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Sam Altman’s DRAM Deal
- chasing0entropy 11mo agoNow this... was a really good move. OP is also marginally underestimating the impact this move would have on Google's competitiveness - they are making huge gains prototyping at light speed; this will halt their AI hardware acceleration plans pushing them back into slower software development on ever aging hardware. It also shows why Nvidia is not afraid of competitors coming out with new desgings that obsolete their hardware: what good are superior designs with no fabs to produce them?
- darthoctopus 11mo agoevery one of these things that make the deal "good" for OpenAI is a direct result of negative externalities for everyone else: competitors, consumers, and people who wouldn't care otherwise.
- nerdponx 11mo agoThe article even says that they don't have an obvious plan for how to use the wafers they bought, and very clearly suggests that this is purely an anticompetitive tactic to force everyone else to eat a price increase that OpenAI doesn't need to face. It's clever though because if any regulatory agency starts asking questions (not that they would do that in the current USA political climate) then OpenAI can just say it's a strategic reserve, we have plans to do something with it, etc. etc. What are you going to do? Take them to court and force them to auction off some % of the stock? Set an industry-wide limit on wafer inventory? Fine them? You'd need to find some evidence that it was done maliciously, and good luck with that. There are some negative elements of captialism that we might simply have no reasonable regulatory apparatus to deal with. Preventing indivduals and companies from having so much market power in the first place seems to be the only thing that can work consistently.
- LarsDu88 11mo agoI wonder if this kills Valve's Steam Machine and Steam Frame
- wingmanjd 11mo agoI've been selfishly wondering the same thing. The Frame is on my shortlist (as long as the price wasn't too crazy).
- ycombinatrix 11mo ago16 gigs announced in the Steam Frame, hope they bought the memory already.
- UncleOxidant 11mo agoAs is mentioned in the article, depends on when they bought their DRAM contracts. If they were in before this then they'll be fine for a while.
- TranquilMarmot 11mo agoYes, I have an older gaming PC from ~2018 that I keep putting off upgrading (first GPU prices skyrocketed, now this...) and was hoping to replace it with a Steam Machine next year. Will be endlessly bummed if that doesn't happen. Will also be interesting if Sony/Microsoft was planning on releasing a next-gen system anytime soon, and I wonder if this will affect Apple's hardware at all.
- NegativeLatency 11mo agoI’m in a similar place, tried bazzite recently and was pleasantly surprised that it plays all my games well
- throwaway73864 11mo ago[flagged]
- badlibrarian 11mo agoI'm reminded of the 1983 deal to corner the market on Frozen Concentrated Orange Juice.
- y1n0 11mo agoSell! Sell! Get back in there and sell!
- sgroppino 11mo agoI remember it didn’t work out well for Randolph and Mortimer. Sam may pull it out, though, if he just sells the DRAM now while the market is still hot.
- esafak 11mo ago"Mortimer ... we're back!"
- UncleOxidant 11mo agoOr the Hunt brothers and silver which was just a few years before that. How'd that turn out? https://en.wikipedia.org/wiki/Silver_Thursday#:~:text=On%20January%207%2C%201980%2C%20in,causing%20panic%20in%20the%20markets. https://en.wikipedia.org/wiki/Silver_Thursday#:~:text=On%20J...
- hodgehog11 11mo agoThat's a great comparison. The consequences are pretty universal too. History implies this won't end well for OpenAI.
- ares623 11mo agoThis will make AI even more palatable for the general population /s
- deleted 11mo ago[deleted]
- john01dav 11mo agoDoes this violate anti trust law?
- JSR_FDED 11mo agoIf OpenAI were actually using the RAM that’s one thing - but stockpiling raw wafers in warehouses is egregious.
