It’s a swipe at Apple since Apple’s M.O. is to lock in long term memory contracts at guaranteed prices for a couple of years. Contracts Micron has been happy to sign before, so yeah, Micron’s still full of shit.
No, the argument is, "If y'all hadn't squeezed us so hard, it would have been more profitable to invest in expanding production, so we'd have built more fabs and the memory shortage wouldn't be as bad right now."
It's a pretty straightforward argument; I'm not sure why it seems so difficult for you to understand.
When supply and demand moves prices up, it's the invisible hand of the market. When it moves prices down, it's your individual fault and you should consider paying suppliers reparations.
> While most people blame massive demand from AI companies, Micron CEO Sanjay Mehrotra says price pressure from certain customers over the past few years has also significantly contributed to the shortage.
This is some next level gaslighting. AI companies significantly increased the demand and have deeper pockets than most consumers. He who bids most gets the product.
> Mehrotra also said the memory shortage could last into 2027 and beyond because fabrication plants take years to build, and the next generation of memory is even more complex to manufacture. Micron is now investing up to $200 billion in manufacturing and R&D, including new memory fabs in Boise, Idaho, and Syracuse, New York.
When the AI bubble pops, and supply significantly outpaces demand, we'll then see them close tonnes of fabs.
I don’t think it’ll necessarily pop. The excess supply could even induce additional demands in not just LLM or AI but in other verticals. The margins of hyperscalers and infra providers might thin out, but with all that surplus in hardware, they can find new uses. For example, developers rent their own GPU node for cheap capable of running frontier open weight models instead of running local models. Computers and consoles will be cheaper again and more people will want to buy them. Non-LLM related simulations could benefit from excess hardware.
Too many people seem to believe that the AI bubble popping means something like "the total volume of the activity will precipitously drop and whole centers will be abandoned forever".
I don't believe that. I was an adult when the dot-com bubble popped. What happened then was that a lot of unsound businesses went under, and the healthier players (like Amazon) expanded into the resulting void. Ultimately, the relentless march of digital technology didn't even slow down back then, although the inflow of risk capital definitely did. But the existing resources were mostly taken over by someone else.
If/when the current bubble bursts, it will be similar. All that infrastructure will be resold and re-rented to healthier players. By now, machine learning has reached a level of usability/maturity which is genuinely useful and the economy at large won't abandon it any more than it abandoned e-mail or WWW back then.
I'm not sure why you were downvoted, your point is well made.
> Too many people seem to believe that the AI bubble popping means something like "the total volume of the activity will precipitously drop and whole centers will be abandoned forever".
I think that many of them will fail. We have several data centers being built nearby to me, where the UK has some of the highest energy prices. I don't know how AI companies can make it make economic sense, let alone any normally operating company (like a Cloud service provider).
> I don't believe that. I was an adult when the dot-com bubble popped. What happened then was that a lot of unsound businesses went under, and the healthier players (like Amazon) expanded into the resulting void. Ultimately, the relentless march of digital technology didn't even slow down back then, although the inflow of risk capital definitely did. But the existing resources were mostly taken over by someone else.
I think the difference between this and the dot-com crash is enormous. Every part of our economy is now entangled in this. A significant part of the US's GDP is based on the idea that Nvidia can keep expanding their market cap past several Western nations. Your pension likely has large buy-ins on the AI hype. Everybody at every level is very exposed to this.
> If/when the current bubble bursts, it will be similar. All that infrastructure will be resold and re-rented to healthier players. By now, machine learning has reached a level of usability/maturity which is genuinely useful and the economy at large won't abandon it any more than it abandoned e-mail or WWW back then.
I have my doubts that anybody will be liquid enough to buy what remains at reasonable prices. And the impact of that is obvious, why buy RAM from Micron when LLM Corp are selling it for 50% of retail value?
Memory used to be the bottleneck because it was the slowest after SSD and NVMe arrived. Now they became the bottleneck again but for a different reason. One has to wonder.
I don't trust anything Micron has to say about DRAM pricing https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal
Interesting. I wasn't aware PC gamers were building fabs in their bedrooms and undercutting Micron.
It’s a swipe at Apple since Apple’s M.O. is to lock in long term memory contracts at guaranteed prices for a couple of years. Contracts Micron has been happy to sign before, so yeah, Micron’s still full of shit.
Just FYI “customers” means companies that are sending Micron a PO/signing a contract for hundreds of millions or billions of dollars.
PC gamers aren’t Microb’s customers lol, nor is the CEO referring to gamers/consumers. Think Apple.
