8 ms·
To those who haven't heard how colossal the size of OpenAIs contracts are. 900,000 wafers monthly. Tom's hardware estimates that is equal to 40% of global dram
by AndrewDavis 10mo ago
To those who haven't heard how colossal the size of OpenAIs contracts are.
900,000 wafers monthly. Tom's hardware estimates that is equal to 40% of global dram production capacity.
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...
- 01HNNWZ0MV43FF 10mo agoAt that point even if the AI bubble bursts you have a solid business as a RAM scalper
- jack_tripper 10mo agoYou mean OpenAI will profit selling their RAM stocks if the AI bubble bursts? I doubt it honestly. If the AI bubble bursts, then global demand will collapse altogether crashing the value of HW.
- euroderf 10mo agoFree GPUs for everyone! Bring a truck!
- amarcheschi 10mo agoI honestly can't wait to use used gpus as lego bricks similar to what kids in Weimar republic did with cash
- jack_pp 10mo agoNever gonna happen. Cash has no intrinsic value exccept maybe for use in fire / toiler paper. GPUs while currently inflated in price will always find enough value. Their price might go down 50-75% but never 99%
- oblio 10mo ago> GPUs while currently inflated in price will always find enough value. What is the instrinsic value of one of millions of GPUs, if the world only needs 15-20% of them?
- immibis 10mo agoAbout fifty teraflops. That's the meaning of intrinsic calor - the device can do what it can do, regardless of market conditions. Today it has the value of fifty teraflops, and tomorrow it still does, unless it breaks. However, intrinsic value cannot be measured in dollars.
- oblio 10mo agoAnd yet we're talking about electronics here, they don't have sentimental value and just because compute capacity is unused there are no guarantees that it will be used, even at a per unit cost approaching €0. I'm sure that farmers during the Great Depression were also consoling themselves with the "intrisinsic caloric value" of their corn.
- Dylan16807 10mo agoDemand for GPU power is much more elastic than demand for food calories.
- oblio 10mo agoFood calories are cheaper to convert into something useful. It's not like GPUs, once bought for peanuts, turn into perpetual motion machines. They need power, cooling, a whole infrastructure built around them. GPUs would have taken the world by storm already in the roughly 30 years since they've been around. Even for GenAI it's likely ASICs take over at some point if we really care about performance.
- Dylan16807 10mo ago
- euroderf 10mo agoMy self-training robot army is poised to conquer all. It's merely waiting for parts.
- Maken 10mo agoThe most likely outcome is kids in third world countries extracting the valuable metals from piles of discarded GPUs.
- yourusername 10mo agoAfter GPU crypto mining became unprofitable Chinese manufacturers took "mining only" cards, desoldered the GPU and built new graphics cards using the chips. So at least the lower end stuff (RTX6000) could be repurposed like that.
- herewulf 10mo agoSoon you will bring a wheelbarrow of GPUs to buy a loaf of bread.
- Fokamul 10mo agoIf AI bubble bursts -> global market crash. Ehm, with what you will be scalping, with bottle caps fallout money? :D
- leptons 10mo agoI don't really buy that AI crashing will cause "the global market" to crash. How exactly do you think that works?
- gbil 10mo agoNow thinking of this from the other side, 2 big DRAM producers are taking the risk to dedicate a very big part of their production to AI and if we assume they also have similar deals with other AI companies or big datacenters, what is their risk profile if the AI bubble bursts? Are they viable as companies then ? What is their plan B ?
- K0balt 10mo agoI think the price increases we are seeing are a direct result of the skepticism about AI scale viability. The big dram houses aren’t increasing capacity, due to the risks you mention. So demand from other sources has to be suppressed through being priced out in order to meet those supply promises made to OAI in ignorance of their true scale. This is OAI doing suppliers dirty by making economy distorting moves without transparency, intentionally distorting the market in an effort to hurt competitors. Yet another example of the “free market” creating destruction for the general public. As a thought experiment, replace “dram” with “rice” or another essential food stock. Market manipulation such as this is wildly irresponsible, anti-humanity and antithetical to public good. Wars are started over less. This is an excellent example of the actual alignment of OpenAI as an organization. Yet we are to trust them with leading the way in the alignment of our manque oracles of truth and power?
- dist-epoch 10mo ago> The big dram houses aren’t increasing capacity, due to the risks you mention. Except they are > SK hynix to boost DRAM production by a huge 8x in 2026, still won't be enough for RAM shortages > It's also not just SK hynix that is boosting DRAM production capacity, with both Samsung and Micron rapidly increasing their respective DRAM production numbers. https://www.tweaktown.com/news/109011/sk-hynix-to-boost-dram-production-by-a-huge-8x-in-2026-still-wont-be-enough-for-ram-shortages/index.html https://www.tweaktown.com/news/109011/sk-hynix-to-boost-dram...
- letmetweakit 10mo agoIs this new capacity or will some kind of other chip type suffer?
- atwrk 10mo agoI find it very telling that both Samsung and SK Hynix already stated that they don't plan to expand capacity - officially to prevent overcapacity in the future. It would also be plausable that both doubt OpenAI will follow through with the contract.
- paol 10mo agoThey don't need to expand capacity to fulfill this contract. They would want to expand capacity if they believed this increase in demand is long lasting - the implication is therefore that they don't believe it, or not enough to risk major capital expenditures. You saw the same with GPU makers not wanting to expand capacity during the Cryptocurrency boom. They don't want to be left holding the bag when the bubble pops.
- davey48016 10mo agoOil has been like that as well. High oil prices don't trigger nearly as much drilling as they used to. https://www.cbsnews.com/news/oil-production-prices-us-companies-wont-increase-2022-dallas-fed-survey/ https://www.cbsnews.com/news/oil-production-prices-us-compan...
- whaleofatw2022 10mo agoPart of that equation, FWIW, is that certain countries would flood the market with supply to make any new projects suddenly unprofitable. Which sucks extra bad because if you shut the project down but start it back up you can't just flip a switch. Gotta put together a whole new team and possibly retrain them.
- jorvi 10mo ago"prevent overcapacity" is just a fancy way of saying "we prefer to gouge consumers at little risk to us." Hopefully the Chinese manufacturers ram(p) up rapidly and spike Hynix and Samsung with heavily undercut prices.
- 10mo ago
- spacebanana7 10mo agoThis also creates massive risk. Financial trouble at OpenAI - even minor stuff where they slow purchases by 25% - could have a big impact on global prices.