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| ▲ | Matl 13 hours ago | parent | next [-] | | That's why some regulation is not the enemy of the people that some want to make it out to be. Unfortunately, I think regulatory capture is so deep now in most places, one can hardly expect anyone to do anything about it. | | |
| ▲ | Aurornis 13 hours ago | parent | next [-] | | > That's why some regulation is not the enemy of the people that some want to make it out to be. The question is always: What specific regulation? Regulation is not the magic silver bullet that some want to make it out to be. You’re not going to solve a global supply and demand change by regulating companies to not buy too many things. The supply would go to other countries. Companies would open international subsidiaries that built the data centers in other countries. Companies would move to other countries which didn’t try to stop them from buying components on the free market. You can’t regulate companies into keeping prices down. This is an international market. If you passed a law that said RAM had to be sold for no more than 30% higher than last year’s price, the international memory companies would laugh and stop sending RAM to that country. > Unfortunately, I think regulatory capture is so deep now in most places, one can hardly expect anyone to do anything about it. I think you need to broaden your understanding of how the DRAM supply chain works and which countries are involved. You can’t mandate low prices for a global commodity. You can try, but the supply will just disappear for that country. | | |
| ▲ | Matl 13 hours ago | parent | next [-] | | Yes, it's better to not do anything right? After all 'the market' is working for some. No regulation would catch 100% of this, nor is it meant to. But it can definitely deal with companies opening international subsidiaries etc. Sanctions can be worked around too, but that's a hassle and so countries/companies/individuals generally try to avoid them at all costs. | | |
| ▲ | Aurornis 12 hours ago | parent | next [-] | | > But it can definitely deal with companies opening international subsidiaries etc. You’re still imagining this as a purely single-country issue. The demand for AI data centers is global. If OpenAI, Anthropic, and xAI weren’t building them, other companies would step in to provide data center services for a fee. Now you have the same buildout, just less efficient and more expensive for the end consumers because we’re paying a new middleman for the compute. The regulation maximalists would argue that we could then forbid companies from buying foreign data center capacity, but then that means other companies would appear in those other countries offering the AI inference service. What you’re missing is that this is a global supply and demand issue and you can’t solve it with domestic regulations. | | |
| ▲ | Matl 8 hours ago | parent | next [-] | | There's solutions to everything you mention and as I said, usually when sanctions are applied to countries, companies and individuals are meant to deal exactly with this. This could range from quanta mandates on the supply side (the RAM manufacturers themselves in this case) to imposing secondary sanctions on 'other companies [that] would step in to provide data center services for a fee' If the US and the EU did this, these other companies would be mega careful about to whom and how they provide services to, the same way Chinese private companies today are generally super careful about not violating US sanctions. | | |
| ▲ | Aurornis 7 hours ago | parent [-] | | > If the US and the EU did this, these other companies would be mega careful about to whom and how they provide services to, There is currently more demand than supply in the entire world. If the US and EU got together and told DRAM companies that we're going to sanction them if they don't give us cheap RAM, 10 other countries would roll out the red carpet to come bring that DRAM into their countries instead. The data centers would be built there. Then the US and EU would be compute-starved and have no choice but to go to these other countries for compute. I suggest you read up on the history of attempts to control prices of oil throughout history. Oil is an order of magnitude bigger market than DRAM. If you think it's realistic to suggest that the EU and US could sanction entire countries into keeping some chip prices down so people can save a couple hundred dollars on their next laptop, this isn't a conversation grounded in reality. | | |
| ▲ | Matl 7 hours ago | parent [-] | | > 10 other countries would roll out the red carpet to come bring that DRAM into their countries instead These 10 countries need the US/EU market for their exports. But you keep talking as if I am saying I want to sanction those who build more DRAM. No, I want more DRAM, not less! > we're going to sanction them if they don't give us cheap RAM That's not what the proposal was. The proposal was to limit the ability of AI goons to completely buy the DRAM market out so that everyone else is forced to pay substantially more. If the problem is that it feeds into general inflation then it is suddenly not merely 'so people can save a couple hundred dollars on their next laptop'. It's like oil, it feeds into everything; manufacturing, delivery of goods to your local supermarket, flights etc. etc. you can't simply say 'hey I don't drive a car so high oil prices don't affect me'. If enterprises and consumers alike are forced to spend substantially more on DRAM, they won't be able to spend on other things and the whole economy will slow down. I'd argue that's incentive enough. | | |