- ares623 11mo agoMaybe they’ll build nice little forts with the wafers
- arjie 11mo agoGuys, these are silicon wafers not bars of steel. You can't just stockpile 40% of annual capacity in a warehouse long-term. I would be incredibly surprised to find that any such large scale storage facility exists. Any storage of undiced wafers is temporary while the manufacturing pipeline proceeds. You've seen the pictures of clean rooms and stuff. There's no way you spend all that effort to make the wafer and then just stick it in a warehouse. Who even is going to make such a large cleanroom facility? And for what exactly? It doesn't even pass the basic sniff test. Much more likely this is just a detail of the contract so that OpenAI can guarantee allocation. I would be surprised if the actual wafers entered OpenAI hands before being fully packaged.
- JSR_FDED 11mo agoReally, you don’t think there is enough storage room in the world? It would require half of one distribution center of a major retailer.
- mlsu 11mo agoMoves like this should be illegal. It's becoming increasingly clear that OpenAI is going to get lapped by Google on technical merits. So this is the "code red" solution? Supply shenanigans? They are getting beat in the developer market by Anthropic. And getting beat on fundamental tech by Google. This is a company whose ostensible mission is to "benefit all of humanity" ...
- nextworddev 11mo ago[flagged]
- nextworddev 11mo ago[flagged]
- imbusy111 11mo agoSeems like it is, but the question is whether the current Justice Department will do anything about it.
- semiquaver 11mo ago> Seems like it is Do you have a citation for what law is being violated? Or just vibes?
- ajross 11mo agoMarket manipulation is a crime under the Securities Exchange Act of 1934. You can't buy things to influence the price or the market, only to use or resell. https://en.wikipedia.org/wiki/Market_manipulation https://en.wikipedia.org/wiki/Market_manipulation
- dmix 11mo agoThat'd probably make more sense if there wasn't also 50 other tech companies buying up RAM for the same reason (a sudden huge spike in demand due to AI taking off).
- pshirshov 11mo agoI have a 32 GiB DDR5 set, happy to exchange for $500K in cash or a nice little house in Spain.
- embedding-shape 11mo agoI have a nice little house in Spain, I'm willing to trade it for 128GB of RDIMM DDR5.
- embedding-shape 11mo ago> Budget brands normally buy older DRAM fabrication equipment from mega-producers like Samsung when Samsung upgrades their DRAM lines to the latest and greatest equipment. This allows the DRAM market to expand more than it would otherwise because it makes any upgrading of the fanciest production lines to still be additive change to the market. However, Korean memory firms have been terrified that reselling old equipment to China-adjacent OEMs might trigger U.S. retaliation…and so those machines have been sitting idle in warehouses since early spring. This seems to almost be mentioned off-hand, but isn't this a really bad and un-free market, and a much bigger issue? Korean companies are afraid of doing business with Chinese companies because of the US, because of retaliation? This was not the "free and global market" I thought we were supposed to have at this point. If production lines of DRAM are hindered by the politics of a unrelated 3rd party, then this seems to be a stronger cause of the current shortage than "a very large customer buying a lot in a short period of time".
- bee_rider 11mo agoErr… is there any question that the US is trying to slow down China’s high-tech computer development? I thought that was our open goal. Countries decided the extent to which they’d like to engage in free trade together. It is a knob that we’d hope our leaders would turn strategically. (Regardless of whether or not we think our leaders actually are doing a good job of it…).
- embedding-shape 11mo ago> I thought that was our open goal. Is the goal also to hurt South Korean businesses and all businesses in the world, just to "pwn China" basically?
- bee_rider 11mo agoWe’re probably also spurring China to develop more independently. I don’t think it is a good plan, just an unconfusing one.
- throw7 11mo ago"...their deals are unprecedentedly only for raw wafers — uncut, unfinished, and not even allocated to a specific DRAM standard..." wtf. life sucks.
- Mistletoe 11mo agoThat $7 trillion number makes more sense now.
