Loading summary
Transcript257 lines
- [00:00]
Ed Zitron
This is an iHeart podcast.
- [00:02]
Shaquille O'Neal (Ad Voice)
Guaranteed Human snoring gasping for air during sleep Daytime sleepiness I'm Shaquille o' Neal and this shouldn't be anybody's experience Ask your doctor about Zepbound Tirzepatide, the first and only FDA approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.
- [00:21]
Zepbound Medication Announcer
Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea and obesity to improve their OSA. Zepbound is a approved as a 2.5, 5, 7.5, 10, 12.5 or 15mg injection. Zepbound contains Tirzepatide and should not be used with other Tirzepatide containing products or any GLP1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't share needles or pens or reuse needles. Don't take if allergic to it or if you or someone in your family had medullary thyroid cancer or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop Zepbound and call your doctor if you have sever stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia. If you're nursing pregnant, plan to be or taking birth control pills. Taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea and vomiting, which can cause dehydration and worsen kidney problems.
- [01:28]
Shaquille O'Neal (Ad Voice)
Talk to your doctor, call 1-800-545-5979 or
- [01:32]
Ed Zitron
visit zepbound.lilly.com this is Miles Gray from Ain't It Footy. How can you stay winning during the FIFA World Cup 2026? Well, the active Cash Visa credit card from Wells Fargo scores unlimited 2% cash rewards on all types of fanfare purchases. That's cash rewards on tickets, merch and game day snacks. I call that a win, win, win because unlimited 2% cash rewards earned means unlimited bragging rights won. Terms apply. Visit Wells Fargo.com ActiveCash Visa Worldwide Partner of the FIFA World Cup 2026.
- [02:09]
Harley Davidson / Shell Ad Voice
Fill your tank and fill yourself with new experiences, with old friends, new ones and the next generation ready to ride. Get to living with Harley Davidson Motorcycles when your day is just beginning and full of possibilities. Hit the open road and remember why you want to ride. Visit your local Harley Davidson dealer and see what freedom looks like. Click the screen now and start your Ride@hd.com Ride Harley Davidson motorcycles Ride
- [02:38]
Tremphya Medication Announcer
for adults with Crohn's disease or ulcerative colitis symptoms, Every choice matters. Tremphya offers self injection or intravenous infusion from the start. Tremphya is administered as injections under the skin or infusions through a vein every four weeks, followed by injections under the skin every four or eight weeks. If your doctor decides that you can self inject Tremphya, proper training is required. Tremphya is a prescription medicine used to treat adults with moderately to severely active Crohn's disease and adults with moderately to severely active ulcerative colitis. Serious allergic reactions, increased risk of infections or lower ability to fight them and liver problems may occur before treatment. Get checked for infections and tuberculosis. Tell your doctor if you have an infection, flu like symptoms or need a vaccine. Explore what's possible. Ask your doctor about tremphya today. Call 1-1-800-526-7736 to learn more or visit tremphyaradio.com
- [03:40]
Ed Zitron
Call Zone Media hello and welcome to Better Offline. I'm your host at Zitron.
- [03:56]
Harley Davidson / Shell Ad Voice
Better Offline.
- [03:59]
Ed Zitron
Subscribe to the Newsletter Join the Subreddit Buy a T Shirt all the link are in the notes. And here's a joke to kick us off. What do you call the CEO of a French RAM company? That's right, Emmanuel Micron. And that's what we're here to talk to Steve Burke of Gamers Nexus about today. Steve, welcome back to the Octagon.
- [04:15]
Steve Burke
Emmanuel Micron yeah, that one in the chat before we started.
- [04:20]
Ed Zitron
Yeah, because he would have killed me before I read it on on the but look, we're here to talk about ram, so we'll start with a simple question. Why is RAM so expensive right now? What is doing this?
