Lots of small companies won’t survive the components price hike and shortage
Venture Capital.
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
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.)
Money. Lots of money.
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.
Capitalism > Law
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’s legal because capitalists have captured the levers of power nearly everywhere.
Capitalism baby
Anything is legal if you have enough money.
It’s only one company that hoarded all the RAM: OpenAI. They’re the ones that intentionally created scarcity in the market in order to maintain what they thought was a dominant position.
Don’t lump all the other AI companies in with them. They’re they ones that claimed to be all about improving humanity and registered themselves as a non-profit, then turned around and went for-profit with shady deals left and right (like the DRAM thing).
Anthropic lost their contract with the government because they refused to use their AI to snoop on innocent people and possibly make automatic determinations as to who and what to bomb. OpenAI leapt right on that opportunity, “we’re happy to do that! Give us the contract!”
I’m not saying the other AI companies are pinnacles of ethics but there’s one player—who is so closely aligned with Microsoft they have employees sitting on each other’s campuses—that is vastly worse than the others when it comes to underhand shit that’s bad for everyone.
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.
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.
They’re too big to fail, too big to jail, too big to care.
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.