| ▲ | Aurornis 7 hours ago | parent [-] | | > But you keep talking as if I am saying I want to sanction those who build more DRAM. No, I want more DRAM, not less! The DRAM companies would be building more if they could. You can't sanction your way into squeezing blood from a stone. > If enterprises and consumers alike are forced to spend substantially more on DRAM, they won't be able to spend on other things and the whole economy will slow down. If a country came along and declared that companies couldn't buy the resources they need from other companies, the second order effect would be every major company relocating their headquarters out of that country as soon as possible, along with a sharp decrease in startups being formed in that country. The economic impacts of this level of command-and-control government would be devastating to the economy. Much more than having to spend a few hundred dollars more on a laptop every 5-10 years. | | |
| ▲ | Matl 7 hours ago | parent [-] | | > The DRAM companies would be building more if they could. You keep arguing as if there's only one side to this, the producers/DRAM companies who can't scale production fast enough. But there's two sides to a market, the producers (DRAM makers) and the consumers, (AI industry). I am arguing for increasing the supply by taking some away from the AI industry. This is BECAUSE on the production side there's no way to address this fast enough. | | |
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| ▲ | klibertp 10 hours ago | parent | prev | next [-] | | > but then that means other companies would appear in those other countries offering the AI inference service. That might actually be the goal. A more fragmented market would mean each participant has less money, so they would try to watch their costs a bit more closely. The innovation rate (in non-cost-cutting areas) would probably decrease, maybe even substantially... which some people happen to consistently advocate for. A lot of lost efficiency would be reclaimed in a few years, but the whole system would be more stable, cheaper, and less centralized as a side effect. Yeah, it would be suicidal to do that when it's your budget that gets the taxes from those giant corporations; who would want to willingly reduce their income for years? The rest of the world would benefit tremendously, but it could be a net plus (socially, politically, if not purely economically) in 5-7 years down the road - even in the country currently benefiting from the corporations the most. But that would be one to two lost elections too late, even if it turned true. So, while it won't happen, if it did, I don't believe we'd be worse for it. | |
| ▲ | FridgeSeal 8 hours ago | parent | prev [-] | | > The demand for AI data centers is global Not saying there isn’t demand, but it’s definitely artificially inflated by VC-fomo and circular-funding ~~fraud~~ shenanigans. > If OpenAI, Anthropic, and xAI weren’t building them One of these companies is responsible for buying up DRAM wafers, in what still appears to be an attempt to deny them to everyone else, and another one of these companies seemingly exists to launder money for a fascist billionaire. | | |
| ▲ | jrflowers 8 hours ago | parent [-] | | >another one of these companies seemingly exists to launder money for a fascist billionaire. Fascist trillionaire |
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| ▲ | ChadNauseam 7 hours ago | parent | prev | next [-] | | Yes it is far better to do nothing than to something that makes the situation worse | |
| ▲ | 15155 8 hours ago | parent | prev [-] | | > Yes, it's better to not do anything right? Ah yes, "We have to do something! Something must be better than nothing!" Famous last words before freedoms of all varieties are eroded. | | |
| ▲ | Matl 8 hours ago | parent [-] | | I applaud you for standing for Anthropic, OpenAI and xAI's freedom to price everyone else out of the market, because noone else will. | | |
| ▲ | 15155 7 hours ago | parent [-] | | Here's an exercise: try drafting the statute. Then, let's see how quickly I can reinterpret whatever power you've grabbed in the name of "doing something" and pervert it for some other nefarious purpose, or just generally bypass the intent entirely as a motivated actor with limitless funds. Many regulations, once passed, impact only those incapable of navigating around them - typically, the less-fortunate. Invariably, power taken in the name of some transient issue is never later relinquished. |
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| ▲ | burnte 12 hours ago | parent | prev | next [-] | | > > That's why some regulation is not the enemy of the people that some want to make it out to be.
