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> It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax. DRAM is priced based on supply and demand, like

> It's that AI companies are vacuuming up every DRAM chip on the planet and the rest of us get to pay the tax. DRAM is priced based on supply and demand, like every other market. When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere. > That's not normal market dynamics. This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly. I do find it interesting that so many people think “market rate” means the opposite of what economics teaches, and that prices should stay stable and not change much when the economic conditions change. I also find it interesting to read all of the “we shouldn’t let them…” takes in response to this situation. The DRAM market is international. Trying to restrict it in one country would just see the data centers get built in another country.

bparsons 9mo ago
Most markets don't have three purchasers trying to corner the entire supply of one product.
- Aurornis 9mo ago
  Economic history is full of examples of demand shocks. This is not some unique situation that has never occurred before. This is actually a clean commodity price spike because it’s specifically not for market manipulation or financial engineering. It’s because demand for this product really did explode overnight.
  - fao_ 9mo ago
    > This is actually a clean commodity price spike because it’s specifically not for market manipulation or financial engineering. It’s because demand for this product really did explode overnight. Based on how the same 3 billion has been circiling between Anthropic, OpenAI, Nvidia, Google, Microsoft, Amazon, and a few other companies... I really doubt that this is the case, to be honest.
    - zerkten 9mo ago
      I think it's reasonable to distinguish which side drove this. RAM prices are going up but it's not engineered primarily by RAM manufacturers. They are naturally jumping on the bandwagon and responding, but they aren't the drivers. Of course, how they respond matters. They could make other choices. Over time we'll see how this goes because AI could cool and then RAM manufacturers end up in a spot where they choose to manipulate prices to keep them higher.
  - Juliate 9mo ago
    By 3 buyers who have no known plan to finance the purchase orders they have made. Economic history is also full of examples of bubble bursts.
  - browningstreet 9mo ago
    You're being exceedingly pedantic over the use of the colloquialism "DRAM tax" but then you allow "demand shocks". So yeah, everyone's shocked. Weird hill..
    - Aurornis 9mo ago
      Demand shock is not a colloquialism. It’s an real economic term that describes the situation. https://en.wikipedia.org/wiki/Demand_shock https://en.wikipedia.org/wiki/Demand_shock Tax is also an economic term, which is not what’s happening. Calling it a “tax on consumers” doesn’t make sense because any data centers buying RAM right now are also buying from the same global market. If commenters just want to be outraged and throw words around then use whatever words you want, I suppose.
  - throwaway5465 9mo ago
    It is manipulation when wafers are purchased in order to not process further a la OpenAI.
- Scoundreller 9mo ago
  I guess we’d call this oligopsony? The monopsony (single buyer of a good) equivalent of an oligopoly? Phew, it is a word, but not a highly studied one! https://en.wikipedia.org/wiki/Oligopsony https://en.wikipedia.org/wiki/Oligopsony
dev_l1x_be 9mo ago
Factory capacity does not follow market dynamics easily
- ambicapter 9mo ago
  I think the usefulness of market dynamics is their ability to follow things like factory capacity, which are themselves hard to follow, not the other way around.
  - polypphonics 9mo ago
    For things that aren't inherently limited in production it is supposed to work both ways.. A key element is that China still acts as a block.. So Chinese firms have lost a big opportunity by not making DDR4 yet aren't ready with DDR5. When they are ready it will probably tank the market which is less profitable than selling at high prices with actual availability of something the whole time.
avemuri 9mo ago
Can't agree more. We can also predict with some confidence that in a year or two, supply would have adjusted and ram will be cheaper in the long run. We benefit from the expanded demand even if the fact that it first lands as a shock is disruptive to prices.
- account42 9mo ago
  If the last five or so years are to go by, we'll just have another pricing shock by then. So yay.
- doom2 9mo ago
  GPU prices went through the roof for crypto and then the pandemic and never really recovered to pre-pandemic prices before once again spiking because of AI demand. So where's the increased supply of Nvidia cards to account for all the continued demand? And why haven't RAM manufacturers announced plans for increased production (instead of pulling out of the consumer market altogether)? The past 6 years of GPU pricing (the 5080 launched at $1000, currently $1500-1800 at Microcenter) don't exactly fill me with confidence that RAM manufacturers will increase supply to meet demand and bring down prices again.
moduspol 9mo ago
> Trying to restrict it in one country would just see the data centers get built in another country. I'm surprised this isn't already what's being done. Inference doesn't require super low latency with the client, and the population's support of AI (and especially data centers for it) is waning quickly. This feels like another ideal use case for outsourcing the stuff Americans don't want to see to somewhere that it'll be someone else's problem.
- Betelbuddy 9mo ago
  > Trying to restrict it in one country would just see the data centers get built in another country. Sounds like not stressing the electricity infrastructure in Spain, to run inference for Facebook North American posts, should be seen as a positive...
Betelbuddy 9mo ago
Saying this is just the market...is like saying housing is a free market after hedge funds buy your entire neighborhood...
- anthonypasq 9mo ago
  correct, both of those things are examples of free markets
  - Betelbuddy 9mo ago
    Adam Smith had already clarified free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities. You are confusing market outcome with market structure.
    - Xunjin 9mo ago
      Good point, however we can't miss the history which shows that free market are not achievable, in some fields of economic is seen as "fairy tale".
      - Betelbuddy 9mo ago
        Even dumb Greenspan already knew we dont want unregulated..."free" markets: https://youtu.be/AWM0l8_F_X0?t=412 https://youtu.be/AWM0l8_F_X0?t=412
    - Aurornis 9mo ago
      But where is the monopoly here? Nobody has a monopoly on housing supply or DRAM production. Nobody is making an artificial scarcity. They’re producing as much as they can. You can buy the exact same DRAM that the data centers are bidding on.
