Comment by colechristensen
1 day ago
The ~$1T/y AI capex isn't remotely sustainable. Memory fab capacity will go up, AI datacenter provisioning will go down, prices will become reasonable.
1 day ago
The ~$1T/y AI capex isn't remotely sustainable. Memory fab capacity will go up, AI datacenter provisioning will go down, prices will become reasonable.
> Memory fab capacity will go up
The fabs are terrified to overscale in case the market collapses before the builds are complete.
> AI datacenter provisioning will go down
Depends on political opposition at both local and national levels. Hard to predict the future, which feeds into the previous point.
What is it with fabs where there is just no competition springing up outside the existing memory cartels? Is the knowledge of how to build and run a fab strictly controlled by these companies? Is all qualified talent just immediately poached and put behind NDA and noncompetes? It just makes no sense. Capitalism would suggest these conditions with so much unstable equilibrium in this market would see increase in supply to take advantage of the pricing. The fact that this isn't playing out as such suggests there are some very powerful thumbs on the scale of this "free" market.
It takes about a decade to bring one up and during EVERY wave of a booming memory demand supply crunch there has been a subsequent round of major bankruptcies from suppliers who decided to scale and had no demand when they finally got online.
Supply is not elastic and responds very much slower than demand. There's no conspiracy or corruption needed for this result.
3 replies →