> The question is always: What specific regulation?
> Regulation is not the magic silver bullet that some want to make it out to be. The fact that you ask the important question and then continue to kneejerk at the mention of "regulations" shows the REAL problem. People have problems DISCUSSING the idea. Everyone in the world knows that regulations can be stupid, but that's not the sole property of government, businesses can be colossally stupid too. | | |
| ▲ | Aurornis 12 hours ago | parent | next [-] | | > People have problems DISCUSSING the idea. My comment was discussing the idea. If you have ideas to discuss, let’s discuss those too. What I have a problem with is the demand that we accept that regulation will fix everything, but every discussion about the actual effects of regulation gets dismissed. When an idea only looks good if you can prevent people from discussing the details, it’s probably not a good idea. | |
| ▲ | 15155 6 hours ago | parent | prev [-] | | > businesses can be colossally stupid too Businesses don't generally have the ability to take freedoms, power, etc. and then never relinquish control - their stupidity (in theory) has limited impact on everyone else. |
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| ▲ | Teever 7 hours ago | parent | prev [-] | | > The question is always: What specific regulation? You're absolutely right that we can't solve this by regulating DRAM prices.
How we got to a situation where a handful of companies can spike the price of consumer electronics several times what it was only a few years ago and these same companies have become the centralized source for information is a journey decades in the making at this point. Decades of insufficient regulations, insufficient enforcement of existing regulations and the lack of any organized efforts to change it. Microsoft should have been broken up in 2001. The American government should have taken that threat seriously. Governments around the world should have. The dependence of all levels of governments on one single American company for their desktop operating systems and productivity software as well as the spying opportunities that gave American companies and intelligence entities was a grave threat and regulated better to avoid entrenched foreign monopolies. But they didn't. 25 years later and Microsoft still dominates the home OS market and office environment, they have a sizable portion of the cloud, they recently took a huge chunk of the game industry and now the AI industry with their investment in OpenAI. Even though there's a direct line between a historical lack of regulation on a monopoly like Microsoft and the rise of OpenAI leading to the spike in ram prices it isn't just about Microsoft. You can paint similar pictures about Google, Oracle, Facebook, or Amazon. But to me it isn't just about these companies and regulations/actions directed specifically them but the broader misregulations that have stifled market health and dysfunction that has allowed these criminal organizations to have so much influence. There could have been real enforcement with criminal penalties and fines that exceed the profits and costs associated with the high-tech employee antitrust litigation.[0] Not doing so has just allowed wealth to continue to accumulate in the hands of criminal people, who not surprisingly continue to do shitty things in their quest for profit. Why were there no personal consequences to Eric Schmidt[1] for these actions, let alone consequences that would have prevented him from attaining the position of influence that he currently has? The notion of the right to repair should have superseded the DMCA and laws should have been adopted to punish noteworthy companies that lobbied for it and profited from it. There should be more of a focus on governmental standards mandated open interoperability to prevent walled garden business models. This would have kneecapped wealth accumulation among a few corruption groups and allowed a richer more competitive market to flourish. DMCA and copyright extension, WIPO harmonizing of trade law should all have been swept away. Where's the fallout from Snowden? Were there any massive institutional reforms there? Any jail time for people in government and industry who were involved? How did the lack of regulations and and lasting reform around that debacle shape American society at large and the tech industry? Everything that we're experiencing today is the result of decades of choices to not regulate the tech industry in any way that resembles other industries. It is a global collective choice to cede power to private individuals based out of the west coast of the US. [0] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... |
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| ▲ | alex43578 13 hours ago | parent | prev | next [-] | | What’s the proposed regulation that would help here? Price controls? They don’t work, especially in a market like memory. | | |
