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> RAM prices spiked speculatively Didn't OpenAI buy up 40% of the capacity all at once?

by cma 7mo ago

ajross 7mo ago
No, they signed a bunch of contracts for future deliveries. That's not a supply constraint. The factories making RAM continued operating and serving their existing deliveries, and in fact they still are. Freshman economics would say that supply is fine and that prices shouldn't move. But they did anyway. And the reason is speculation.
- drakythe 7mo ago
  The economy is vibe coded at this point. Have we gotten anymore word on the potential Helium constraints that SK Hynix was making noise about after the strike on the helium plant in the Middle East that suppplied 60% of S. Korea's Helium? Because that could definitely put a kink in things, since SKH is one of the 3 remaining big DRAM producers.
- leoc 7mo ago
  I don't get it tbh. What market participants were speculating here? There aren't futures markets in RAM as far I know, though I certainly don't know much. And the supply constraints appear to have been pretty real (though maybe not immediate) if eg. Valve was begging publicly for RAM consignments. Were there pure-play speculators filling warehouses with DDR5?
  - notatoad 7mo ago
    >There aren't futures markets in RAM as far I know sure there is. not formally, but if you hold a contract for x units of future production, you can sell that contract to somebody else who wants those units more than you do.
    - irke 7mo ago
      That’s a forward contract yeah. They def do exist. Futures are standardised forward contracts traded on exchanges
- cma 7mo ago
  According to this he ordered them uncut and unfinished and may just warehouse until needed: https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram-deal https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram... Its still speculative that OpenAI won't go bankrupt and have to free it back to the market, but if it is holding them unfinished it is a supply constraint on finished RAM chips even if not on wafer output.

> RAM prices spiked speculatively Didn't OpenAI buy up 40% of the capacity all at once?

by cma 7mo ago

> RAM prices spiked speculatively Didn't OpenAI buy up 40% of the capacity all at once?

No, they signed a bunch of contracts for future deliveries. That's not a supply constraint. The factories making RAM continued operating and serving their existing deliveries, and in fact they still are. Freshman economics would say that supply is fine and that prices shouldn't move. But they did anyway. And the reason is speculation.

drakythe 7mo ago
The economy is vibe coded at this point. Have we gotten anymore word on the potential Helium constraints that SK Hynix was making noise about after the strike on the helium plant in the Middle East that suppplied 60% of S. Korea's Helium? Because that could definitely put a kink in things, since SKH is one of the 3 remaining big DRAM producers.
leoc 7mo ago
I don't get it tbh. What market participants were speculating here? There aren't futures markets in RAM as far I know, though I certainly don't know much. And the supply constraints appear to have been pretty real (though maybe not immediate) if eg. Valve was begging publicly for RAM consignments. Were there pure-play speculators filling warehouses with DDR5?
- notatoad 7mo ago
  >There aren't futures markets in RAM as far I know sure there is. not formally, but if you hold a contract for x units of future production, you can sell that contract to somebody else who wants those units more than you do.
  - irke 7mo ago
    That’s a forward contract yeah. They def do exist. Futures are standardised forward contracts traded on exchanges
cma 7mo ago
According to this he ordered them uncut and unfinished and may just warehouse until needed: https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram-deal https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram... Its still speculative that OpenAI won't go bankrupt and have to free it back to the market, but if it is holding them unfinished it is a supply constraint on finished RAM chips even if not on wafer output.