders under Welch. Lots of them left the sinking ships at the right moment, but I bet that lot of the others left holding the bag, would have preferred having bought AAPL.
People have the option of just not buying stuff. I sold my Tesla in 2021 for a stupid price, drove a beater for two years, and bought another new car a couple years later. Now, certainly not everyone has that luxury, but this is computers, not real estate. Prices will crash.
Unless you know, your main and only PC/notebook just died and need a replacement ASAP, they you don't really have an option to not buy. And no, the used market (where I live) is just as fucked, reflecting the retail gouging, with people wanting quite a lot of cash for tower PCs and notebooks from the Pentium 4 - Core 2 Duo era.
> Prices will crash.
Does your crystal ball also say when exactly? If my laptop broke, then I need a replacement now in the overpriced market, not in X years when prices will crash.
If there were such a crystal ball, the same market doing the gouging would be pricing it in already ;) does suck that "wait and see" is the optimal answer to the average consumer but I guess that's the capitalist hellscape we have wrought
I hope so. I feel so, so, so terribly guilty for not building my wife a computer for her in 2023. She is rocking a 1080ti, and I really wish I had at least upgraded her system, but now I just straight cannot afford to even consider it, given the price of rent, food, gas, energy, all on top of the actual hardware prices.
And I am a SWE.I am not making bad money. I can't imagine what others are going through.
I was so lucky to buy a high-end miniPC to replace my home PC for about $1,500 USD in 2025. The same model now sells for more than $8,000 USD, without disk or RAM. Triple that if you match my original disk and RAM buy. Everything got incredibly expensive, not only storage and RAM.
Way to miss the whole point of the article and fail to understand the point. Do you think if significant part of US industry goes bankrupt because they can't source parts for their products, work machines and consumers disappear... you'll still have luxury of running around in a Tesla?
This comes at a perfect time. The public doesn't need computers, they can just use their phones.
If the consumer had access to this RAM, they might all just run local or semi-local AI. It's important to outbid them so you can rent AI to them, and extract money from them in a million other ways while they use it.
Make RAM half the price it was before and you'd still have very few people trying to do local AI on it because it's just so damn slow for the task. Having 12 channels of DDR5 in an Epyc system with NVMe storage is still one of the slowest ways I can run LLMs locally.
Yes, but zoom out more. Wealth inequality and the k-shaped economy are the real culprit.
When a few people have so much wealth that they are no longer price-sensitive, they bid up the price of everything and anything of value be it stocks, real estate, computer hardware, fine arts, sports teams, etc.
The result is that a business which tries to make quality products at reasonable prices will fail. They aren’t luxurious enough for the people with money. They aren’t cheap enough for the people without. Customers in the middle hardly exist. Any valuable good that is genuinely scarce will inevitably become a luxury.
> We are all Capitalists, until the Market comes after the stuff we love.
Anyone with half a brain isn't a "Capitalist" (with a big C, like in your example) which is why every single prosperous nation (including USA) regulates markets to avoid destruction of their prosperity and society.
Colloquial "capitalism" today is just cronyism that in no way resembles the capitalism that Adam Smith wrote about. We really should move towards Rhine Capitalism, the only system that has stood the test of time and truly benefits everyone.
2/ where is your capital and your means of production? Your machines? Your factories? Your raw materials, your tools? How long do you survive tomorrow when you quit your job and you have no other income?
You're not a capitalist. You're just a consumer for them to suck dry. The faster you learn it, the better off you will be.
You are right. People are misusing "capitalist" to mean someone who favours a capitalist system, where as it actually means someone who posses capital; someone whose relies on possession of assets rather than earned income.
Should we blame this on memory companies or the AI companies bidding for memory? How should the memory companies have acted differently?
I think the epic mistake was made by investors and executives who bought tales about imminent super-intelligence about to displace millions of knowledge workers from entire industries replacing them with AI datacentres.
These people are the main reason why AI companies have unlimited funding, and can afford to buy global RAM supply for years in the future despite their expenses exceed revenue by billions.
You can short them and make a lot of money (to buy RAM with?) if you feel this way and are correct.
Not having the money to buy a new computer often means not having the money to put where ones mouth is.
Can't afford thing? Gamble on stock market instead.
Ridiculous argument that already rich people make.
Google (which is diversified more and whose performance is less likely to track AI outcomes closely) aside, the two other members of the AI Big 3 are non-public, so, no, you really can’t.
No?
Shorting doesn’t only require you to be right. It requires perfectly timing when the market will realize you’re right.
You can buy long term put options.
