I remember the HDD shortage after flooding in Thailand. There was a price surge for a year or so, capacity came back online, and the price slowly eased. If AI crashes, prices might quickly collapse this time. If it doesn't, it'll take time, but new capacity will come online.
Nah. The demand is driven by corporations that hoard hardware in datacenters, starving the market and increasing prices in the process - otherwise known as scalping. Then they sell you back that same hardware, in the form of cloud services, for even higher prices.
The government can't, and doesn't, make infinite money. Govt debt can't grow to infinity either, so if revenue is not increased, unpredictable and unpleasant events will follow. However, the taxation issue is so hopelessly misrepresented and misunderstood that I'm not going to discuss it here.
That’s not what I’m saying. If the implication is that hard drives of all things are being manipulated to make unlimited amounts of money, then the government could just do the same thing and earn that money for the public instead.
And in the process of doing so they're providing a hugely valuable service by building these complex systems out of lots different components, and people and companies find a lot of value in that service.
Calling this "scalping" is just economically illiterate conspiracy theorizing.
The majority of these companies have long term purchase agreements for hardware at prices far lower than the market prices today, that's front-running the hardware market, the same as scalpers buying up GPU's to restrict supply and then sell at higher prices.
> And in the process of doing so they're providing a hugely valuable service
The value is in the hardware itself, the added services aren't essential - just packaging. The GPU scalpers also sell "a hugely valuable" product, but that has nothing to do with anything, manipulating supply for a price differential is what matters.
> Calling this "scalping" is just economically illiterate conspiracy theorizing.
Scalping is not a conspiracy, it's a well known fact observed since antiquity. Conspiracy or the lack of it thereof aren't among my concerns, the economic fundamentals enabling that phenomenon are.
Literally everything you are describing, like long term purchase agreements, have been used by corporations (and non-corporations, like farmers) for decades if not centuries, and nobody called this "scalping" before.
You're just "trying to make fetch happen". Stop trying to make fetch happen, Gretchen, because nobody else thinks it's scalping.
Wow, this is an economics-free take if I've ever heard one. And calling it scalping feels laughable.
There are multiple RAM providers. Datacenters, many competing ones, are gobbling up RAM because there is currently a huge demand. And, unlike actual ticket scalpers, datacenters perform a very valuable service beyond just reselling the RAM. After all, end users could buy up RAM and GPUs themselves and build their own systems (which is basically what everybody did as recently as the early 00s), but they'd rather rent it because it's much less risky with much less capex.
This is simply run-of-the-mill supply and demand. You might convince me there was something nefarious if there was widespread collusion or monopoly abuse, and while some of the circular dealing is worrisome, it's still a robust market with multiple suppliers and multiple competitors in the datacenter space.
> This is simply run-of-the-mill supply and demand.
That's definitely NOT run-of-the-mill demand because it comes from companies buying hardware at operating loss, which can only be recouped by scalping higher prices at the expense of a starved market.
Demand funded by circular financial agreements and off-the-book debt isn't "run-of-the-mill" by any stretch.
What happens if some clever HN programmer develops a new algorithm such that you can do training and inference with 1/10 or even 1/100 of the GPU horsepower?
Another way to think about it is a good that we once bought for private use where it sat around underutilized the majority of the time is instead being allocated in data centers where we rent slices of it, allowing RAM to be more efficiently allocated and used.
Yes it sucks that demand for RAM has led to scarcity and higher prices but those resources moving to data centers is a natural consequence of a shareable resource becoming expensive. It doesn’t have to be a conspiracy.
