Lots of small companies won’t survive the components price hike and shortage
They also used copyrighted material without the consent of the authors to train their models.
They polluted the air and stole clean water from communities who lived close to their data centers.
Hoarding RAM is only the tip of the iceberg.
And apparently no consequences for any of it. Even when the bubble bursts it will be the common folk that will bear the bulk of the pain.
It’s just how free market works again free market, leading to capital concentration, basic and unavoidable capitalist contradiction.
Nothing free about us markets lol
Lack of regulations resulting in a rampant speculation like the above is by definition one of the core tenets of free market. That free market just don’t work for people like me or you.
People think “free” means “I can do whatever I want,” but really it usually means “people with more power than me can do whatever they want to me.”
It’s both, it’s a nice illustration of how free is a free market. You could for example speculate on RAM trade or anything else, but the dude with billions of dollars can literally control entire trade.
No, there’s plenty of regulation, it’s corrupt regulation but that’s not free market.
In this case it’s precisely lack of regulation. There’s no law forbidding doing this. Now imagine how shit it was with essentials (Irish famine for example).
Go ahead and start your own memory fab then, there’s no regulation stopping you apparently.
You seriously can’t make a difference between lack of regulation and lack of capital? What do you even think free market is?
No you’re right you just need the cash.
Capitalism baby
Making it illegal would be a regulation and you can’t have those unless they’re regulating sex or gender.
That RAM isn’t a dangerous weapon like a uterus
It is not ‘LLM companies’. It is OpenAI. And not from buying memory either. Last year they made two deals with two major memory manufacturers, which together meant they were purchasing a significant percentage of the world’s memory production. And they negotiated these two deals in secret, each company not knowing that the other was in discussions, and announced the two deals on the same day. They weren’t even buying memory chips you can put in a server, but finished wafers with memory chips printed on them. These wafers then have to be cut up into chips, those chips have to be put in packages, themselves tested, and then soldered down to memory modules. As far as I know, OpenAI has no ability to do this. So it seems likely they purchased a significant portion of the world’s memory production just to drive up prices and keep their competitors from having it.
There is no law regulating who someone can sell something, assuming it’s not regulated goods aka drugs, guns.
AI companies just outbid everyone else by a big enough margin and there are less than a handful of companies producing RAM as it’s rather complicated and specific production process.
New producers cant easily enter the market due to the complexity and completely insane initial investment cost in setting up the production and they would have to design their own RAM chips as well, which would take years if not decades.
Current chip producers don’t want to increase production either due to liking high price and being afraid of the bubble popping.
Even if there is some legal grounds for government stepping in and regulating supply to avoid collapse of smaller companies who can’t outbid AI companies. They are dining and getting funded by the same AI companies.
ITT: answers explaining why they’re doing it rather than the actual question of how it’s legal.
I guess the short answer is, when you’re rich and powerful, who’s going to stop you? We don’t have a functioning government and haven’t since the 70s at the latest; it’s been captured and only serves wealth and Wall StreetStreet now.
Money.
The answer to any “Why is company X fucking everyone?” is always because it makes some asshole somewhere an obscene amount of profit.
Because in the us if you bribe the president anything is legal. Here, legal just means you bribed the president. If you didn’t bribe him it’s not legal.
No one is hoarding RAM (or DRAM aka what we call as RAM)
Instead it has mostly been a supply side crunch, and none of the individual steps are “illegal”
- AI servers use a special memory called HBM
- HBM is good at what it does but it has a very ‘high wafer area per server’ (it is stacked, and each level is lower density than normal DRAM)
- OpenAI (and apparently others) skipped middlemen of supply chain and directly negotiated with the fab to get priority for their HBM fabrication.
- This crunched supply on the open market for HBM
- Other people followed up
- Fab companies pivoted other manufacturing lines to HBM because of so many orders (and because it is really profitable to manufacture)
- That caused crunch on DRAM
- Other memory manufacturers pivoted to more expensive segment of their expertise (eg Flash memory fab)
- This caused crunch on other common memory segments
- Expensive memory means you try to move to higher segment for your own products (eg: laptop, mobile) else you don’t have any slack in your BOM. This is causing the consumer good crunch
- Once stuff becomes expensive, people hedge and buyout inventories. This is causing the Covid era style supply chain shock. The impact radius is expected to increase in coming months even if RAM situation resolves.
- “Special mission” against Iran is blocking critical supply chain for chips (speciality chemicals, helium, etc.)
Anything is legal if you have enough money.
It’s legal because capitalists have captured the levers of power nearly everywhere.
They never bought the RAM, they put out a letter of intent to buy up to 40% of the global supply. Because business leaders are equal parts malicious and stupid, this lead to a run on RAM before prices spiked due to low supply, causing a price spike due to low supply.
A letter of intent is not a contact and is not binding. It’s the equivalent of a New Year’s Resolution blog post.
The fabs themselves work on multi-year contracts where the buyer commits to purchasing a certain capacity of the total production. If they expect to produce 100 million sticks in a year and someone offers to buy 40 million of them, it’s still in their interest to have many buyers in case that customer can’t follow through or backs out.
That’s a dang odd thing for a US market segment to initiate on a global scale shortly before the country kicks off war on a new front or two…
A lot of it probably isn’t legal, but who’s gonna prosecute them?
I like asking the “How do we fix the current situation without violence” and looking at everyone not having an answer any more.
There’s just a handful of heads that need to be popped to send a message that you can’t be a turboassclown with literally everyone else’s lives. Where is godzilla when you need him?
The purpose of US financial policy is to increase asset market inflation to keep foreign capital locked in petrodollar system & ensure all high-end investment requires Wall St firms & coordination of their many monopolies not just on significant credit. The RAM price hike is just another cycle of fake sales for these companies looped around Nvidia ASML TSMC it doesn’t even really accompany a true shortage