- arjie 11mo agoThere's nothing dirty about this deal. When making a large deal with one vendor he didn't disclose to them that he was making a deal with another vendor. That's pretty normal when you're trying to buy a lot of stuff. Otherwise, they can collude to shake you down. I'm not thrilled about this genre of "guy I don't like does totally normal thing so it's bad". It's too engagement baity. EDIT: Though even that may be wrong. TechCrunch reports that it was a joint meeting between the South Korean President, the heads of the two companies, and Sam Altman. I won't claim that TC is the bible but there's lots of stuff being reported that makes no sense, and this is a good deal for both these companies so it's more believable than news from someone that OpenAI is going to buy a bunch of wafers and stick it in a warehouse. https://techcrunch.com/2025/10/01/openai-ropes-in-samsung-sk-hynix-to-source-memory-chips-for-stargate/ https://techcrunch.com/2025/10/01/openai-ropes-in-samsung-sk...
- hamandcheese 11mo ago> OpenAI isn’t even bothering to buy finished memory modules! No, their deals are unprecedentedly only for raw wafers — uncut, unfinished, and not even allocated to a specific DRAM standard yet. It’s not even clear if they have decided yet on how or when they will finish them into RAM sticks or HBM! Right now it seems like these wafers will just be stockpiled in warehouses That is not "totally normal".
- bee_rider 11mo agoIt seems not normal (in the sense that it is obviously quite weird to but like half of the world’s RAM supply). But I wonder if they are also just not ready to announce what they are doing with it? I mean with that many wafers, I guess it is possible that they’d be doing something pretty custom with the things…
- justinclift 11mo ago> But I wonder if they are also just not ready to announce what they are doing with it? Didn't they announce some kind of AI-silicon recently? Wouldn't it be for that?
- mxfh 11mo agoSecondary RAM Manufacturing Had Stalled. Budget brands normally buy older DRAM fabrication equipment from mega-producers like Samsung when Samsung upgrades their DRAM lines to the latest and greatest equipment. This allows the DRAM market to expand more than it would otherwise because it makes any upgrading of the fanciest production lines to still be additive change to the market. However, Korean memory firms have been terrified that reselling old equipment to China-adjacent OEMs might trigger U.S. retaliation…and so those machines have been sitting idle in warehouses since early spring. My takeaway, this sounds like an comparably easy fix for the consumer market, if prices are somewhat guarenteed to stay mid term significantly above this years spring floor for someone to sweep up the margins and negotiate a somewhat reliable way to get the last gen production lines up and running again. Will take at least half a year to pick up, but this is not a longterm RAM doomsday scenario in any sense. I'm more worried about the low to mid-end embedded systems, that a have a dollar budget for memory components, that could get unbearably slow for the current/next gen if manufactures just use the bare minimum of RAM the bloated TV or tablet OS can run on, if the 1GB raspberry move is any indication of that. And consumers stuck with no way to upgrade them to a reasonably usable state.
- adgjlsfhk1 11mo agoOne of the big problems here is that all of the hardware companies have been burned by hype before (e.g. crypto). No one actually believes that these AI companies will still be around in 5 years so spending billions to build factories for them doesn't make sense.
- lukeschlather 11mo agoI don't know what companies will be around 5 years from now, but I would bet there will be more demand for RAM and the price per GB will be at least what it was before this price shock.
- christophilus 11mo agoRAM is a very cyclical market, historically. You can look at $MU historical charts and kind of see that it trades like a cyclical (compare it to $RIO, for example). Cyclical companies are easily burned by investing in infrastructure right at the peak. It happens all the time with little mining companies, and I think DRAM manufacturers are sort of the mining companies of tech.
- OldGreenYodaGPT 11mo agoMore anti sam anti AI propaganda, nothing dirty about this deal
- hodgehog11 11mo agoAs an AI researcher, I thought it was relatively well established (at least among my colleagues) that being pro-AI actually meant you were anti-Sam as well. He's the worst actor in the industry and has done an incredible amount of damage to its brand.
- RGamma 11mo agoCare to elaborate on this?
- UncleOxidant 11mo agoAltman was already unpopular. After this will he be able to show his face in Silicon Valley?
- sega_sai 11mo agoI don't think Ellison is popular, but he seems to be doing fine with all his billions.