| ▲ | Matl 13 hours ago | parent | next [-] | | > What’s the proposed regulation that would help here? Price controls? They don’t work. The proposed regulation would be that if a single company/industry buying up supply to the point it starts driving significant inflation for such and such goods, they would be severely restricted from doing so going forward. | | |
| ▲ | Aurornis 13 hours ago | parent | next [-] | | It’s a global phenomenon. The latency concerns for data centers are minimal, so they could be built anywhere. If your country restricted a company from buying too much of a product they need, 10 other competitor companies in other countries would be formed the very next day offering to do the work in their country for a minimal fee. This is a global market. Supply and demand isn’t going to be cancelled out by politicians in one country trying to squeeze the market. If you did restrict companies from buying things they need, you would see all future companies in that space incorporated in other countries. | | |
| ▲ | JumpCrisscross 7 hours ago | parent | next [-] | | Yeah, imagine doing that for oil. American and EU companies that “hoard” oil get punished. The net effect would be everyone else gets to buy more and prices remain exactly the same. | |
| ▲ | testing22321 13 hours ago | parent | prev [-] | | The old race to the bottom. | | |
| ▲ | Aurornis 12 hours ago | parent [-] | | It’s the old supply and demand in a global market. It’s weird to read all of the calls for regulation to fix this when the DRAM and chip production is happening in other countries. | | |
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| ▲ | m4rtink 13 hours ago | parent | prev | next [-] | | Not saying this is the solution, but strategic reserves of important commodities exist. Maybe we need the same now for computer parts, that are now so important for everything in our modern digital society ? So that feverish investor speculation and shady circular financing deals don't cause sudden 30+% inflation on any technological device. | | |
| ▲ | alex43578 12 hours ago | parent | next [-] | | Good news, you get the DDR2 that has been languishing in a salt cave for the last 20 years. Reality check: a strategic reserve of modern technology components in volumes needed to impact consumer prices is completely infeasible and illogical. I’d be fine with the idea of the government maintaining supplies of defense industrial inputs, critical minerals, etc; but as we see with our efforts for rare earths (and even petroleum) you can never stockpile consumer supply levels. | |
| ▲ | sib 7 hours ago | parent | prev [-] | | A strategic reserve of a commodity that (historically) depreciates at ~50% per year is a terrible trade for occasionally avoiding demand-driven price spikes. |
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| ▲ | win311fwg 13 hours ago | parent | prev [-] | | So, in practice, if, say, the agriculture industry buys up the supply of seeds (they already effectively do) and we see it start driving significant inflation for food (a common concern), the agriculture industry would be restricted from buying seeds? | | |
| ▲ | Matl 13 hours ago | parent [-] | | Yes, because we can't apply specific regulation for specific industries where it makes sense, we have to write them as if we were LLMs so they can be proven to 'not work'. | | |
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| ▲ | Danox 5 hours ago | parent | prev | next [-] | | The market will take care of itself. The Chinese are going use this to ramp up and build more memory, and some companies out there will take it in-house, In short, they won’t be caught with their pants down again. | |
| ▲ | mghackerlady 13 hours ago | parent | prev | next [-] | | The only thing the US could feasibly implement is forcing micron to allocate a certain amount of its production for consumer use | | |
| ▲ | alex43578 12 hours ago | parent [-] | | Why? Why is consumer use vs corporate use a higher and better priority meriting such an intrusive regulation? | | |
| ▲ | angoragoats 12 hours ago | parent [-] | | Because extreme corporate use, that is, what is happening now where a majority of supply is locked up ahead of time via B2B back-room deals, is anti-consumer. Unregulated, it is easy to see how this could lead to a perpetual "rent everything" dystopian environment for consumers. | | |
| ▲ | alex43578 12 hours ago | parent [-] | | Every use of DRAM is a corporate use, with the best consumer-friendly examples like Apple’s efforts to hold down prices (until today) being thanks to “back room deals”. Nobody’s buying some DRAM to build a memory stick in their garage. Apple, Raspberry Pi, Supermicro, and OpenAI all have the same claim to supply you do: you can buy it with money, with the seller being allowed to charge what they want. In fact, high prices are going to be the only way to stimulate supply and encourage the billion dollar investment in additional memory fabs. Price controls or other supply-killing mechanisms are known not to work - it’s Econ 101. | | |
