5 ms·

If demand outpaces supply then there’s a shortage no matter what you do. I don’t believe scalpers are an issue in B2B; these aren’t concert tickets being sold

by docjay 1mo ago

If demand outpaces supply then there’s a shortage no matter what you do. I don’t believe scalpers are an issue in B2B; these aren’t concert tickets being sold to the general public. It’s clear you grasp the economic theory as it’s taught, but my comment was meant for you to question it. If someone is hungry you can charge more for food. The market allows and encourages it. But don’t mistake that for “willingness” and don’t mistake raising the prices purely to get extra money from the exchange as some inevitable law of the universe. You’re welcome to love the concept, but don’t whitewash it.

crote 1mo ago
> If demand outpaces supply then there’s a shortage no matter what you do. Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. If my 7-year-old computer were to die tomorrow I would've normally replace the entire thing. It has had a good life, the newer generations of hardware are a decent bunch faster, and it would be nice to get some additional features. With current RAM prices? No way I can afford to upgrade to DDR5, I'll have to get a replacement AM4 motherboard / CPU to fix it. > I don’t believe scalpers are an issue in B2B They are called "speculators". DRAM is a commodity and is traded no different from, say, potatoes. It's why there are companies like DRAMeXchange. DRAM module assemblers like Kingston, G.Skill, and Corsair will buy chips from whoever gives them the best deal. Similarly, anyone assembling hardware using DRAM will have stockpiled it when the AI boom became noticeable - with some almost certainly selling it off now that it has become too valuable to use for cheaper products.
- jonhohle 1mo ago
  I just did exactly that. I had an old i7 with 64GB of DDR4 that I bought when it was cheap. DDR5 was so expensive I just bought an AM4 and moved the RAM over. My MacBook is showing its age, though. Hearing that 2027 wont be any better makes me hopeful all the vibe coders can ask for memory efficient implementations to stretch existing hardware a little further.
  - zenoprax 1mo ago
    > Hearing that 2027 wont be any better makes me hopeful all the vibe coders can ask for memory efficient implementations to stretch existing hardware a little further. I've been thinking about this too. After being forced to work off a laptop with 6GB of RAM for a few weeks it made me appreciate my 32GB at home where I run Electron apps with abandon. It still seems crazy to me that we've normalized running an entire browser for a single program just because the UI frameworks are too hard/unfamiliar to the majority of programmers.
    - andrekandre 1mo ago
      > just because the UI frameworks are too hard/unfamiliar i'm not sure if thats the biggest issue. working at a few large companies that had to support multiple platforms, the management was always looking for ways to deduplicate work with things like flutter, kmp etc; they just want one codebase to manage and qa because 2 or more gets to be hard for them to handle (hiring is also easier) i take it even with ai companies will still do this, whith exhibit a being the electron-based codex app from openai...
- tsimionescu 1mo ago
  > Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. If potatoes suddenly became $1000/kg, everyone would agree that there is a shortage of potatoes. While sure, people won't starve and will eat other things, it doesn't change the basic fact that there aren't enough potatoes. The situation with RAM is even worse. If I'm trying to build and sell computing devices, I need RAM. Whether no one is willing to sell RAM at all, or whether they'll sell it only for 10x yesteryears's price, it doesn't make much difference to me, I'm still going out of business. Sure, that will then make demand technically go down, but not the shortage.
  - b112 1mo ago