- yesimahuman 11mo agoAnd all these data centers they want to build around the country. When consumers can’t get devices they want maybe they’ll fight even harder against these data centers being built in their back yard. He’s not making any fans with this move that’s for sure
- roadbuster 11mo ago> To be clear - the shock wasn’t that OpenAI made a big deal, no, it was that they made two massive deals this big, at the same time, with Samsung and SK Hynix simultaneously That's not "dirty." That's hiding your intentions from suppliers so they don't crank prices before you walk through their front door. If you want to buy a cake, never let the baker know it's for a wedding.
- hamandcheese 11mo agoThat's not the dirty part. This is the dirty part: > OpenAI isn’t even bothering to buy finished memory modules! No, their deals are unprecedentedly only for raw wafers — uncut, unfinished, and not even allocated to a specific DRAM standard yet. It’s not even clear if they have decided yet on how or when they will finish them into RAM sticks or HBM! Right now it seems like these wafers will just be stockpiled in warehouses
- roadbuster 11mo ago> OpenAI isn’t even bothering to buy finished memory modules And? Why should they be obligated to pay for all the middleman steps from fab down to module? That includes: wafer-level test, module-level test (DC, AC, parametric), packaging, post-packaging test, and module fabrication. There's nothing illegal or sketchy about saying, "give me the wafers, I'll take care of everything else myself." > not even allocated to a specific DRAM standard yet DRAM manufacturers design and fabricate chips to sell into a standardized, commodity market. There's no secret evolutionary step which occurs after the wafers are etched which turns chips into something which adheres to DDR4,5,6,7,8,9 > It’s not even clear if they have decided yet on how or when they will finish them into RAM sticks or HBM Who cares?
- hamandcheese 11mo agoThe implication here is that the primary goal is to corner the market, not to use the supply. If you aren't going to use them anyways then of course it is silly to pay for them to be finished. Do you think that's fine, or do you think that implication is wrong and OpenAI does actually plan to deploy 40% of the world's DRAM supply?
- nextworddev 11mo agoalmost feel like OpenAI's recent "fall" is a decoy setup by them intentionally.. something's cooking.. maybe they wanted to buy back their own shares at a lower price?
- theturtle 11mo ago[dead]
- ok123456 11mo agoForce a divestiture of Microsoft.
- s5300 11mo ago[dead]
- Simboo 11mo agoI can’t help but wonder if their product orchestrated this deal.
- walterbell 11mo agoDaniel Suarez's 2011 Daemon.
- jascha_eng 11mo agoI'm curious how OpenAI has the funds to pay for 40% of the worlds ram production? Sure they are big and have a few billions but I kind of assumed that 40% for a year or whatever they are buying is easily double digit billions? That has to hurt even them, especially because they cant buy anything else? Also what are these contracts? Surely Samsung could decide to cancel the contract by paying a large fee but is that fee truly so large that getting their ram back when prices are now 4x of what they used to be is not worth it?
- jascha_eng 11mo agoI found this which claims ram market in 2024 was almost 100 billion: https://www.grandviewresearch.com/industry-analysis/random-access-memory-market-report https://www.grandviewresearch.com/industry-analysis/random-a... I assume this includes more than just the raw price of modules but Openai only has 60 billion in funding altogether and was aiming for 20 billion ARR this year. This sounds like they are spending maybe half their money on RAM they never use? That just doesn't add up.
- drtgh 11mo agoPonzi scheme [1] , Anticompetitive hoarding [2] , Cornering the market, Raising rivals' costs (RRC), Consumer welfare harm, and so on [1] https://en.wikipedia.org/wiki/Ponzi_scheme https://en.wikipedia.org/wiki/Ponzi_scheme [2] https://en.wikipedia.org/wiki/Hoarding_(economics) https://en.wikipedia.org/wiki/Hoarding_(economics) I think the event is big enough to stop them and send them behind bars. > Samsung I think that Samsung -and other manufacturers- have been intentionally limiting their production capacities so as not to devalue the prices of their chips (for SSD at least) so may be they are an interested part. This, combined with the madness we are seeing, is abuse^2 . I think they should also end up behind bars.
- rednafi 11mo agoThe biggest question is, can they even pay for half of the deals they have been making?