That still requires perfect timing. Getting the timing right on a long-term contract is even harder than with a short-term contract!
How does buying long term put options require perfect timing? The whole point of a long term put option is that you only have to be right at some point between when you buy it and when it expires.
Can I? Neither OpenAI nor Anthropic are publicly traded.
With non-public companies?
The main tool to fix this is to forbid companies to sell below cost price. It is part of antitrust law.
The same thing was said 4 years ago about NVIDIA on HN, that it's stock it's outrageously overpriced, given it's $20 bln revenue, that it should have at least 10 times more revenue to justify that stock price, which is fantasy, that there is no plausible way for such demand no matter what you think about GPT-2.
nVidia earning is way above zero by a healthy margin. This was also true 4 years ago. How much their shares should cost is debatable but still, nVidia is obviously a profitable business.
Anthropic net loss in 2025 was $42 bln, OpenAI $38.5 bln. Both are spending enormous amounts with no obvious path to profitability.
The market can remain irrational far longer than you can stay solvent.
I'd come at this from a different angle: we still want this to be market system, so we need to make this priced into the market. How can we price this in?
I would try to solve this by making the market structure reflect the underlying difficulty: we have to decide what capacity to produce years in advance, to construct the memory fabs. So this should be a futures market, and a capacity crunch would affect short-term-futures, but leave full term futures at the same price. Because the companies supplying the memory can just construct more capacity to fill those futures at the same cost regardless of the AI demand.
Well, the best way to solve this problem keeping it a market system is if consumers band together and create a fab that will supply them.
Since almost everybody is a consumer of those companies, I do suggest we reuse the governance system we have that solves other "everybody problems".
ah yes, adding a futures market to a sector heavily invested in AI certainly won't lead to catastrophic over-speculation that will collapse the industry entire
> How should the memory companies have acted differently?
Same way nVidia did through the crypto insanity - make sure they're supplying enough to the consumer market so it doesn't get completely destroyed and pulls down the other parts of the consumer market they're reliant for long term success.
> Should we blame this on memory companies or the AI companies bidding for memory?
Blame doesn't change the outcomes, neither does it improve the negative consequences. Think in terms of "what does destruction of our consumer market mean for my prosperity?" not "oh, how do defend poor companies again?"
For one, they could have could have not massively scaled back consumer memory manufacturing as a matter of duty to customers. But money and greed must prevail.
Isn't it the case that public companies owe a primary legal/fiduciary duty to shareholders over customers?
The question of choice between a profitable vs unprofitable venture is easy. But yeah, to what extent is choosing profitable instead of VERY profitable a breach of duty to shareholders?
As far as I am aware, the answer to your question is ‘no’[0].
> Contrary to what many believe, U.S. corporate law does not impose any enforceable legal duty on corporate directors or executives of public corporations to maximize profits or share price. The economic case for shareholder-value maximization similarly rests on incorrect factual claims about the structure of corporations, including the mistaken claims that shareholders “own” corporations, that they have the only residual claim on the firm’s profits, and that they are principals who hire and control directors to act as their agents.
[0] https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...
>Isn't it the case that public companies owe a primary legal/fiduciary duty to shareholders
The shareholders own the company. It is their property. They paid for it, they own it, and likewise they can do whatever they want with it.
It would be crazy if I proposed you let me drive your car to work everyday. Why? Because you own your car, it's your property, and it works for your own interest. Basically every human agrees with this logic, but somehow "the company is just focused on pleasing shareholders" escapes this.
And what does that mean?
Raid your own assets, cut costs manically so you can have a few splendid quarters with stock buyback bonanza or focus on long term value creation, which a lot of times involves giving at least a passing tought to other stakeholders such as client and employees?
The getting was great for some time for HP shareholders under Fiorina, or GE shareholders under Welch. Lots of them left the sinking ships at the right moment, but I bet that lot of the others left holding the bag, would have preferred having bought AAPL.
No, and I don't know who keeps teaching you that nonsense.
fiduciary duty doesn't mean you always have to do what makes the maximum profit
avoiding the destruction of good faith with consumers is a legitimate business interest
Good faith with customers also has a monetary value, even if it is hard to calculate. This is still maximizing profits.
both of them
memory companies could have attempted to protect consumers, at least a little, but the AI money machine goes brrrr
> How should the memory companies have acted differently?
Well if your thesis is that they should have acted differently, then we should blame the laissez-faire capitalists.
People have the option of just not buying stuff. I sold my Tesla in 2021 for a stupid price, drove a beater for two years, and bought another new car a couple years later. Now, certainly not everyone has that luxury, but this is computers, not real estate. Prices will crash.