    This whole thread is a bad analogy. Take all potatoes out of the market, and: 1) Some people won't be able to afford alternatives. They will starve to death 2) There may not be enough of other foods, so even if people have money, people will starve to death. There are years where corn or rice or oats are of poor yield. A couple of years of that, and canned food and stored food is gone. It doesn't take long for "we have no <core staple food>", and things become bad. This isn't a 3 month or year long blip in RAM pricing. If nothing changes, no bubble bursts, we won't see RAM become plentiful until 2035 at least. And a tight supply until 2030. That's not a year of no potatoes. That's a decade of a core crop, with loads of calories, gone. That's "people are going to starve somewhere" trouble. (I hate this food analogy, because in the West we've not seen a drought cause people to starve for half a century, if not longer. People are too complacent. To speak to that, we grow crops where we get best value for the money. And best results. Corn cannot be grown in much of Canada, it needs a LOT of sun to mature, where as wheat can with a shorter growing season. Rice needs lots of water, where as other crops are more tolerant. Potatoes do well in certain soils. If there are no potatoes, you cannot just grow anything in that location. Take away a core crop, and you can just lose those calories. Especially as farmers won't switch on the first year of a lost crop.) RAM is quite durable, so I can imagine buying new servers with new CPUs, but instead of DDR5, it has DDR4 RAM slots. A loss of performance to be sure, but a good way to renew your fleet, and reduce the impact of all of this. But such boards aren't really here I don't think, not in quantity.
- swiftcoder 1mo ago
  > Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. The year 1845 called, and they'd like a word
- throwaway894345 1mo ago
  What do I switch to instead of memory for my AI computer?
tjwebbnorfolk 1mo ago
When demand exceeds supply you have two options: make the people who value those goods the highest compete with each other to pay the natural market price for them, or have a lottery with price ceilings. Price ceilings create inefficiency, and they create black markets. In a lottery, the goods are misallocated to a bunch of people who aren't getting the most value out of the goods, creating economic inefficiency. A bunch of GPUs would be sitting in warehouses waiting to be resold (either when the price goes up, or in the inevitable black market), or in my basement screwing around with them, instead of being deployed in a way that the most people can benefit from creating maximum economic value from their deployment. Your gaming PC isn't as economically valuable as JPMorgan using AI for fraud detection, for example. Moreover, if you are appointed god and force everyone to sell GPUs at one dollar just because you want cheap GPUs, then this is the last batch of GPUs that will ever be produced and you'll have a shortage until the end ot time.
- repsilat 1mo ago
  > you have two options There are many other ways to allocate capacity. For example, you could give preferential access to customers who sign long-term purchase commitments, or some other favourable terms. These other methods might correlate well with value to the seller and might be easier for buyers to pay. Other methods could be "allocate to customers that you want to maintain a good relationship with." I suspect HBM is not allocated either with pure auctions or by lottery.
- tsimionescu 1mo ago
  Not that I'm advocating for this with RAM, but another tried and true solution for necessary goods with limited supply is rationing. This is what got everyone through WW2, for example.
  - tjwebbnorfolk 1mo ago
    Rationing works when there are alternative goods available. Spam instead of steak, in your example. One of the most difficult shortages during WW2 was rubber, because there was no (known, at the time) comparable alternative. With GPUs, rationing would have the same effect as a lottery -- you either get to run AI, or you don't.