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Flailing. I hope its because he fears for his job and not because he senses yet another price-fixing scandal on the horizon.
Sanjay Mehrotra said the industry suffered from low prices, leaving companies with insufficient funds to expand production.
If my Granda had wheels she'd be a bicycle
So, the argument is, "the markets forced us to collude and price fix!"?
Sounds like "blame the victim" mentality to be honest.
No, the argument is, "If y'all hadn't squeezed us so hard, it would have been more profitable to invest in expanding production, so we'd have built more fabs and the memory shortage wouldn't be as bad right now."
It's a pretty straightforward argument; I'm not sure why it seems so difficult for you to understand.
When supply and demand moves prices up, it's the invisible hand of the market. When it moves prices down, it's your individual fault and you should consider paying suppliers reparations.
Too bad that companies expecting massive profits from certain investments can't get a credit for them! Nope, all out of money!
I don't think it's entirely customers' fault that companies could afford to lower prices when there was an oversupply price crash in 2023.
https://en.wikipedia.org/wiki/Pork_cycle
https://en.wikipedia.org/wiki/Bullwhip_effect
> While most people blame massive demand from AI companies, Micron CEO Sanjay Mehrotra says price pressure from certain customers over the past few years has also significantly contributed to the shortage.
This is some next level gaslighting. AI companies significantly increased the demand and have deeper pockets than most consumers. He who bids most gets the product.
> Mehrotra also said the memory shortage could last into 2027 and beyond because fabrication plants take years to build, and the next generation of memory is even more complex to manufacture. Micron is now investing up to $200 billion in manufacturing and R&D, including new memory fabs in Boise, Idaho, and Syracuse, New York.
When the AI bubble pops, and supply significantly outpaces demand, we'll then see them close tonnes of fabs.
I don’t think it’ll necessarily pop. The excess supply could even induce additional demands in not just LLM or AI but in other verticals. The margins of hyperscalers and infra providers might thin out, but with all that surplus in hardware, they can find new uses. For example, developers rent their own GPU node for cheap capable of running frontier open weight models instead of running local models. Computers and consoles will be cheaper again and more people will want to buy them. Non-LLM related simulations could benefit from excess hardware.
"When the AI bubble pops"
Too many people seem to believe that the AI bubble popping means something like "the total volume of the activity will precipitously drop and whole centers will be abandoned forever".
I don't believe that. I was an adult when the dot-com bubble popped. What happened then was that a lot of unsound businesses went under, and the healthier players (like Amazon) expanded into the resulting void. Ultimately, the relentless march of digital technology didn't even slow down back then, although the inflow of risk capital definitely did. But the existing resources were mostly taken over by someone else.
If/when the current bubble bursts, it will be similar. All that infrastructure will be resold and re-rented to healthier players. By now, machine learning has reached a level of usability/maturity which is genuinely useful and the economy at large won't abandon it any more than it abandoned e-mail or WWW back then.
I'm not sure why you were downvoted, your point is well made.
> Too many people seem to believe that the AI bubble popping means something like "the total volume of the activity will precipitously drop and whole centers will be abandoned forever".
I think that many of them will fail. We have several data centers being built nearby to me, where the UK has some of the highest energy prices. I don't know how AI companies can make it make economic sense, let alone any normally operating company (like a Cloud service provider).
> I don't believe that. I was an adult when the dot-com bubble popped. What happened then was that a lot of unsound businesses went under, and the healthier players (like Amazon) expanded into the resulting void. Ultimately, the relentless march of digital technology didn't even slow down back then, although the inflow of risk capital definitely did. But the existing resources were mostly taken over by someone else.
I think the difference between this and the dot-com crash is enormous. Every part of our economy is now entangled in this. A significant part of the US's GDP is based on the idea that Nvidia can keep expanding their market cap past several Western nations. Your pension likely has large buy-ins on the AI hype. Everybody at every level is very exposed to this.
> If/when the current bubble bursts, it will be similar. All that infrastructure will be resold and re-rented to healthier players. By now, machine learning has reached a level of usability/maturity which is genuinely useful and the economy at large won't abandon it any more than it abandoned e-mail or WWW back then.
I have my doubts that anybody will be liquid enough to buy what remains at reasonable prices. And the impact of that is obvious, why buy RAM from Micron when LLM Corp are selling it for 50% of retail value?
Memory used to be the bottleneck because it was the slowest after SSD and NVMe arrived. Now they became the bottleneck again but for a different reason. One has to wonder.
What do you mean slowest? even DDR4 is way faster than any NVME SSD
Lmao oh please micron
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