- [04:34]
Steve Burke
I mean the it's so expensive is not grounded in reality. I think the surface of it is that all the data center build out is consuming all the memory and therefore price higher because everyone wants it. But I do think there's a little bit more to it than that.
- [04:53]
Ed Zitron
Right? So when you build chips, we're going to really simplify this one for the audience because it's a pain in the ass to explain otherwise. But when you build chips, you have something called a wafer. You have the silicon out and then you etch it using a lithography machine, but you can make less high. So there's the high bandwidth memory that they use inside GPUs and then there's the regular DRAM that they use and everything else. Right. Is that it's a simplification, but is that fairly accurate?
- [05:22]
Steve Burke
I think like the, the most base level stuff to know is that memory, some form of RAM or memory is in almost everything. A common misconception. I'm not sure. I think your audience is fairly technical. But a common layperson misconception is that storage is the same as memory. They'll use it interchangeably. Storage is like your drive that you put data on, like photos or whatever. And then memory is a temporary form of storage, a volatile storage that gets wiped when it's not actively being used, when you restart or something.
- [05:55]
Ed Zitron
And when they put stuff in memory, that's where that's like RAM and such, where that's where you put the stuff that you're going to need quickly.
- [06:03]
Steve Burke
Right? Yeah. So yeah, memory is much faster than storage, permanent storage. And so it acts as this sort of transactional buffer to help get things to you quickly. So memories in phones, refrigerators these days, cars, there's all kinds of different grades of memory and it's used in pretty much everything to do some kind of quick like in a car maybe you need to retrieve something related to like if there's a bill built in map on the screen or something like that or in a refrigerator, who the fuck knows, honestly?
- [06:37]
Ed Zitron
So that you can have a giant horrible screen on your Samsung fridge that
- [06:40]
Steve Burke
displays you ads occasionally.
- [06:42]
Ed Zitron
Yes, exactly.
- [06:43]
Steve Burke
Yeah. And so yeah, to go to your wafer comment, yeah, there's different types of sort of production for memory and you'll find DRAM is used in all of it in some capacity for the most part. So you'll find DRAM dies in HBM like inside of an HBM package. But data Center High end GPUs will use high bandwidth memory. And basically every consumer device uses something called gddr which is just a lower bandwidth kind of more normal solution that's not as overboard on the performance for a consumer application. But they all kind of come from the same place, which is a wafer they're all cut from. Right.
- [07:28]
Ed Zitron
So right now they're taking up more, they are using more of the. How much of their capacity are they actually using to build high bandwidth memory? So the stuff that's going in the
- [07:38]
Steve Burke
GPUs, it appears to be an awful lot. I mean, so I know that the recent class action lawsuit or complaint, I should say that was filed notes that the profitability. The plaintiff's attorneys claim that the profitability of traditional conventional DRAM is greater than the profitability of hbm. That was one of their claims. And yet they sort of argue that. And it seems like their evidence is good, but they argue that why would you shift more and more capacity to producing this lower margin thing HBM for? Right. If like the easier thing to make is potentially higher margin? And so it does seem like more of it's shifting over there. You know, OpenAI caused that sort of big kerfuffle previously when they claimed 40% of just all DRAM supply. But that didn't happen though. Yeah, it didn't happen. It was all like basically one of the most insane.
- [08:37]
Ed Zitron
Just an insane story. By the way, just last year, for those of you don't remember, a story came out that OpenAI was buying 35 to 40% of all the world's DRAM wafers. It never happened. Yeah, but we just talked about it like, like we did. Like it did.
- [08:53]
Steve Burke
But it did affect the price.
- [08:56]
Ed Zitron
It did. But here's the question. So why is everything so expensive? That like, is it, is it the. Because are they just jacking the price up?
