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".
Perhaps you haven't noticed but the pendulum has been swinging the other way for a while already and has a lot of momentum behind it. It's mentioned off-hand because the ongoing return to a multi-polar global order is covered elsewhere already, across dozens of articles every day.
Does it? It's mostly the US pushing against globalism right now. Trump managed to unite almost the entire world.
Admittedly, Europe was being slow to reconfigure until finally forced to do so this year but they've jumped on board now too.
And in typical historical fashion, everybody with less little influence/independence to project their own sphere are now cautiously but attentively jockeying to accumulate the best deals they can gather among those they do.
The world is far from united, even if many do happen to share opinion about the administration.
Left-wingers are only globalist in the most literal sense of "well, I'd like it if we got rid of these migration barriers". "Internationalist" would be a better term for them.
Globalist Nationalism is an ideology of contradictions. It purports that, no really, you're the real master race and everyone else's just a stooge that'll get taken out the moment we can get rid of these pesky liberals with their freedoms. They need shittons of spatial partitioning to make that work.
This is completely wrong. China and Russia are very much working against it.
The global market is anarchy in the literal sense and no one is bound by a higher authority. Coercion and cartels are part of a free market.
Economic efficiency actually requires a lot of rules and regulations to achieve the free market playground we like to imagine.
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…).
Is the goal also to hurt South Korean businesses and all businesses in the world, just to "pwn China" basically?
There is always a ton of risk involved with protectionism. Primarily whether your taxpayer-subsidized domestic jobs and hypothetical national security risk significantly outweighs all the very real economic costs.
I'd love to hear your examples of this happening. For $22K you can get a BYD Dolphin Surf in Europe. And that's a pretty small car. What are you paying $60K for in the US that's the same size?
Maybe let's try a different match up. The BYD Atto 3 seems to start around 40K in Europe. It's smaller than a Model Y, and people say it is slightly lower in market position, but close enough. The Model Y starts at around 40K as well.
Are the comparisons between expensive US cars (remember the average is just above 50K, and plenty of perfectly good cars like a Honda Civic can be had for half that) and Chinese cars in China?
So it's really just tariffs and taxes making it that expensive elsewhere.
I'm not saying it justifies the price difference, but there are changes between the cars.
To be fair, @dmix explicitly mentioned the $20k price was for other countries
Trump's America First in practice relies on a near-sided and overly simplistic understanding of the world (Win-lose, whatever is benefitting others must be a hinderance to the USA). Hence fighting the tariff wars against allies (Canada, Eu). Hence destroying Nato' credibility that was carefully built for 70 years. Hence ceasing to be Ukraine's ally (but continuing to be a trade partner, that sells weapons as long as Europe is paying). Hence helping Putin. Hence instigating problems with Taiwan if that means that TSMC will move some manufacturing to the USA.
It's a really miopic view, but at least on their part the behavior is intentional (consequences, on the other hand, are surprise for them).
For the most part, free and open trade is beneficial to the Western world order. But I think it's quite straightforward to imagine conditions under which it is not, many of which are currently in effect.
US control of EUV technology is probably the most obvious present one, but limitations on nuclear proliferation are an obvious case where there is no free market. Even selling civilian nuclear technology is controlled.
You may think of it analogously to Free Speech. The dream is complete and total expression. The reality is that if you allow convincing enough liars, your society starts to falter. Consequently, certain kinds of expression are not permitted - notably defamation. Think of it as more a North Star navigation ideal constrained by the trade winds (I suppose the Westerlies would be more relevant, but I couldn't resist the pun).
If you want a couple of reads, I enjoyed A Splendid Exchange about the history of trade, which I followed by the resurgent-though-once-dismissed Zeihan's Disunited Nations (which is more a hypothesis book than a history book).
All industrialized countries participate in large-scale state industrial policy. It's a pre-condition of industrialization. A nation cannot industrialize without large scale state policy. And once industrialized, all nations maintain large-scale state industrial policy. Are you saying there never has or can be a "free and global" market? Or just when china does it?
> You may think of it analogously to Free Speech.
It's nothing like free speech as free speech is a constitutional right granted within a nation.
> The reality is that if you allow convincing enough liars, your society starts to falter.
That's rich coming from someone peddling zeihan. I've always wondered what kind of morons actually believe his nonsense. Now I know.
What? From funding the Lewis&Clark missions, to forcing japan open, to clearing out the natives for railroad companies, to helping found colleges ( check out many engineering/tech focused colleges like MIT was founded in the 1800s ). You can even argue that american independence and the civil wars were about expanding state industrial policy.
> The federal government was quite weak in the 19th century
So "weak" that we went from 13 small states on the east coast and expanded 3000 miles all the way to the pacific? What the hell are you talking about?
> I can't think of any explicit policies it established that were intended to foster industrial capacity.