| ▲ | angoragoats 5 hours ago | parent [-] | | You ignored the part where I mentioned "extreme" and "locked up." To be fair I wasn't necessarily clear what those meant. I'm specifically referring to the deal(s) that OpenAI signed which reserved an outsized chunk of the memory supply, for what is apparently speculative future hardware that hasn't been built yet, or at least to build hardware that no consumer or business will ever be able to physically purchase. Hopefully you'll agree that there's a difference between even a large buyer like Apple reserving a large chunk of DRAM supply to put in their products that they sell to consumers, and the anti-competitive behavior by OpenAI that I describe above. |
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| ▲ | angoragoats 12 hours ago | parent | prev [-] | | Barring any single company from negotiating to buy more than a certain percentage of a given existing market of goods would be a start. Companies would still be free to build their own factories/fabs if they didn't like it. That, and putting Sam Altman in jail for being a lying fraudster. | | |
| ▲ | Danox 5 hours ago | parent [-] | | One or two companies will come out of this, designing and engineering memory and partnering with someone else to do the fab of that memory no different than making processor chips in Arizona. |
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| ▲ | mmcnl 7 hours ago | parent | prev | next [-] | | The AI "market" is not a free market. It needs regulation. | |
| ▲ | slopinthebag 9 hours ago | parent | prev [-] | | What evidenced-backed regulation would solve this problem? |
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| ▲ | groundzeros2015 13 hours ago | parent | prev | next [-] | | The cure for high prices is high prices. This increase in demand is encouraging economization. Factories which make components are trying to operate for more hours. Producers who haven’t gotten into RAM may try it out. Large companies like Apple may test alternative suppliers. Consumers who don’t really need an upgrade will wait, allowing others who need it to buy one. | | |
| ▲ | hackingonempty 12 hours ago | parent [-] | | Unfortunately, RAM is more like a taxi than an umbrella. > Anyone who’s spent any time in New York City knows that when it begins to rain, two things happen immediately: It becomes easier to buy an umbrella and it becomes harder to hail a cab. As soon as the first few drops fall, people appear on the street selling cheap umbrellas, while a lucky few pedestrians occupy all the available cabs. http://shirky.com/2001/01/ | | |
| ▲ | groundzeros2015 12 hours ago | parent [-] | | No? It’s an interchangeable component which is manufactured at scale by many suppliers. Even though the elasticity of supply for taxis is less, rain encourages taxis to get on the road, and work longer to serve the spike in demand. With ride sharing apps the pool of supply is even more elastic. | | |
| ▲ | hackingonempty 12 hours ago | parent [-] | | Building a RAM factory is a major investment and takes a lot of time. There is a big risk that by the time you enter production the rain will have stopped in the form of reduced demand and/or algorithmic improvements that reduce the memory required to produce good results. All of the attention is on the well funded frontier labs who may be buying up RAM as much to starve out competitors as anything else while in the background there is an army of researchers all over the world who only have a handful of consumer GPU to work with. | | |
| ▲ | groundzeros2015 12 hours ago | parent [-] | | I already mentioned 3 ways we get more RAM and none of them require building new factories. Although, I would not doubt that effort is also ongoing. | | |
| ▲ | hackingonempty 12 hours ago | parent [-] | | The only one you mentioned was existing factories extending production hours. AFAIK they already operate 24/7! Apple can't switch suppliers because everyone is selling out. Semiconductor factories are specialized and can't be easily switched to other types. It takes time and money and it stops making money for the duration, leading to a similar risk analysis as building a new one. | | |
| ▲ | Danox 5 hours ago | parent | next [-] | | Apple can’t switch now, but they can take it in the house over the next 3 to 4 years to avoid this fiasco again. They have the right new CEO for the job. He’s a designer and engineer of chips, and since Apple didn’t waste money on the AI model/Data Center building exercise. They certainly have the money to get it done in house, long-term, why? after this fiasco, the Chinese are going to have a much bigger piece of the memory market worldwide. So strategically, it pays to bring it memory in house in partnership with TSMC in Arizona or Oregon. | |
| ▲ | groundzeros2015 11 hours ago | parent | prev [-] | | 1. existing factories increasing production
2. factories but are not making ram switch
3. Large consumers of ram use alternatives, broadening the supply And let’s suppose none of these make a mark and a new factory needs to be built or something.