- [09:07]
Steve Burke
I think so. I mean, so yeah, there's a couple of things here. I'll lay out like some of the highlights and we can, you can figure out how you want to go through them. But one of them is the memory industry has convictions actually in its past of price fixing, collusion and as the DOJ dubbed it, cartel like behavior. So this goes the early 2000s, there was a bust. 2016, 2018, there was an attempt at a similar lawsuit. In the early 90s. The memory manufacturers were talking about how they thought their competitors were price fixing and colluding. And so this is a long and storied history where they. And now there's an active lawsuit punitive class action for price fixing. So there's that antitrust aspect which, that obviously, you know, prices would be higher if you're just doing illegal things to make the prices higher. There's also the sort of physical manufacturing side which is that to make memory, it's not quick to get another fab online. And the companies seem to sort of signal to each other through earnings reports whether they're going to expand capacity or maintain capacity of their fabs, which are factories for memory. So there's that aspect which is if there's real or not a sudden increase in demand, there's going to be a long latency to react to that with more supply if they even want to. So the current projections are 2028 or 2030 if we're getting like more fabs online. The other reason it goes up though is really simple, which is that in a server that goes in a data center, some of Nvidia's newer solutions will use one and a half terabytes of system memory. So that's DRAM they'll use.
- [10:52]
Ed Zitron
Well, they use.
- [10:53]
Steve Burke
Go ahead.
- [10:54]
Ed Zitron
Don't they also use the same RAM as we find in smartphones as well?
- [10:59]
Steve Burke
Yeah, LPDDR typically. Yeah, yeah. So Grace will use. I think it's 5x I think is what they're on.
- [11:06]
Ed Zitron
Yeah, I pulled the numbers and it's something like 20 terabytes for an NVL 72, which is a 72 GPU rack.
- [11:14]
Steve Burke
Yeah, so they do. The single blade for the big boy is 1 1/2 terabytes of system memory alone. And you know, for perspective, a consumer desktop computer might have 16 gigabytes. With Windows these days you probably want like 32. And they're taking one and a half terabytes for one server solution. But that's just the system memory. They also have other processors on there like the Bluepoint or Bluefield, I think it's called. DPU takes 128 gigabytes. If I remember correctly, the GPUs take hundreds of gigabytes to like close to half a terabyte per GPU of hbm. And the HBM has a. There's kind of a yield factor at play where you know you can. When you're talking about manufacturing, that means you're also talking yields. How many good products do you get for every bad. And HBM is more difficult to make. If you have a failure in manufacturing, then you're also potentially losing more silicon dies that could have gone to more consumer devices.
- [12:22]
Ed Zitron
And HBM is made by stacking the memory. Right. So it requires just physically more memory. Forgive me if that's kind of an apes description.
- [12:31]
Steve Burke
No, no, it's fine. Yeah, so HBM high bandwidth memory is literally just really high bandwidth. It's kind of like if you were to. If you were a city and you wanted to solve a public transit problem and you just built a shitload of, I don't know, let's take a massive tunnel. You build like a bunch of trains, you build a ton of trains for passengers, but you don't have enough tracks to put those trains on. They can't actually get on the track without blocking each other. You haven't really solved your problem. And so high bandwidth is trying to solve that by saying, okay, we've got all this capacity for passengers, which is the memory itself. Now we need something like a bigger road system to actually feed that capacity through to access it. And so HBM tries to solve that, especially because you look at GPUs that might have like 12 plus times the amount of capacity that a consumer GPU would have. And so you don't want to starve the GPU core of the data that sits in the memory by not being able to get it fast enough. And so HBM tries to solve that problem. So yeah, to go back to your point of stacking, high bandwidth memory is physically vertically stacked. As in they take silicon dies for memory and they stack them atop each other and then they connect them all together. As opposed to consumer memory, where it's closer to, there's still layers, but it's closer to a flat plane.
- [14:01]
Ed Zitron
Right, but it just means that by virtue of that, it takes up more space in the place where they built the chips.
- [14:07]
Steve Burke
Yeah, yeah. If you're on a consumer device, then the consumer memory, you'll need more physical area to put the same amount of capacity, whereas with the high end server stuff you just stack that capacity vertically. And then it's also HBM's really significant advantage is that it's very low power comparatively. Right, yeah.