>People have the option of just not buying stuff.
Unless you know, your main and only PC/notebook just died and need a replacement ASAP, they you don't really have an option to not buy. And no, the used market (where I live) is just as fucked, reflecting the retail gouging, with people wanting quite a lot of cash for tower PCs and notebooks from the Pentium 4 - Core 2 Duo era.
> Prices will crash.
Does your crystal ball also say when exactly? If my laptop broke, then I need a replacement now in the overpriced market, not in X years when prices will crash.
If there were such a crystal ball, the same market doing the gouging would be pricing it in already ;) does suck that "wait and see" is the optimal answer to the average consumer but I guess that's the capitalist hellscape we have wrought
If this goes on long enough the prices crashing won't matter because the manufacturers of all the other PC hardware will be gone.
I think we're seeing the end of the PC as we know it, personally.
I hope so. I feel so, so, so terribly guilty for not building my wife a computer for her in 2023. She is rocking a 1080ti, and I really wish I had at least upgraded her system, but now I just straight cannot afford to even consider it, given the price of rent, food, gas, energy, all on top of the actual hardware prices.
And I am a SWE.I am not making bad money. I can't imagine what others are going through.
I was so lucky to buy a high-end miniPC to replace my home PC for about $1,500 USD in 2025. The same model now sells for more than $8,000 USD, without disk or RAM. Triple that if you match my original disk and RAM buy. Everything got incredibly expensive, not only storage and RAM.
Way to miss the whole point of the article and fail to understand the point. Do you think if significant part of US industry goes bankrupt because they can't source parts for their products, work machines and consumers disappear... you'll still have luxury of running around in a Tesla?
Could this be the opening China needs to get their foot in the door? This feels short sighted.
yeah CMXT is likely to come online in the not too distant future
just stop buying. you people buy way too much crap anyway
This comes at a perfect time. The public doesn't need computers, they can just use their phones.
If the consumer had access to this RAM, they might all just run local or semi-local AI. It's important to outbid them so you can rent AI to them, and extract money from them in a million other ways while they use it.
Make RAM half the price it was before and you'd still have very few people trying to do local AI on it because it's just so damn slow for the task. Having 12 channels of DDR5 in an Epyc system with NVMe storage is still one of the slowest ways I can run LLMs locally.
VRAM is the biggest speed factor. Bonus if your system has Unified Memory Architecture instead of dedicated/shared VRAM.
Did you dodge the phone price increase somehow? Phones also need RAM (and ambitions of running local models)
Yes, but zoom out more. Wealth inequality and the k-shaped economy are the real culprit.
When a few people have so much wealth that they are no longer price-sensitive, they bid up the price of everything and anything of value be it stocks, real estate, computer hardware, fine arts, sports teams, etc.
The result is that a business which tries to make quality products at reasonable prices will fail. They aren’t luxurious enough for the people with money. They aren’t cheap enough for the people without. Customers in the middle hardly exist. Any valuable good that is genuinely scarce will inevitably become a luxury.
> The DRAM and NAND flash manufacturers at fault for the ongoing RAM, SSD, and GPU price increases
Yes, it's the manufacturers fault, not the unbelievable market demand.
We are all Capitalists, until the Market comes after the stuff we love.
> We are all Capitalists, until the Market comes after the stuff we love.
Anyone with half a brain isn't a "Capitalist" (with a big C, like in your example) which is why every single prosperous nation (including USA) regulates markets to avoid destruction of their prosperity and society.
Colloquial "capitalism" today is just cronyism that in no way resembles the capitalism that Adam Smith wrote about. We really should move towards Rhine Capitalism, the only system that has stood the test of time and truly benefits everyone.
Adam Smith wrote about the invisible hand and let the free market run. What ended up happening?
>We are all Capitalists
1/ speak for yourself
2/ where is your capital and your means of production? Your machines? Your factories? Your raw materials, your tools? How long do you survive tomorrow when you quit your job and you have no other income?
You're not a capitalist. You're just a consumer for them to suck dry. The faster you learn it, the better off you will be.
You are right. People are misusing "capitalist" to mean someone who favours a capitalist system, where as it actually means someone who posses capital; someone whose relies on possession of assets rather than earned income.
Same for small business or any small buyer.
In the past people just starved to death when someone needed all the resources for their thing. Sounds like improvement.
> Memory companies
Someone misspelled "Altman", https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram...
Someone misspelled let's tax ai companies until we get back to balance.