by mlsu 4 hours ago
Moves like this should be illegal.
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" ...
This is a desperate move by a company that is in huge trouble.
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.
As in producers not over-producing RAM should be illegal? A presumably short-term price spike in RAM of all things is a non-issue. It is a luxury good that only a very small number of people care about and there is no reason to think this blip is going to last. Apple did stuff like this all the time at their high point in the late 2000s and early 2010s, and it would happen often in other markets. The world is not static and sometimes the situation changes and lots of supply is soaked up.
> It is a luxury good that only a very small number of people care about
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.
> It is a luxury good that only a very small number of people care about
This is an incorrect and incredibly out of touch comment fragment. Computer part derivatives are an essential item to economic activity in most countries.
Who in developed countries doesn't buy computers and by extension ram
Who in the developed world doesn't have a few luxuries? Pretty much all of history people have had to make do with RAM being a lot less accessible than it is now. It isn't essential and people can still buy RAM in the rare situations where they actually need it.
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.
DRAM is one of the categories of advanced semiconductors that the US considers important enough to national security that exporting it to China is forbidden. It's a fundamental industrial product.
Yeah. Companies like OpenAI need a lot of RAM. That is why they just bought up what is apparently a material chunk of the market.
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.
They didn't actually buy up the finsished product they actually require. Arguably they raised the price of an input they cannot immediately use hurting themselves by raising the price for what they do actually use in order not to serve a need but to hurt others including the 99.9% of households that use devices with RAM.
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.
I don't follow how computers are not essential.
> A presumably short-term price spike in RAM of all things is a non-issue. It is a luxury good that only a very small number of people care about
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.
To add to your message.
Memory is everywhere. In computer, phones, fridges, TVs, cameras, toys, watches, all kinds of home and industrial appliances.
> The supply crunch will effect a surprising spread of the economy given how ubiquitous computers are now.
If the OpenAI-induced supply crunch causes the AI bubble to burst, I may drop dead from irony-poisoning.
> Apple did stuff like this all the time at their high point in the late 2000s and early 2010s, and it would happen often in other markets.
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.
> Moves like this should be illegal.
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?
It wouldn't shock me if this is actually just market manipulation. OpenAI in the past year seems to be operating more and more like a pump and dump machine. Their recent AMD deal seems to have been AMD giving them a bunch of stock for free in exchange for them announcing that they would use AMD GPUs for training, and OpenAI doesn't have any fab equipment so the only thing they can do with 40% of the global dram supply is sell it to someone else.
It's market manipulation. You get a chase going (panic buying) by those that are short (need to buy memory in the future). Run up the price on those shorts and squeeze them out as they chase price higher, meanwhile you bought in low and can distribute out your supply when you see fit, or run it up higher until everyone is wrecked. If I were the memory makers I wouldn't want to cede control to openai, you'd rather have a healthy, steady ecosystem than a rigged market that people don't want to be involved in.
the only thing they can do with 40% of the global dram supply is sell it to someone else.
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.
Should be investigated as anticompetitive behavior under the FTC Act. Of course that's unlikely to happen. Maybe also market manipulation under the Commodity Exchange Act.
Seems like it is, but the question is whether the current Justice Department will do anything about it.
I read "US Justice Department" the same way I read "Britain's Ministry of Truth".
When I hear about this US justice department, I hear the mafia enforcement.
It has been since forever. There was a reason J. Edgar Hoover denied the existence of organized crime for decades.
> Seems like it is
Do you have a citation for what law is being violated? Or just vibes?
It's possible this could be construed as price fixing. If the DOJ cared it could open an investigation, leading to a suit, leading to discovery of communications between Altman and all the other relevant players. If price manipulation is an apparent factor in their decision making it may be a very easy case.
https://fortune.com/2025/11/23/ai-rivals-like-openai-nvidia-...
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
Whether the Clayton and Sherman acts apply to the Stargate initiative is not relevant to this RAM-hoarding activity.
Market manipulation is a crime under the Securities Exchange Act of 1934. You can't buy things to influence the price or the market, only to use or resell.
The law you refer to applies only to markets for securities. RAM is very clearly not a security, it fails the Howey test.
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.
How is RAM not a commodity?
It doesn't really matter, because the first question is: can the government suspend the contract (injunction?) while this is sorted out.
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 may be a commodity, but there is no established commodity market for RAM in the US, as there is for energy and agricultural products. The laws relate to the manipulation of a commodity market. Commodity markets are usually established where the products are produced, not where they are consumed.
Do you think OpenAI plans to trade the semiconductor market? This would only apply in that scenario.
It's interesting that this isn't actually illegal to do except in the specific context of an exchange market. I did a very cursory search of the US Code and the Securities Exchange Act of 1934 and yeah, unless there's some additional legal precedent or other applicable law I didn't find, then this might just be a gap in the law.
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.
Let's not forget that if it's not illegal now, it could be illegal in a matter of days. Add 12 if a president decides to sit on their thumbs, it's happened before.
No, they want DRAM to be expensive to give them a competitive advantage over their competitors.
That'd probably make more sense if there wasn't also 50 other tech companies buying up RAM for the same reason (a sudden huge spike in demand due to AI taking off).
They mean to resell them in a different form: as part of their PaaS or SaaS. Per the article, OpenAI is just hoarding the wafers, not purchasing the final product.
It's about volume, not a naive count of consumers. Article claims that OpenAI holds contracts for 40% of world DRAM production. That's just really obviously manipulation if they can't actually power those chips, come on.
So the prosecution will gamble that OpenAI won't in fact use the RAM in a relevant timeframe and they only bought them to exclude the other swath of AI companies from competing?
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.
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The current Justice Department? You're kidding, right?
Google just need to give the US regime a solid gold award
for what? unimportant
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