by docjay 1mo ago

crote 1mo ago

> If demand outpaces supply then there’s a shortage no matter what you do. Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. If my 7-year-old computer were to die tomorrow I would've normally replace the entire thing. It has had a good life, the newer generations of hardware are a decent bunch faster, and it would be nice to get some additional features. With current RAM prices? No way I can afford to upgrade to DDR5, I'll have to get a replacement AM4 motherboard / CPU to fix it. > I don’t believe scalpers are an issue in B2B They are called "speculators". DRAM is a commodity and is traded no different from, say, potatoes. It's why there are companies like DRAMeXchange. DRAM module assemblers like Kingston, G.Skill, and Corsair will buy chips from whoever gives them the best deal. Similarly, anyone assembling hardware using DRAM will have stockpiled it when the AI boom became noticeable - with some almost certainly selling it off now that it has become too valuable to use for cheaper products.

jonhohle 1mo ago
I just did exactly that. I had an old i7 with 64GB of DDR4 that I bought when it was cheap. DDR5 was so expensive I just bought an AM4 and moved the RAM over. My MacBook is showing its age, though. Hearing that 2027 wont be any better makes me hopeful all the vibe coders can ask for memory efficient implementations to stretch existing hardware a little further.
- zenoprax 1mo ago
  > Hearing that 2027 wont be any better makes me hopeful all the vibe coders can ask for memory efficient implementations to stretch existing hardware a little further. I've been thinking about this too. After being forced to work off a laptop with 6GB of RAM for a few weeks it made me appreciate my 32GB at home where I run Electron apps with abandon. It still seems crazy to me that we've normalized running an entire browser for a single program just because the UI frameworks are too hard/unfamiliar to the majority of programmers.
  - andrekandre 1mo ago
    > just because the UI frameworks are too hard/unfamiliar i'm not sure if thats the biggest issue. working at a few large companies that had to support multiple platforms, the management was always looking for ways to deduplicate work with things like flutter, kmp etc; they just want one codebase to manage and qa because 2 or more gets to be hard for them to handle (hiring is also easier) i take it even with ai companies will still do this, whith exhibit a being the electron-based codex app from openai...
tsimionescu 1mo ago
> Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. If potatoes suddenly became $1000/kg, everyone would agree that there is a shortage of potatoes. While sure, people won't starve and will eat other things, it doesn't change the basic fact that there aren't enough potatoes. The situation with RAM is even worse. If I'm trying to build and sell computing devices, I need RAM. Whether no one is willing to sell RAM at all, or whether they'll sell it only for 10x yesteryears's price, it doesn't make much difference to me, I'm still going out of business. Sure, that will then make demand technically go down, but not the shortage.
- b112 1mo ago
  This whole thread is a bad analogy. Take all potatoes out of the market, and: 1) Some people won't be able to afford alternatives. They will starve to death 2) There may not be enough of other foods, so even if people have money, people will starve to death. There are years where corn or rice or oats are of poor yield. A couple of years of that, and canned food and stored food is gone. It doesn't take long for "we have no <core staple food>", and things become bad. This isn't a 3 month or year long blip in RAM pricing. If nothing changes, no bubble bursts, we won't see RAM become plentiful until 2035 at least. And a tight supply until 2030. That's not a year of no potatoes. That's a decade of a core crop, with loads of calories, gone. That's "people are going to starve somewhere" trouble. (I hate this food analogy, because in the West we've not seen a drought cause people to starve for half a century, if not longer. People are too complacent. To speak to that, we grow crops where we get best value for the money. And best results. Corn cannot be grown in much of Canada, it needs a LOT of sun to mature, where as wheat can with a shorter growing season. Rice needs lots of water, where as other crops are more tolerant. Potatoes do well in certain soils. If there are no potatoes, you cannot just grow anything in that location. Take away a core crop, and you can just lose those calories. Especially as farmers won't switch on the first year of a lost crop.) RAM is quite durable, so I can imagine buying new servers with new CPUs, but instead of DDR5, it has DDR4 RAM slots. A loss of performance to be sure, but a good way to renew your fleet, and reduce the impact of all of this. But such boards aren't really here I don't think, not in quantity.
swiftcoder 1mo ago
> Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. The year 1845 called, and they'd like a word
throwaway894345 1mo ago
What do I switch to instead of memory for my AI computer?

tjwebbnorfolk 1mo ago

When demand exceeds supply you have two options: make the people who value those goods the highest compete with each other to pay the natural market price for them, or have a lottery with price ceilings. Price ceilings create inefficiency, and they create black markets. In a lottery, the goods are misallocated to a bunch of people who aren't getting the most value out of the goods, creating economic inefficiency. A bunch of GPUs would be sitting in warehouses waiting to be resold (either when the price goes up, or in the inevitable black market), or in my basement screwing around with them, instead of being deployed in a way that the most people can benefit from creating maximum economic value from their deployment. Your gaming PC isn't as economically valuable as JPMorgan using AI for fraud detection, for example. Moreover, if you are appointed god and force everyone to sell GPUs at one dollar just because you want cheap GPUs, then this is the last batch of GPUs that will ever be produced and you'll have a shortage until the end ot time.

repsilat 1mo ago
> you have two options There are many other ways to allocate capacity. For example, you could give preferential access to customers who sign long-term purchase commitments, or some other favourable terms. These other methods might correlate well with value to the seller and might be easier for buyers to pay. Other methods could be "allocate to customers that you want to maintain a good relationship with." I suspect HBM is not allocated either with pure auctions or by lottery.
tsimionescu 1mo ago
Not that I'm advocating for this with RAM, but another tried and true solution for necessary goods with limited supply is rationing. This is what got everyone through WW2, for example.
- tjwebbnorfolk 1mo ago
  Rationing works when there are alternative goods available. Spam instead of steak, in your example. One of the most difficult shortages during WW2 was rubber, because there was no (known, at the time) comparable alternative. With GPUs, rationing would have the same effect as a lottery -- you either get to run AI, or you don't.