      - blactuary 9mo ago
        There is absolutely artificial scarcity in the housing market, it is one of the biggest problems we face as a country
StopDisinfo910 9mo ago
> When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere. > This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly. You act like it's a competitive market. It's not the case. It's an oligopoly with an extremely inelastic supply side. The market is already completely broken and ineffective due to concentration and export controls. The actual response to a major demand shock should be investments to increase capacities but it's currently extremely limited because suppliers want to protect their margins and fear the market contracting again.
- deleted 9mo ago
  [deleted]
hansmayer 9mo ago
> DRAM is priced based on supply and demand, like every other market. Please don't explain it away like that - you are referring to the theoretical "ideal" market where a bunch of small companies compete with low margins to the benefit of the wider customer base. This is not what is happening. We have a couple of intrinsically worthless, LLM-whale companies, working literally to swallow and entshittify literally everything in their weird transhumanist/accelerationist/weirdo way. To add to the insult, the whole creation of artificial scarcity is almost a political construct, paid for with "monopoly-the-game-money" that these companies DO NOT EARN but instead BORROW based on vague and dishonest promises of achieving a "Country of PhDs in a datacenter"/"Pocket PhDs"/"AGI by 2025" (oops, now apparently by 2028 according to the OpenAI CEO). In their weird vision, as humans we should be merely cattle to be managed, not independent spirits with interest and aspirations. That ghoul Karpathy speaks about "ghost in the machine", overlooking the magnificence of the already existing "ghost in the machine" in the form of human beings. We should not have to swallow the increasingly crappier future these folks are insisting on pushing on all of us.
BunsanSpace 9mo ago
> This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly. The problem is that demand is being propped up by speculative capital. The AI companies are a bubble that is suffocating productive parts of the market with the hording of capital which they're now using to also hoard hardware. All this without making money for data centres that aren't build yet, for a handwavy promise that an AGI will magically solve all the worlds problems. This is not normal, and it is not good for the broader economy.
- inigyou 9mo ago
  [dead]
- chneu 9mo ago
  Yeah the dudes argument is bunk when we remember that openAI bought CAPACITY and not actual product. The market is also heavily manipulated by the big 3 players in the market. OpenAI brazenly used their market position to create artificial scarcity. That's not normal market behavior. That's manipulation. And now we all suffer.
fmbb 9mo ago
AI demand is subsidized by the bubble. Those operators buying the RAM are not paying using money that exists. Market economics are not working here.
Etherlord87 9mo ago
"it happened therefore it's normal"
lenkite 9mo ago
> It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere. Curious on whether you will still hold your stance if OpenAI gets a taxpayer bailout. Even disregarding a bailout, they are already lobbying hard for tax credit expansion.
- jaredklewis 9mo ago
  A government bailout of OpenAI would be a regressive redistribution of wealth to some of the least needy people in all of society, which is a horrendously poor use of government funds. But that has no bearing on the fact that calling high DRAM prices induced by high demand a “tax” stretches the meaning of the word beyond all recognition. There are many horrible things in the world and we don’t need to label them all as a “tax.” If we use words in an imprecise way, it obfuscates the truth.
  - lenkite 9mo ago
    Please note that OpenAI Partners and suppliers (Oracle, CoreWeave, SoftBank-linked entities) have taken on significant debt to fund infrastructure for OpenAI - around ~$100 billion reported in late 2025 alone. Projections show $14-20 billion in losses for OpenAI expected just in 2026. The chances that someone is not going to ask for a debt write-off approaches zero as the years go. OpenAI already began testing the waters since late last year. Senator Warren has already raised alarms about potential indirect taxpayer exposure when the "AI bubble" bursts. When that happens - and it is all but guaranteed to happen - it will amount to a horrendous tax, rendering everything you’ve said about 'imprecise words obfuscating the truth' complete hogwash.
cyanydeez 9mo ago
In many countries, its illegal to manipulate prices in bulk.
- lucianbr 9mo ago
  What makes it manipulation? If 5 companies want to buy a quadrilion ram chips to build datacenters, why is this manipulation moreso than a million companies each wanting to buy 100 ram chips? I think the problem is that both the buyers and producers are too large. Governments should not allow companies to become this big, because... <gestures broadly at everything>. If there were a thousand ram makers and a thousand datacenter builders, this particular problem would not exist. But you can't just label any price evolution you dislike as "price manipulation".
  - Roark66 9mo ago
    >What makes it manipulation? Their size and the effect on the market they have >×If 5 companies want to buy a quadrilion ram chips to build datacenters, why is this manipulation moreso than a million companies each wanting to buy 100 ram chips? Because they are 5 companies, especially when it can be shown they work in unison (formed a cartel)
  - dsr_ 9mo ago
    It's certainly price manipulation, but not likely to be intended price manipulation. Your arguments are flawed but you have reached the right conclusion. This is one of the many flaws of badly regulated markets. (There are no free markets, and there is never perfect information, and people often behave remarkably irrationally for many reasons.)
    - cyanydeez 9mo ago
      Reading through the Epstein file, it's naive to conclude that no collusion is happening. Remember when FAANG was caught red handed manipulated hiring to depress salaries? Just seems like a lot of astroturf-ish behavior ignoring real world happenings: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
nutjob2 9mo ago
The problem is that OpenAI has cornered the market. Maybe they haven't crossed the legal line or more to the point no one in this corrupt and incompetent administration is going to prosecute them, but buying up 40% of a market which hasn't got any additional capacity is cornering by any measure. So yes, this is not a normal market. Your claim of a functioning market is the same as saying my laptop, having lit on fire, is a functioning computer after having 10,000 volts applied across it.