This means:
1. You wait for build out and prices go down.
2. Prices go down anyway because demand is not sustainable. And to turn it around, when you buy an expensive GPU to play computer games you are claiming a valuable industrial resource. Should the government subsidize your home consumption use case? Computer technology is a scarce resource with many uses. | | |
| ▲ | throw2ih020 10 hours ago | parent [-] | | > existing factories increasing production All existing factories have maximized their production. > factories but are not making ram switch It takes 2-3 years to switch, by which time demand may have satisfied from other manufacturers building additional capacity. So ironically, investing too much into new capacity can be dangerous. > Large consumers of ram use alternatives, broadening the supply What alternative exists for NAND flash? | | |
| ▲ | groundzeros2015 7 hours ago | parent [-] | | > All existing factories have maximized their production. Citation needed. This is almost certainly not true because capacity is not binary but an efficiency curve. As the cost of RAM increases it becomes economical to operate the factory at higher capacities. > It takes 2-3 years to switch Citation needed. Who sets the max speed limit for changing? > What alternative exists for NAND flash? There is a whole range of suppliers. The alternative is which flash and who manufactures it. | | |
| ▲ | compiler-guy 6 hours ago | parent [-] | | It takes about 3-4 years to build a fab and ten-billion dollars. https://download.intel.com/newsroom/2022/manufacturing/fab-f... And even if someone were able to magically build one in half the time, that would certainly drive up the cost quite dramatically, and would still be two-ish years from production. The history of the memory industry is jam-packed with booms and busts, and companies that over-provisioned capacity during the boom times, only to have the bust happen as the fab is coming on line, are the ones that fail. =-=-=-= "William de Gale, portfolio manager at BlueBox Asset Management, told CNBC’s Europe Early Edition on Wednesday that the industry tends to have “enormous ups and downs”. “In the long run it’s a pretty dreadful industry,” he said. “I suspect that’s still the case every time people make an argument that the memory cycle is gone, and it’s now a long-term value-creating industry – just before it all goes horribly wrong.” https://www.cnbc.com/2026/05/25/memory-stocks-cyclical-boom-... | | |
| ▲ | Danox 5 hours ago | parent [-] | | $10 billion dollars, 3 to 4 years, that’s less time to build a new modem chip that works. that’s less time to build a new M series processor that works. Google, Microsoft, and Meta We’ll spend close to $500 billion in 2026, just on their AI dreams, I would say having a supply of memory chips is vital towards your business if you’re someone like Apple or AMD or Nvidia, these days these days, if you want to design the devices you need to design, so who’s going to take it in house? |
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| ▲ | butlike 12 hours ago | parent | prev | next [-] | | Yeah but if you think about it... you don't really _NEED_ any of this stuff. It's all "want" and not "need" deep down. We don't really need smartphones, we're just led to believe we can't live without them. | | |
| ▲ | Libcat99 12 hours ago | parent | next [-] | | This is true in the same sense you don't need to own a pair of shoes. Technically, sure, but there are jobs that require you to have a phone (at many different career points too), colleges that expect it, and more. And while there may be workarounds, they are often workarounds at someone else's expense, such as asking someone else to check the class schedule or work schedule. So yes. You don't need to own a smart phone. And you don't need to own shoes. Both will get you (understandable) looks from general society. Both will limit what you can do. Both are somewhat understandable as having become a default, expected thing that people WILL have. | | |
| ▲ | user43928 5 hours ago | parent [-] | | We were talking here about whether it is necessary for the government to intervene because of rising prices for consumer electronics, particularly high-end Apple products. In that context, it is not only technically true that you do not need to buy those products. This simply does not strike me as an issue where the government would need to step in and regulate the market. | | |
