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?
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.
What are the chances the deal doesn’t go through because OpenAI fails to find enough money?
Between Google, other labs and China the risk of commoditization is climbing and so why would investors continue to throw money at them? Kind of the same problem people are starting to bring up regarding Nvidia order book no? Do SoftBank and Oracle have $500B in cash to go through, or does it count on new investors coming in to not implode?
Edit: From the Stargate page on Wikipedia it seems indeed there is a big uncertainty regarding financing:
> On August 7, 2025, Bloomberg reported that the project had not started and no funds were raised to meet the project's initial $500 billion budget. Market uncertainty, American trade policy, and AI hardware valuations caused the delay according to a Bloomberg News report
Last time I used OpenAI computer-use agent (Atlas iirc), I asked it to go on vast.ai and configure an instance template for me. It gave me back control to input my username and password, but alas, since I had used my google account to sign in, I had to go through Google login portal, which put an end to my experiment since it deemed the agent's browser wasn't trustworthy.
> Budget brands normally buy older DRAM fabrication equipment from mega-producers like Samsung when Samsung upgrades their DRAM lines to the latest and greatest equipment. This allows the DRAM market to expand more than it would otherwise because it makes any upgrading of the fanciest production lines to still be additive change to the market. However, Korean memory firms have been terrified that reselling old equipment to China-adjacent OEMs might trigger U.S. retaliation…and so those machines have been sitting idle in warehouses since early spring.
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".
If the free market requires both that companies both ignore that they exist in a world with consequences and that they manage to perfectly predict future demand, that sounds more like an issue with the idea that the free market will solve everything than an issue with the market not being free enough. Otherwise, if you're not happy with the way a company acts, and you don't seem to trust that another company will come and rest their lunch for their perceived poor decisions, your only remaining remedy is to pressure them by non-economic methods to increase production, at which point you don't really believe in the free market either.
> 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.
The globalized free market wasn't all it was cracked up to be, so 90s-era understandings of how things are "supposed" to be will need to be revised.
There's nothing dirty about this deal. When making a large deal with one vendor he didn't disclose to them that he was making a deal with another vendor. That's pretty normal when you're trying to buy a lot of stuff. Otherwise, they can collude to shake you down.
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.
Secondary RAM Manufacturing Had Stalled. Budget brands normally buy older DRAM fabrication equipment from mega-producers like Samsung when Samsung upgrades their DRAM lines to the latest and greatest equipment. This allows the DRAM market to expand more than it would otherwise because it makes any upgrading of the fanciest production lines to still be additive change to the market. However, Korean memory firms have been terrified that reselling old equipment to China-adjacent OEMs might trigger U.S. retaliation…and so those machines have been sitting idle in warehouses since early spring.
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.
> To be clear - the shock wasn’t that OpenAI made a big deal, no, it was that they made two massive deals this big, at the same time, with Samsung and SK Hynix simultaneously
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.
This wasn't buying a cake from a baker, this was a bakery buying 40% of the flour in the world so nobody else can sell wedding cakes, but now there's gonna be no bread for a year
almost feel like OpenAI's recent "fall" is a decoy setup by them intentionally.. something's cooking.. maybe they wanted to buy back their own shares at a lower price?
I'm curious how OpenAI has the funds to pay for 40% of the worlds ram production? Sure they are big and have a few billions but I kind of assumed that 40% for a year or whatever they are buying is easily double digit billions? That has to hurt even them, especially because they cant buy anything else?
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 think the event is big enough to stop them and send them behind bars.
> Samsung
I think that Samsung -and other manufacturers- have been intentionally limiting their production capacities so as not to devalue the prices of their chips (for SSD at least) so may be they are an interested part. This, combined with the madness we are seeing, is abuse^2 . I think they should also end up behind bars.
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[ 3.1 ms ] story [ 74.4 ms ] threadOP 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?
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.
Between Google, other labs and China the risk of commoditization is climbing and so why would investors continue to throw money at them? Kind of the same problem people are starting to bring up regarding Nvidia order book no? Do SoftBank and Oracle have $500B in cash to go through, or does it count on new investors coming in to not implode?
Edit: From the Stargate page on Wikipedia it seems indeed there is a big uncertainty regarding financing:
> On August 7, 2025, Bloomberg reported that the project had not started and no funds were raised to meet the project's initial $500 billion budget. Market uncertainty, American trade policy, and AI hardware valuations caused the delay according to a Bloomberg News report
Mmmh.
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".
The globalized free market wasn't all it was cracked up to be, so 90s-era understandings of how things are "supposed" to be will need to be revised.
wtf. life sucks.
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...
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.
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.
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?
[1] https://en.wikipedia.org/wiki/Ponzi_scheme
[2] https://en.wikipedia.org/wiki/Hoarding_(economics)
I think the event is big enough to stop them and send them behind bars.
> Samsung
I think that Samsung -and other manufacturers- have been intentionally limiting their production capacities so as not to devalue the prices of their chips (for SSD at least) so may be they are an interested part. This, combined with the madness we are seeing, is abuse^2 . I think they should also end up behind bars.