bparsons 9mo ago

Most markets don't have three purchasers trying to corner the entire supply of one product.

Aurornis 9mo ago
Economic history is full of examples of demand shocks. This is not some unique situation that has never occurred before. This is actually a clean commodity price spike because it’s specifically not for market manipulation or financial engineering. It’s because demand for this product really did explode overnight.
- fao_ 9mo ago
  > This is actually a clean commodity price spike because it’s specifically not for market manipulation or financial engineering. It’s because demand for this product really did explode overnight. Based on how the same 3 billion has been circiling between Anthropic, OpenAI, Nvidia, Google, Microsoft, Amazon, and a few other companies... I really doubt that this is the case, to be honest.
  - zerkten 9mo ago
    I think it's reasonable to distinguish which side drove this. RAM prices are going up but it's not engineered primarily by RAM manufacturers. They are naturally jumping on the bandwagon and responding, but they aren't the drivers. Of course, how they respond matters. They could make other choices. Over time we'll see how this goes because AI could cool and then RAM manufacturers end up in a spot where they choose to manipulate prices to keep them higher.
- Juliate 9mo ago
  By 3 buyers who have no known plan to finance the purchase orders they have made. Economic history is also full of examples of bubble bursts.
- browningstreet 9mo ago
  You're being exceedingly pedantic over the use of the colloquialism "DRAM tax" but then you allow "demand shocks". So yeah, everyone's shocked. Weird hill..
  - Aurornis 9mo ago
    Demand shock is not a colloquialism. It’s an real economic term that describes the situation. https://en.wikipedia.org/wiki/Demand_shock https://en.wikipedia.org/wiki/Demand_shock Tax is also an economic term, which is not what’s happening. Calling it a “tax on consumers” doesn’t make sense because any data centers buying RAM right now are also buying from the same global market. If commenters just want to be outraged and throw words around then use whatever words you want, I suppose.
- throwaway5465 9mo ago
  It is manipulation when wafers are purchased in order to not process further a la OpenAI.
Scoundreller 9mo ago
I guess we’d call this oligopsony? The monopsony (single buyer of a good) equivalent of an oligopoly? Phew, it is a word, but not a highly studied one! https://en.wikipedia.org/wiki/Oligopsony https://en.wikipedia.org/wiki/Oligopsony