| ▲ | TalkingCodeMonk 3 hours ago | parent | next [-] | | > because of rising prices for consumer electronics, particularly high-end Apple products Here's your problem. This is not a consumer or Apple-specific issue whatsoever. Computing hardware is critical infrastructure in the digital age. The AI boom is inflating the cost of almost all compute for every business, including the cost of all cloud computing. It's alot like housing, in that the average cost of housing directly inflates the average cost of living, impacting the poorer many orders of magnitude more than the richer. When all governments, companies, and individuals depend on computers to amplify productivity or deliver services, a significant increase in price will impact every government, company, and indiviudal. An extremely small number of individuals or orgs being able to dramatically impact critical infra, and the cost of living – regardless of why – is a major national security and supply chain failure. This is the entire reason why monopolies and too-big-to-fail entities are bad for everyone, and anti-trust laws were created to being with; to prevent an extreme minority from influencing markets in such a way that it is detrimental to consumers and other market players or sectors. | |
| ▲ | Danox 5 hours ago | parent | prev [-] | | The Chinese won’t be sitting around? They will consider it a vital area. And they will keep the engines going sitting back and daydreaming will only leave you further behind… I don’t think government needs to get involved in the West, but some of those companies affected that have the resources are gonna have to reconfigure themselves and design around the three memory companies. The Chinese certainly will. |
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| ▲ | compiler-guy 6 hours ago | parent | prev | next [-] | | "A linen shirt … is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct." --Adam Smith (yes, that Adam Smith)
_Inquiry into the Nature And Causes of the Wealth of Nations_ | |
| ▲ | kube-system 8 hours ago | parent | prev | next [-] | | Technology and semiconductors are part of the supply chain for all modern necessities. | |
| ▲ | 650REDHAIR 5 hours ago | parent | prev | next [-] | | I mean… My banks in the US and abroad all require 2fa and some of them are app-based 2fa not just SMS. All traditional banks- no neobanks. Some government services require apps or the experience is infinitely worse without a smartphone. Do we need the newest/fastest/best? Probably not, but I don’t see any major mobile OS making software more efficient for older/ lesser hardware and if you try to hold onto your old phone eventually it will be vulnerable to attacks after support for it ends. It’s gross. | |
| ▲ | angoragoats 12 hours ago | parent | prev | next [-] | | I want to believe this is true, but I am increasingly encountering situations IRL where saying "I don't have a smartphone" would be a serious hindrance to doing whatever it is I'm doing. | | |
| ▲ | butlike 12 hours ago | parent [-] | | What helped me come to my conclusion is trying to come up with concrete examples, so like "I need a smartphone cause I need maps going to a place I've never been before" instead of "I need a smartphone for whatever it is I'm doing." Then I can be like: well, the trip sends me to the boonies, so maybe I'll have a printed/offline map as a backup, just in case. |
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| ▲ | as1mov 12 hours ago | parent | prev [-] | | It's 2026, the _WANTS_ are reserved for the ultra wealthy. The rest of us plebs should be happy we're getting 1500 calories everyday with a room to go back to in the evening, after increasing shareholder value everyday. Oh and don't forget to reduce your plastic usage to save the planet. |
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| ▲ | qaq 13 hours ago | parent | prev [-] | | If people were not consuming their services they would not be buying inference hardware at this rate so it's pretty much on consumers. | | |
| ▲ | Insanity 13 hours ago | parent | next [-] | | They are reserving future HW productions to meet their hypothetical usage as well. Which is why others (like Apple) can’t reserve it for their future products. Yet the AI labs are speculating on usage, and spending money from investments without clear revenue path. | | |
| ▲ | qaq 13 hours ago | parent | next [-] | | Yes 65B ARR that Anthropic has is clear indication there is no path to revenue. | | |
| ▲ | Insanity 12 hours ago | parent | next [-] | | Sorry, I should have said "profit path", good catch!
