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> Why do we think it will be different now? Margins. AI usage can pay a lot more. Even if they sell less than can still be more profitable. In the past there
by re-thc 10mo ago
> Why do we think it will be different now?
Margins. AI usage can pay a lot more. Even if they sell less than can still be more profitable.
In the past there wasn’t a high margin usage. Servers didn’t charge such a high premium.
- zozbot234 10mo agoHigh margins are exactly what should create a strong incentive to build more capacity. But that dynamic has been tamped down so far because we're all scared of a possible AI bubble that might pop at any moment.
- seanmcdirmid 10mo agoDo you not think that some DRAM producer isn't going to see the high margins as a signal to create more capacity to get ahead of the other DRAM producers? This is how it always has worked before, but somehow it is different this time?
- re-thc 10mo ago> Do you not think that some DRAM producer isn't going to see the high margins as a signal to create more capacity to get ahead of the other DRAM producers? They took the bite during COVID and failed, so there's still fear from over supply.
- seanmcdirmid 10mo agoIt only works if they collude on keeping supply steady. If anyone gets greedy for a bigger share of the AI pie, then it implodes quickly. Not all DRAM is made in South Korea so some nationalism will muddy the waters as well.