dev_l1x_be 9mo ago

Factory capacity does not follow market dynamics easily

ambicapter 9mo ago
I think the usefulness of market dynamics is their ability to follow things like factory capacity, which are themselves hard to follow, not the other way around.
- polypphonics 9mo ago
  For things that aren't inherently limited in production it is supposed to work both ways.. A key element is that China still acts as a block.. So Chinese firms have lost a big opportunity by not making DDR4 yet aren't ready with DDR5. When they are ready it will probably tank the market which is less profitable than selling at high prices with actual availability of something the whole time.

avemuri 9mo ago

Can't agree more. We can also predict with some confidence that in a year or two, supply would have adjusted and ram will be cheaper in the long run. We benefit from the expanded demand even if the fact that it first lands as a shock is disruptive to prices.

account42 9mo ago
If the last five or so years are to go by, we'll just have another pricing shock by then. So yay.
doom2 9mo ago
GPU prices went through the roof for crypto and then the pandemic and never really recovered to pre-pandemic prices before once again spiking because of AI demand. So where's the increased supply of Nvidia cards to account for all the continued demand? And why haven't RAM manufacturers announced plans for increased production (instead of pulling out of the consumer market altogether)? The past 6 years of GPU pricing (the 5080 launched at $1000, currently $1500-1800 at Microcenter) don't exactly fill me with confidence that RAM manufacturers will increase supply to meet demand and bring down prices again.

moduspol 9mo ago

> Trying to restrict it in one country would just see the data centers get built in another country. I'm surprised this isn't already what's being done. Inference doesn't require super low latency with the client, and the population's support of AI (and especially data centers for it) is waning quickly. This feels like another ideal use case for outsourcing the stuff Americans don't want to see to somewhere that it'll be someone else's problem.

Betelbuddy 9mo ago
> Trying to restrict it in one country would just see the data centers get built in another country. Sounds like not stressing the electricity infrastructure in Spain, to run inference for Facebook North American posts, should be seen as a positive...

Betelbuddy 9mo ago

Saying this is just the market...is like saying housing is a free market after hedge funds buy your entire neighborhood...

anthonypasq 9mo ago
correct, both of those things are examples of free markets
- Betelbuddy 9mo ago
  Adam Smith had already clarified free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities. You are confusing market outcome with market structure.
  - Xunjin 9mo ago
    Good point, however we can't miss the history which shows that free market are not achievable, in some fields of economic is seen as "fairy tale".
    - Betelbuddy 9mo ago
      Even dumb Greenspan already knew we dont want unregulated..."free" markets: https://youtu.be/AWM0l8_F_X0?t=412 https://youtu.be/AWM0l8_F_X0?t=412
  - Aurornis 9mo ago
    But where is the monopoly here? Nobody has a monopoly on housing supply or DRAM production. Nobody is making an artificial scarcity. They’re producing as much as they can. You can buy the exact same DRAM that the data centers are bidding on.
    - blactuary 9mo ago
      There is absolutely artificial scarcity in the housing market, it is one of the biggest problems we face as a country

StopDisinfo910 9mo ago

> When demand goes up, the price goes up for everyone. It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere. > This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly. You act like it's a competitive market. It's not the case. It's an oligopoly with an extremely inelastic supply side. The market is already completely broken and ineffective due to concentration and export controls. The actual response to a major demand shock should be investments to increase capacities but it's currently extremely limited because suppliers want to protect their margins and fear the market contracting again.

deleted 9mo ago
[deleted]

hansmayer 9mo ago

> DRAM is priced based on supply and demand, like every other market. Please don't explain it away like that - you are referring to the theoretical "ideal" market where a bunch of small companies compete with low margins to the benefit of the wider customer base. This is not what is happening. We have a couple of intrinsically worthless, LLM-whale companies, working literally to swallow and entshittify literally everything in their weird transhumanist/accelerationist/weirdo way. To add to the insult, the whole creation of artificial scarcity is almost a political construct, paid for with "monopoly-the-game-money" that these companies DO NOT EARN but instead BORROW based on vague and dishonest promises of achieving a "Country of PhDs in a datacenter"/"Pocket PhDs"/"AGI by 2025" (oops, now apparently by 2028 according to the OpenAI CEO). In their weird vision, as humans we should be merely cattle to be managed, not independent spirits with interest and aspirations. That ghoul Karpathy speaks about "ghost in the machine", overlooking the magnificence of the already existing "ghost in the machine" in the form of human beings. We should not have to swallow the increasingly crappier future these folks are insisting on pushing on all of us.