They have revenue, but their cost scales with revenue and they're losing more than they are making. See: https://www.wheresyoured.at/brokenomics/ for an interesting write-up on the economics of AI. | | |
| ▲ | brookst 7 hours ago | parent | next [-] | | Their costs do not scale linearly with revenue. Inference is expensive, but it's a variable cost. Anthropic's overall costs include massive fixed costs in training, which are the same regardless of usage. It's easy to falsify the claim with a simple experiment: imagine they had no customer at all, $0 in revenue. Their costs would still be massive. If the claim were true, $0 revenue should mean $0 costs, right? | |
| ▲ | qaq 12 hours ago | parent | prev [-] | | If people are sure they can always short NVIDIA |
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| ▲ | mrbungie 13 hours ago | parent | prev [-] | | How much money does that revenue cost though? If I had to steel-man GPs argument I'd ask for profits rather than revenues. | | |
| ▲ | qaq 13 hours ago | parent [-] | | We will see once they go public Dario did claim profit margin on inference is 40% if memory serves me right | | |
| ▲ | mrbungie 12 hours ago | parent | next [-] | | That's convenient accounting. The reality is that they can't stop training since they risk losing customers if they do so. So they shouldn't factor it out of profitability analysis. | | |
| ▲ | qaq 12 hours ago | parent [-] | | A lot of factors there we will see how it plays out. |
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| ▲ | overgard 12 hours ago | parent | prev [-] | | Yes Dario is well known for his honesty | | |
| ▲ | qaq 12 hours ago | parent [-] | | hence the bit about us learning the actual state of things once they are a public company. |
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| ▲ | danabrams 13 hours ago | parent | prev [-] | | This is not sustainable forever unless their hypothetical usage is realized, and eventually the bill will come due. Meanwhile, component makers will surely be spinning up more capacity, some of them in a foolhardy manner, and if the bubble does burst, 3-6 months later we'll be seeing fire sales on components and component makers going bankrupt (or getting bailouts, if considered of national importance) | | |
| ▲ | butlike 12 hours ago | parent [-] | | I feel like the fact Apple raised their prices means they foresee this lasting a lot longer than 3-6 months. | | |
| ▲ | ErneX 12 hours ago | parent [-] | | This is going to be the 1st increase of a series of increases. I don’t think this will ease in the next 2-3 years. |
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| ▲ | coldtea 13 hours ago | parent | prev | next [-] | | People will consume a lot of things offered below actual cost thanks to VC and cheap loans. Doesn't mean people would legitimately use them enough to warrant such infrastracture demand, if they were priced according to actual costs. So it's a distorted market. | | |
| ▲ | qaq 12 hours ago | parent [-] | | Most of Anthropic revenue looks to be companies paying for Claude Code at API prices ... | | |
| ▲ | coldtea 5 hours ago | parent [-] | | Companies will consume a lot of things offered below actual cost thanks to VC and cheap loans. | | |
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| ▲ | rpgbr 13 hours ago | parent | prev | next [-] | | Ask every Windows 11 or Google consumer that doesn't give a damn for AI and, yet, has been almost forced to use Copilot and Gemini… | |
| ▲ | crypttales 13 hours ago | parent | prev [-] | | [dead] |
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