4 ms·

What specifically happened in June to set this off? It can't just be "waves hands AI/LLMs" because ChatGPT has existed for years.

by zahlman 11mo ago

cogman10 11mo ago
"Waves hands at AI/LLMs" The problem is that training these models and using these models has required exponentially increasing amounts of memory. ChatGPT has existed for years and in those years it's userbase and model size has increased tremendously. Not to mention the fact that a lot of competitors have sprung up in the wake of GPT. Including the likes of cloud based open model hosting services.
AdieuToLogic 11mo ago
> What specifically happened in June to set this off? Tariffs implemented by this administration: "Inflation has begun to show the first signs of tariff pass-through," said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. "While services inflation continues to moderate, the acceleration in tariff-exposed goods in June is likely the first of greater price pressures to come. The Fed will want to hold steady as it awaits more data."[0] 0 - https://www.reuters.com/business/us-inflation-expected-rise-june-with-tariff-driven-price-hikes-2025-07-15/ https://www.reuters.com/business/us-inflation-expected-rise-...
- IAmGraydon 11mo ago
  Afraid not. This has not happened across the board to all components.
  - AdieuToLogic 11mo ago
    > Afraid not. This has not happened across the board to all components. Afraid so. Industry impact from tariffs does not require them to be applied "across the board to all components." See here[0] for more information. With erratic massive tariff proclamations, counter-tariffs are to be expected. All it takes for companies to inflate prices is to either: A) be provably impacted by tariffs B) be opportunistic by being "tariff adjacent" The net result is directly or indirectly, the tariffs implemented and/or threatened to be so are a significant contributor to electronic component costs. 0 - https://www.tradecomplianceresourcehub.com/2025/12/03/trump-2-0-tariff-tracker/ https://www.tradecomplianceresourcehub.com/2025/12/03/trump-...
- pprotas 11mo ago
  Why did European prices have the same increase then?
  - AdieuToLogic 11mo ago
    > Why did European prices have the same increase then? Where do Europeans get their DRAM from? If it is the same handful of companies the US gets their DRAM from, then why would Europeans pay any less? Because the EU is not engaging in the same asinine trade war? Sounds good in theory, but in practice those same few companies can set prices for markets outside the US to be at/near US prices. It doesn't take much effort for manufacturers to set their prices at or near those of their competitors and rely on an implicit mutually assured destruction[0] understanding. 0 - https://en.wikipedia.org/wiki/Mutual_assured_destruction https://en.wikipedia.org/wiki/Mutual_assured_destruction
    - crote 11mo ago
      > If it is the same handful of companies the US gets their DRAM from, then why would Europeans pay any less? ... because tariffs are paid for by the buyer? Importing memory from Korea to the US means the importer had to pay a tariff. Importing memory from Korea to Europe means the importer does not have to pay a tariff. The company selling the memory gets exactly the same amount of money in either case.
    - ben_w 11mo ago
      > Sounds good in theory, but in practice those same few companies can set prices for markets outside the US to be at/near US prices. It doesn't take much effort for manufacturers to set their prices at or near those of their competitors and rely on an implicit mutually assured destruction[0] understanding. If a company in A sells a widget W to both the EU and the USA, such that a consumer in the EU and the USA pay the same prices even though the USA has a tariff and Europe doesn't, then the company will make a lot more profit per unit selling all their W in the EU and none in the USA. I'm not at all sure what's happening at any given moment with the USA's tariffs on anything, given the chaos over there. But let's say W is the set of all things relevant to AI data centres. What this means is that all the data centres are now much cheaper to build in Europe rather than in the USA. Data centres can be put just about anywhere, given they're used over the internet anyway. This means that the companies selling W would have all the demand they want for W in the EU, so they could sell all of their supply of W in the EU, so they could get a higher profit margin on all of it. I'm not sure how much DC investment money is going to which parts of the world, but I am sure that if all the suppliers stopped shipping to the USA because they could sell as much as they could make everywhere else in the world for more profit (and the same purchaser price after tariffs), I would have heard about it.
- pjc50 11mo ago
  The tariffs are bad, but you're simply wrong here - US tariffs do not affect global prices, it's OpenAI buying up production in advance and cornering the market.
  - energy123 11mo ago
    There's a 4 month gap between June and October
eru 11mo ago
Perhaps some tariff shenanigans?
Maxion 11mo ago
OpenAI bought up a big chunk of global DRAM production: https://www.tomshardware.com/pc-components/dram/openais-stargate-project-to-consume-up-to-40-percent-of-global-dram-output-inks-deal-with-samsung-and-sk-hynix-to-the-tune-of-up-to-900-000-wafers-per-month https://www.tomshardware.com/pc-components/dram/openais-star...