The US became the dominant industrial power in the 1800s and you can't think of any policies that helped? You think all the territories in the ohio valley, texas, oklahoma, california, etc chock full of oil were just given to americans by overly generous natives, brits or mexicans? Are you a moron?
If the US didn't have state industrial policy, the US would have never become and industrial power. We'd have just gone down the jeffersonian agrarian paradise road.
did AI write this?
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" ...
I paid almost every month since gpt4 came out but mine lapsed when Gemini was released and I haven't even thought of logging in.
The subscribers are exactly the users who would migrate to Gemini. Then your left with the prospect of this giant free chatgpt user base setting money fire.
Wouldn't be shocking at all looking back 10 years from now that maybe the path that Altman stays fired would have been the better path.
Should be, as in, new legislation should criminalize it? What's the generalized principle? Or should be, as in existing law should cover it? And if so, what law / how?
The way it works is that OpenAI will have the DRAM delivered to Nvidia/AMD/Broadcom to be assembled into the racks that OpenAI buys.
This is an incorrect and incredibly out of touch comment fragment. Computer part derivatives are an essential item to economic activity in most countries.
The world runs on computers. It is as essential as oil for the functioning of societies. Increase in silicon costs is going to increase costs unilaterally across the board. It happened during the pandemic and something similar will happen now. If anything it should be a wake up call to countries to start thinking about securing their own supply chains.
Interesting in that I thought about their purchase of $1B of solid state memory at the height of their iPod run. The difference is that Apple had a hit product that was selling as quickly as they could be produced and there was a legitimate need if they wanted to meet the demand.
FTFA:
> 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!
I don't consider this legitimate. It's not illegal, but it sure seems unethical and scummy and it pissed me off. OpenAI throwing its weight around is harming ordinary people who aren't competing with them.
There is nothing here worth invoking the legal system over. OpenAI can buy huge amounts of RAM if they want. Good luck to them, hope it works out, looks like an expensive and risky manoeuvre. And we're probably going to have a RAM glut in a few years looking at these prices.
There is a certain level of crazy that crowds can find when people identify something as a fundamental industrial product critical to national security and simultaneously someone is calling for companies buying a lot of it [0] to be made illegal. If something is critically important to industry then companies should be encouraged to dump as much money as they like in the sector. Otherwise industry will suffer.
[0] And OpenAI is probably going to turn out to be closely associated with US national security too.
It is the malicious purpose and the clear harm to most of America that ought to provide motivation to enforce any law this is at odds with.
Pretending computing is a luxury in 2025 is nonsense as is ignoring the obviously manipulative purpose that is so clear.
Um... What?
Pretty much every adult owns one or more items with DRAM chips in them and depends on businesses that use even more.
The supply crunch will effect a surprising spread of the economy given how ubiquitous computers are now.
Looking at delivery dates, the dram price blip could last over a year and the price blips further down could last even longer.
Memory is everywhere. In computer, phones, fridges, TVs, cameras, toys, watches, all kinds of home and industrial appliances.
If the OpenAI-induced supply crunch causes the AI bubble to burst, I may drop dead from irony-poisoning.
Do you have a citation for what law is being violated? Or just vibes?
Obviously kind of a moot point because whether it violates antitrust law or not, what is guaranteed is the US Government is not going to do anything
There are similar laws prohibiting the manipulation of commodity markets but I do not believe a US court would find RAM to be a commodity.
There's also the question of if OpenAI operated In good Faith (from a search: "Another sign of bad faith is withholding crucial information..."), and- of course- the South Korean government can step in as well. In fact- as a worldwide issue- any sufficiently large State(or group of States) can take issue with it.
OpenAI will have issues if they find themselves unable to buy power equipment (Schnider, Eaton). Or, perhaps anybody associated with OpenAI management or funding is arrested the second they step foot in Europe. This is already a nightmare of an International Incident.
It even seems to skirt around notions of illegal vertical integration. For example in this address from 1998, a former FTC commissioner describes several types of illegal "vertical alliances", all of which rely on both the upstream supplier and the downstream consumer being aligned in anticompetitive intent, which (if the article is to be believed) they couldn't have been here because there are two suppliers who were unaware of each other's deals.
Is it really not illegal to just buy up a huge chunk of a critical input for an industry and stockpile it for the purpose of locking out competitors? Seems hard to imagine that some robber baron of the 19th century didn't already do this.
From the article
> 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 – like a kid who hides the toybox because they’re afraid nobody wants to play with them, and thus selfishly feels nobody but them should get the toys!
I guess we'll have to see if they in fact just keep "unfinished" RAM in warehouses like the article says and not roll them out into datacenters for a legitimate use as they are finished.
for what? unimportant
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...
That is not "totally normal".
Nevertheless, unless you’re not storing them in a clean room of appropriate class (or in a vacuum pack), assume 18 months for undiced wafers.