- deleted 11mo ago[deleted]
- bluedino 11mo agoImagine the outrage if OpenAI built their own fab or memory factory. Like back when Henry Ford built his own steel foundry.
- christophilus 11mo agoI fail to see why that would be outrageous.
- shash 11mo agoThat would make sense _except_ the amount of time and specialized knowledge it takes to build one. Easier by _far_ to go deal with TSMC and Samsung
- jimmydoe 11mo agonice 5d chess move, saltman paobably got this idea from GPT 4.5 high thinking
- dehrmann 11mo agoGuess OpenAI finally found a business model that works: memory futures.
- theendisney 11mo agoWhy would one sell something cheaper than the current market value? I wouldnt care if i had stock or not, prices should be what things cost.
- bigwheels 11mo agoWhen someone buys up all the supply, the price will rise because of supply and demand. It's the nature of markets. TFA mentions that if Samsung and SK Hynix had known what shenanigans were underway, they would have pursued better pricing terms.
- theendisney 11mo agoI mean, say you have something in stock that others sell for twice as much as last week and it will cost you twice as much to restock, why would you sell it for last weeks prices? Why would it matter if you have anything in stock or not? What does it matter what you've paid for it? If it will be hard to restock and ill most likely will have to sell "no" ill be even more motivated to ask more for it.
- jgalt212 11mo ago> On October 1st OpenAI signed two simultaneous deals with Samsung and SK Hynix for 40% of the worlds DRAM supply. The market doesn't believe they can pay for the Oracle cloud deal. Why do these vendors believe OpenAI can pay for 40% of the world's DRAM?
- nofriend 11mo agoThey definitely can, as anybody could, for a short enough period of time. The only ones betting they'll be able to sustain it for a long period are the ones paying the currently very inflated price for ram.
- jgalt212 11mo ago> for a short enough period of time but it's not a short term deal. funny enough, there's a cohort of bonds that never even made one payment. They are called first payment default bonds. There is a cheekier nickname for them, but it escapes me at the moment.
- mjevans 11mo agoSuckers Buckers seems safe enough for work to say on a text only Internet thread. Just don't read it aloud.
- wmf 11mo agoIronically this deal has increased DRAM prices so much that if OpenAI doesn't pay, Samsung/Hynix can make more money selling on the open market.
- jgalt212 11mo agounless everyone else walks when they sense the "big buyer" has reneged.
- pixelpoet 11mo agoI like how one of the reference links betrays how the article itself was researched, possibly written; HN hides the end of the url, which is "utm_source=chatgpt.com": > https://www.economist.com/business/2025/11/19/cracks-are-appearing-in-openais-dominant-facade?utm_source=chatgpt.com https://www.economist.com/business/2025/11/19/cracks-are-app... You have to appreciate the irony :)
- NathanielK 11mo agoThe real disappointment is none of the sources are linked in the text. Instead, it's just random underlined words, the classic chatgpt over formatting with lots of extra underlining and bolding. I appreciate that a 10-15 minute long article summarizes a 25 minute video, but it's hard to hide the real author. Quite lazily done and just not pleasant to read.
- potamic 11mo agoWould it be as ironic if one wrote an article about Google and used Google search to research their sources?
- pixelpoet 11mo agoIf the article were about Google ruining everything, yes.
- zerosizedweasle 11mo agoNo because google can both ruin things and be a tool that is helpful in certain circumstances
- oasisbob 11mo agoQuality of the writing and thought also reveals the construction method.
- outside1234 11mo agoCan OpenAI hurry up and go bankrupt?
- c-hendricks 11mo agoAn American company, combined with American tariffs, and fear of American retaliation. Getting pretty tired of that place tbh.