BunsanSpace 9mo ago

> This is actually a textbook example of markets functioning in response to a demand shock where supply cannot be increased rapidly. The problem is that demand is being propped up by speculative capital. The AI companies are a bubble that is suffocating productive parts of the market with the hording of capital which they're now using to also hoard hardware. All this without making money for data centres that aren't build yet, for a handwavy promise that an AGI will magically solve all the worlds problems. This is not normal, and it is not good for the broader economy.

inigyou 9mo ago
[dead]
chneu 9mo ago
Yeah the dudes argument is bunk when we remember that openAI bought CAPACITY and not actual product. The market is also heavily manipulated by the big 3 players in the market. OpenAI brazenly used their market position to create artificial scarcity. That's not normal market behavior. That's manipulation. And now we all suffer.

fmbb 9mo ago

AI demand is subsidized by the bubble. Those operators buying the RAM are not paying using money that exists. Market economics are not working here.

Etherlord87 9mo ago

"it happened therefore it's normal"

lenkite 9mo ago

> It’s not a “tax” on the rest of us in any sense. There’s just a lot of demand everywhere. Curious on whether you will still hold your stance if OpenAI gets a taxpayer bailout. Even disregarding a bailout, they are already lobbying hard for tax credit expansion.

jaredklewis 9mo ago
A government bailout of OpenAI would be a regressive redistribution of wealth to some of the least needy people in all of society, which is a horrendously poor use of government funds. But that has no bearing on the fact that calling high DRAM prices induced by high demand a “tax” stretches the meaning of the word beyond all recognition. There are many horrible things in the world and we don’t need to label them all as a “tax.” If we use words in an imprecise way, it obfuscates the truth.
- lenkite 9mo ago
  Please note that OpenAI Partners and suppliers (Oracle, CoreWeave, SoftBank-linked entities) have taken on significant debt to fund infrastructure for OpenAI - around ~$100 billion reported in late 2025 alone. Projections show $14-20 billion in losses for OpenAI expected just in 2026. The chances that someone is not going to ask for a debt write-off approaches zero as the years go. OpenAI already began testing the waters since late last year. Senator Warren has already raised alarms about potential indirect taxpayer exposure when the "AI bubble" bursts. When that happens - and it is all but guaranteed to happen - it will amount to a horrendous tax, rendering everything you’ve said about 'imprecise words obfuscating the truth' complete hogwash.

cyanydeez 9mo ago

In many countries, its illegal to manipulate prices in bulk.

lucianbr 9mo ago
What makes it manipulation? If 5 companies want to buy a quadrilion ram chips to build datacenters, why is this manipulation moreso than a million companies each wanting to buy 100 ram chips? I think the problem is that both the buyers and producers are too large. Governments should not allow companies to become this big, because... <gestures broadly at everything>. If there were a thousand ram makers and a thousand datacenter builders, this particular problem would not exist. But you can't just label any price evolution you dislike as "price manipulation".
- Roark66 9mo ago
  >What makes it manipulation? Their size and the effect on the market they have >×If 5 companies want to buy a quadrilion ram chips to build datacenters, why is this manipulation moreso than a million companies each wanting to buy 100 ram chips? Because they are 5 companies, especially when it can be shown they work in unison (formed a cartel)
- dsr_ 9mo ago
  It's certainly price manipulation, but not likely to be intended price manipulation. Your arguments are flawed but you have reached the right conclusion. This is one of the many flaws of badly regulated markets. (There are no free markets, and there is never perfect information, and people often behave remarkably irrationally for many reasons.)
  - cyanydeez 9mo ago
    Reading through the Epstein file, it's naive to conclude that no collusion is happening. Remember when FAANG was caught red handed manipulated hiring to depress salaries? Just seems like a lot of astroturf-ish behavior ignoring real world happenings: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

nutjob2 9mo ago

The problem is that OpenAI has cornered the market. Maybe they haven't crossed the legal line or more to the point no one in this corrupt and incompetent administration is going to prosecute them, but buying up 40% of a market which hasn't got any additional capacity is cornering by any measure. So yes, this is not a normal market. Your claim of a functioning market is the same as saying my laptop, having lit on fire, is a functioning computer after having 10,000 volts applied across it.