What specifically happened in June to set this off? It can't just be "waves hands AI/LLMs" because ChatGPT has existed for years.

by zahlman 11mo ago

What specifically happened in June to set this off? It can't just be "waves hands AI/LLMs" because ChatGPT has existed for years.

cogman10 11mo ago

"Waves hands at AI/LLMs" The problem is that training these models and using these models has required exponentially increasing amounts of memory. ChatGPT has existed for years and in those years it's userbase and model size has increased tremendously. Not to mention the fact that a lot of competitors have sprung up in the wake of GPT. Including the likes of cloud based open model hosting services.

AdieuToLogic 11mo ago

> What specifically happened in June to set this off? Tariffs implemented by this administration: "Inflation has begun to show the first signs of tariff pass-through," said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. "While services inflation continues to moderate, the acceleration in tariff-exposed goods in June is likely the first of greater price pressures to come. The Fed will want to hold steady as it awaits more data."[0] 0 - https://www.reuters.com/business/us-inflation-expected-rise-june-with-tariff-driven-price-hikes-2025-07-15/ https://www.reuters.com/business/us-inflation-expected-rise-...

IAmGraydon 11mo ago
Afraid not. This has not happened across the board to all components.
- AdieuToLogic 11mo ago
  > Afraid not. This has not happened across the board to all components. Afraid so. Industry impact from tariffs does not require them to be applied "across the board to all components." See here[0] for more information. With erratic massive tariff proclamations, counter-tariffs are to be expected. All it takes for companies to inflate prices is to either: A) be provably impacted by tariffs B) be opportunistic by being "tariff adjacent" The net result is directly or indirectly, the tariffs implemented and/or threatened to be so are a significant contributor to electronic component costs. 0 - https://www.tradecomplianceresourcehub.com/2025/12/03/trump-2-0-tariff-tracker/ https://www.tradecomplianceresourcehub.com/2025/12/03/trump-...
pprotas 11mo ago
Why did European prices have the same increase then?
- AdieuToLogic 11mo ago
  > Why did European prices have the same increase then? Where do Europeans get their DRAM from? If it is the same handful of companies the US gets their DRAM from, then why would Europeans pay any less? Because the EU is not engaging in the same asinine trade war? Sounds good in theory, but in practice those same few companies can set prices for markets outside the US to be at/near US prices. It doesn't take much effort for manufacturers to set their prices at or near those of their competitors and rely on an implicit mutually assured destruction[0] understanding. 0 - https://en.wikipedia.org/wiki/Mutual_assured_destruction https://en.wikipedia.org/wiki/Mutual_assured_destruction
  - crote 11mo ago
    > If it is the same handful of companies the US gets their DRAM from, then why would Europeans pay any less? ... because tariffs are paid for by the buyer? Importing memory from Korea to the US means the importer had to pay a tariff. Importing memory from Korea to Europe means the importer does not have to pay a tariff. The company selling the memory gets exactly the same amount of money in either case.
  - ben_w 11mo ago
    > Sounds good in theory, but in practice those same few companies can set prices for markets outside the US to be at/near US prices. It doesn't take much effort for manufacturers to set their prices at or near those of their competitors and rely on an implicit mutually assured destruction[0] understanding. If a company in A sells a widget W to both the EU and the USA, such that a consumer in the EU and the USA pay the same prices even though the USA has a tariff and Europe doesn't, then the company will make a lot more profit per unit selling all their W in the EU and none in the USA. I'm not at all sure what's happening at any given moment with the USA's tariffs on anything, given the chaos over there. But let's say W is the set of all things relevant to AI data centres. What this means is that all the data centres are now much cheaper to build in Europe rather than in the USA. Data centres can be put just about anywhere, given they're used over the internet anyway. This means that the companies selling W would have all the demand they want for W in the EU, so they could sell all of their supply of W in the EU, so they could get a higher profit margin on all of it. I'm not sure how much DC investment money is going to which parts of the world, but I am sure that if all the suppliers stopped shipping to the USA because they could sell as much as they could make everywhere else in the world for more profit (and the same purchaser price after tariffs), I would have heard about it.
pjc50 11mo ago
The tariffs are bad, but you're simply wrong here - US tariffs do not affect global prices, it's OpenAI buying up production in advance and cornering the market.
- energy123 11mo ago
  There's a 4 month gap between June and October

eru 11mo ago

Perhaps some tariff shenanigans?

Maxion 11mo ago

OpenAI bought up a big chunk of global DRAM production: https://www.tomshardware.com/pc-components/dram/openais-stargate-project-to-consume-up-to-40-percent-of-global-dram-output-inks-deal-with-samsung-and-sk-hynix-to-the-tune-of-up-to-900-000-wafers-per-month https://www.tomshardware.com/pc-components/dram/openais-star...