- [14:32]
Ed Zitron
But just to be clear, it takes up more space on the fabricator itself.
- [14:36]
Steve Burke
Oh yeah, yeah. If you're talking about the fab space, then yes, HBM requires a lot more space for a few reasons. In terms of manufacturing area, in terms of like footprint on a product, it's less, but in a fab it's more. And why is that in the fab? One of the reasons, so there's a few, but one is that HBM requires additional silicon pieces to be able to function. So with GDDR consumer GPU memory, you pretty much, you have the memory module, it looks like a black rectangle. And then if you were to use like acid or something to etch away the black plastic part, you'd be left with pretty much a singular silicon die underneath. That's all it is for consumer, for hbm, you also need a logic die. So this is another piece of silicon that interfaces with the memory and the stack of memory because you need something to kind of command and control and understand the vertical tower you've got of memory. And then you also need an interposer die which sits underneath everything. So this is a solution that will sit under your GPU core which is a very large piece of silicon and is shared with the HBM stacks. So all of your core and all your HBM is stacked on top of the same. It's called an interposer. It looks like a PCB and they all communicate through that. So that's another piece of silicon. And so for these reasons alone there's also others, but these alone now you're involving more fabs. There's more logistics shipping things around and there's more fab or fabrication plant area allocated. Even if you're just talking about making, someone's got to make the logic dies. TSMC makes the interposers. Right, yes.
- [16:28]
Ed Zitron
There's just more moving parts and it kind of takes up more space.
- [16:31]
Steve Burke
Exactly, yeah.
- [16:33]
Ed Zitron
So why. So to. To my earlier question. So this stuff is obviously lower margin, but they seem to be able to sell an absolute shit ton of it. So is that potentially why they're doing this? That just. They know there is insane demand on a level that for a high. Well, I guess they can charge what they want for it as well. I'm just having trouble trying to work out what it is they're doing other than just filling their boots.
- [16:58]
Steve Burke
Have you tried asking ChatGPT?
- [17:02]
Ed Zitron
No, I could ask my cat and get an answer I'd respect more. But it's genuine. But it's genuinely. Because it seems that unless I'm misunderstanding here, that these Micron, sk, Hynix and Samsung, they're just kind of cranking up the price of regular ram.
- [17:18]
Steve Burke
Yeah. Because they can, I mean, to some extent. Yes. I think this is where the price fixing allegations come in too. I don't know if you try to take their side, which I really don't want to take.
- [17:31]
Ed Zitron
I'm trying, I'm trying.
- [17:32]
Steve Burke
Yeah. If you try to. I think their argument, whether it's for truthful or not, but would be we've got this crazy high demand for hbm. These are guaranteed customers. I can sell terabytes of it to Jensen and it's one point of contact. It all moves quickly and easily and there's this data center demand right now and we don't know if it's going to be here forever. But consumers, they're always going to have to buy electronics or whatever. So I'm not exactly sure if that's. To me it seems like maybe you make some sort of. You assign some value to the B2B relationship over B2C or something. Maybe. But also I guess if they. Yeah, I'm not Sure. If you make less, why would that
- [18:23]
Ed Zitron
mean that they charge more for regular ram?
- [18:26]
Steve Burke
Oh, as far as why more for regular, that part's easy. That's just because the HBM itself takes the same, a lot of the same machines as consumer memory. And so if you're making more hbm, you're naturally making less consumer, which I think is where you start seeing the supply squeeze and the price go up. Likewise, a single piece of HBM can use up to something. I think it's like, it might be like 32 dies max or something of dram. You'll commonly see like four referenced. But single piece of HBM will take more DRAM diesel to build. And so one of the problems is if, let's just say four, if you have a piece of HBM that's got four DRAM dies in it and you have one failure somewhere in that stack or in packaging and assembly, now you've destroyed four individual pieces rather than if you have a yield failure with a consumer device, you destroy one piece.