In terms of size, I would think that stored in cassettes or carriers a vacuum sealed, it shouldn’t be too much. A 25 wafer pack is about half meter cube? A 40ft shipping container is about 68m^3. So one container can store about 140 packs of 25 wafers each. That’s 3500 wafers. They’re talking about 900k wafers. That’s about 260 containers. Call it 300 with extra space and stuff. Not exactly hard to provision.
I mean with that many wafers, I guess it is possible that they’d be doing something pretty custom with the things…
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.
They have no incentive to purchase a rapidly-depreciating asset and then immediately shelve it, none
They might have to warehouse inventory until they can spin-up module-manufacturing capacity, but that's just getting their ducks in a row
I'm not saying it's true, but it is suspicious at the very least. The RAM is unusable as it stands, it's just raw wafer, they'd need a semiconductor fab + PCB assembly to turn them into usable RAM modules. Why does OpenAI want to become a RAM manufacturer, but of only the process post-wafer.
The wafers are processed. That means Samsung/Hynix have taken the raw ("blank") wafers, then run them through their DRAM lithography process, etching hundreds of DRAM dies ("chips") onto the wafer.
You could attach test probes to individual chips on the wafer and you'd have a working DRAM chip. In fact, that's how testing is performed: you connect to each die one at a time with a "probe card" which supplies power & ground, plus an electrical interface for functional testing.
If OpenAI takes possession of the processed wafers and wants finished RAM modules, they need to do a few things: test each die (expensive), saw the wafer into individual chips (cheap), package them (moderately expensive), test them again (medium expense), and then assemble the final module (inexpensive). Modern semiconductor test facilities cost billions of dollars and take years to build, so they'd need to immediately outsource that work (typically done in Southeast Asia)
OpenAI likely doesn't want to do any of this. They probably just want to make sure they're in control of their own destiny with regard to DRAM, then decided the best place to accomplish that was by cutting deals directly with the DRAM semiconductor producers. This will allow them to take the wafers to the existing supply chain, then contract them to turn the wafers into finished modules.
It screws up the price for their competitors. That's an incentive. Particularly with so many "AI datacenter" buildouts on the horizon.
> 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
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?
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?
You have no evidence of that. Even at face value, the idea of "cornering the market" on a depreciating asset with no long-term value isn't a war strategy, it's flushing money down the toilet. Moreover, there's a credible argument OpenAI wanted to secure capacity in an essential part of their upstream supply chain to ensure stable prices for themselves. That's not "cornering the market," either, it's securing stability for their own growth.
Apple used to buy-up almost all leading-edge semiconductor process capacity from TSMC. It wasn't to resell capacity to everyone else, it was to secure capacity for themselves (particularly for new product launches). Nvidia has been doing the same since the CUDA bubble took off (they have, in effect, two entire fabs worth of leading-edge production just for their GPUs/accelerators). Have they been "cornering" the deep sub-micron foundry market?
OpenAI's entire business strategy thus far can be summarized as "flushing money down the toilet", so that isn't actually as unlikely as you're making it sound.
If what we've heard about no acceptable pre-training runs from them in the last two years trying to increase the memory for training by two orders of magnitude is just a rehash of what got them from gpt2 to gpt3.
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.
It would require half of one distribution center of a major retailer.
That also meets the specifications of a clean room, and is actively maintained as one?
If OpenAI bought 40% of the annual capacity of finished memory, with the goal of using it in their server farms ASAP, that's one thing.
But unfinished wafers that still need to be protected to finish the manufacturing process, that OpenAI itself does not have any capability to do?
That to me looks like a preemptive strike against competitors, which also affects any other industry that requires RAM, in an attempt to develop a monopolistic position.
I can't see how this isn't a massive national security issue for any country that needs devices requiring RAM for new systems and maintenance of existing ones (pretty much all of them...) to manage critical infrastructure, national defence, public and social services, and so on.
Also consider:
Warehouses of small, high-value items that are fungible and untraceable.
That will create multiple huge targets for a big heist. And they'd best have good eyes on their security people too.
Sounds like something big enough for organized crime to target.
> https://www.economist.com/business/2025/11/19/cracks-are-app...
You have to appreciate the irony :)
Quite lazily done and just not pleasant to read.
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.
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.
Am I crazy for wanting this to be in Full ECC RAM modules suitable for composition into many device factors with hope that we'll finally go to reliable memory for all markets as a result?
How'd that turn out? https://en.wikipedia.org/wiki/Silver_Thursday#:~:text=On%20J...
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?
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.
wtf. life sucks.
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.
And are Samsung, etc. happy for this state of affairs to keep their prices elevated but not seem like the bad guy.
Getting pretty tired of that place tbh.
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.
> 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/ope... | 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.
TFA mentions that if Samsung and SK Hynix had known what shenanigans were underway, they would have pursued better pricing terms.
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.
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?
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.
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?
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.