- draw_down 11mo ago[dead]
- walterbell 11mo agohttps://www.trendforce.com/news/2025/12/05/exclusive-memory-crunch-hits-pcs-dell-hikes-prices-15-20-mid-december-lenovo-from-january-2026/ https://www.trendforce.com/news/2025/12/05/exclusive-memory-... > Lenovo has begun notifying clients of coming price hikes, with adjustments set to take effect in early 2026.. Dell is expected to raise prices by at least 15-20%, with the increase potentially taking effect as soon as mid-December.. Dell COO Jeff Clarke warned that he’s “never seen memory-chip costs rise this fast,” .. Lenovo [cited] two key factors: an intensifying memory shortage and the rapid integration of AI technologies.. TrendForce has downgraded its 2026 notebook shipment forecast from an initial 1.7% YoY growth to a 2.4% YoY decline. Matt Levine, https://www.bloomberg.com/opinion/newsletters/2025-12-01/openai-will-own-some-users https://www.bloomberg.com/opinion/newsletters/2025-12-01/ope... | https://archive.is/S3MPq https://archive.is/S3MPq > your business model might end up being sort of a … startup incubator or private equity firm; you’d spend your time starting or acquiring companies on which the robot could work its magic. Your business model would be “general business, but with AI.” .. OpenAI has a $500 billion valuation largely as a bet that a lot of the value of AI will accrue to its builders, but it could hedge that bet by owning the users too. Either it will sell AI at high margins to lots of businesses, or it will sell AI at lower margins to lucrative businesses that it owns.
- gizmodo59 11mo agoWith the amount of hatred for anything OpenAI it’s not surprising the author chose a clickbaity title. HNs quality of posts are going down and instead of objective analysis I often see very polarized and flamy articles, titles etc.
- tyleo 11mo agoThat’s funny, I found the post high quality and interesting despite agreeing with your point about the title.
- christophilus 11mo agoI’ve been on this site a while, and it has always been like this.
- NewsaHackO 11mo agoIt to the point that bloggers know they can say things like "OpenAI did 9/11!", provide no sources, and it still will make the front page and have a large increase in traffic to there site.
- kiratp 11mo agoThis is missing a key part of the picture - Nvidia just announced that partners will need to source RAM themselves. OpenAI is basically ensuring that they can actually get the chips they need for the DCs they are building. I can’t guess as to what move came first (Nvidia policy change or these DRAM deals) but I would bet this is a large if not larger factor here than “bloc my competitors.
- ares623 11mo agoCan OpenAI use their stockpile as leverage? e.g. threaten to sell their stockpile to a market that's about to stabilize to crash prices. And are Samsung, etc. happy for this state of affairs to keep their prices elevated but not seem like the bad guy.
- overfeed 11mo agoI bet RAM is a great carrot to dangle when negotiating first-party GPU allocations with Nvidia and AMD
- windex 11mo agoWhat happens to enterprise apps like SAP and S4 on the cloud that swallow huge amounts of RAM for their in-memory database? AWS, GCP, and Azure must be running around? With their predatory pricing customers were already hesitant about upgrades, it now gets more difficult. Extend EOL for ECC?
- m0llusk 11mo agoStrange how LLM vendors are flooding the market with reasons not to do business with them. Every paid agentic interaction contributes to all the bad behavior we are seeing. From out of control web scraping to buying up available hardware LLMs are turning out to be highly efficient misery manufacturing mechanisms.
- pyb 11mo agoIf it's confirmed that Altman's played the Koreans against each other, it's going to cause a furore in Korea.
- rcarmo 11mo agoI see no real evidence of any of the claims in this article. Why is it garnering so much attention?
- saghm 11mo agoRAM being super expensive right now is a hot topic, and I imagine people are curious about why, so anything that purports to explain that is somewhat likely to at least get a cursory look from people. Without taking a stance on either whether this is happening here, if enough people look at something and happen to think it makes sense, a lack of evidence might not be enough to prevent the narrative from taking over; otherwise, we'd never have issues with people believing false things in the first place, and that happens all the time.
- byyoung3 11mo agoIs it possible that GPT-6 could possibly be highly reliant on RAM? For example running smaller long context models on the CPU? Just a thought, I could be far off.
- djdjsjejb 11mo agoits criminal to underline non links in ur site come on
- user____name 11mo agoI didn't keep up with the news lately and had to pay 650 bucks for two 32GB DRAM5 sticks for my new build. Yay.