Don’t doom too much about this headline. HBM contracts represent artificial AI demand. When the bubble pops (and it will pop), the HBM demand evaporates and it’s back to competing for consumers. That said, there will be a very slow ratchet to get back to consumer-competitive prices, because as component costs go down, additional companies will be “priced in” to speculative AI business models, even if hyperscalers and other AI-drunk multinationals are backing off.
Regardless of whether there is a bubble, though, AI spending is ludicriously, unsustainably inflated even from existing memory customers. They are purchasing one-time AI infrastructure that needs to last a decade to even have a remote chance of paying off the hardware investments. There are only a few companies that can afford current AI pricing, those companies have already played their hands and paid for allocations, and they will not keep purchasing at this pace even in their own best case scenarios.
Regulation could keep consumer prices down, but of course we’re in the bad Trump timeline and that won’t happen until at least 2028. Assuming the bubble pops before then, the key to resetting this “new normal” is to NOT purchase anything you do not need to until we’re back to $80-130 / 64GB or cheaper, like it was in 2025. Hold out, make them desperate to lower prices.
Assuming the bubble pops before then, the key to resetting this “new normal” is to NOT purchase anything you do not need to until we’re back to $80-130 / 64GB or cheaper, like it was in 2025. Hold out, make them desperate to lower prices.
that’s the solution, but you know the consumers are not principled to execute it.
Yes, that’s of course fair. Even if it’s not perfect compliance, though, the more people hold out, the faster and lower prices drop, so there’s still value in it.
But short of regulation, is there anything else within our power to do?
Don’t doom too much about this headline. HBM contracts represent artificial AI demand. When the bubble pops (and it will pop), the HBM demand evaporates and it’s back to competing for consumers. That said, there will be a very slow ratchet to get back to consumer-competitive prices, because as component costs go down, additional companies will be “priced in” to speculative AI business models, even if hyperscalers and other AI-drunk multinationals are backing off.
Regardless of whether there is a bubble, though, AI spending is ludicriously, unsustainably inflated even from existing memory customers. They are purchasing one-time AI infrastructure that needs to last a decade to even have a remote chance of paying off the hardware investments. There are only a few companies that can afford current AI pricing, those companies have already played their hands and paid for allocations, and they will not keep purchasing at this pace even in their own best case scenarios.
Regulation could keep consumer prices down, but of course we’re in the bad Trump timeline and that won’t happen until at least 2028. Assuming the bubble pops before then, the key to resetting this “new normal” is to NOT purchase anything you do not need to until we’re back to $80-130 / 64GB or cheaper, like it was in 2025. Hold out, make them desperate to lower prices.
that’s the solution, but you know the consumers are not principled to execute it.
Yes, that’s of course fair. Even if it’s not perfect compliance, though, the more people hold out, the faster and lower prices drop, so there’s still value in it.
But short of regulation, is there anything else within our power to do?