- [19:28]
Ed Zitron
Sorry to ask a stupid question. What is a die exactly? Is that just the, what we would think of as a stick of ram?
- [19:36]
Steve Burke
No, a die is so a wafer. We'll start at the wafer level. A wafer is just a disc, right? It looks like a CD, typically 8 or 12 inches, and they process it and they pattern it, or they literally project a pattern or they lithographically etch a pattern onto the surface of this disk. Once that's done, these patterns, they're called patterns because it's a repeating sort of set of shapes that ultimately form the logic that makes the silicon. And the word die comes from the process dicing. So with a wafer, when they're done producing it and patterning it, and it's basically ready to become a product, they need to cut that disc into a bunch of small squares. Right.
- [20:31]
Ed Zitron
So it's like a big slab that they cut up.
- [20:34]
Steve Burke
Yeah, I mean it's like making a pizza with the pizza cutter. You know, they're doing a pattern that only psychopaths would do on a pizza, which is making a bunch of squares. And so they cut it into the squares. That's called dicing. And then each of those pieces, the squares that yield from that, those are the dies. And so if you were to pull up an image of any gpu, typically you'll see one large, it's called a monolithic die, which means one singular sort of piece of shiny reflective silicon mirror like finish, that's your die. And then for memory Same exact concept, just a lot smaller.
- [21:13]
Ed Zitron
Right, so.
- [21:15]
Groons Supplement Announcer
Right.
- [21:15]
Ed Zitron
Okay. So there's less space to make regular rams. So they just crank up the price. That's really, that really is it. I think that's their entire thing. Right. But I saw Micron's earnings. They had 84.9% margin. So it just kind of feels like they're setting the price to whatever they want it to be.
- [21:34]
Steve Burke
You don't think there. You don't think that is. I. Is that not enough? I think they need more. Don't you?
- [21:39]
Ed Zitron
They should get 95%.
- [21:41]
Steve Burke
Well, it's just kind of 95. Why are you setting the setting? It's so low.
- [21:44]
Ed Zitron
They should get 110% margins. No, it's just, it's very frustrating as well because I've read now arguments in favor and against Micron where it's like, oh, Micron got screwed by Apple and consumer electronics companies during the last, during the last supply chain crisis because they, they kind of made a bunch more RAM than they needed to.
- [22:09]
Steve Burke
From what I understand me a river, you know, like.
- [22:11]
Ed Zitron
No, it really, it really is. But what. And it seems to be there's this boom and bust cycle in memory where they get a bunch of demand and then what? So do they build more capacity? Is it that they just order too much RAM and then people cancel their orders? Like, what hap. What happened last time?
- [22:30]
Steve Burke
It is cyclical. Yeah. So it's cyclical. I will say right now is nothing like I've ever seen. And we spoke to a bunch of companies, purchasers of memory like G Skill and Corsair, who sell the sticks of RAM that you put in a computer. And those guys were telling us on record that likewise, they've never. This is not like part of the cycle. This is special. And as for how is it different? The difference is how much. The difference is the percentage increase it is this time. So you know, you're looking at like 700% increase in price in some situations in a very short period of time. Normally, cyclically, you'll see some ebbs and flows, but it might be like back in the day a $50 kit of DDR4 became 85 or $90, maybe even 120 if it's a really bad year, but you're still at a little worse than double. Whereas now a $200 kit of memory is suddenly $1,000 to $1,200. And so it's just the, the amount of the price increase is what's different. And then also this time the contest for the supply is it's coming from within the own industry where the very companies that would be the cause for an increase in sales of consumer supply are now the cause of these insane, unprecedented volume of sales for AI components.
- [24:11]
Ed Zitron
Support for today's episode comes from Square, the business platform that helps sellers become neighborhood favorites. Whether you're gearing up for a busy season or just trying to keep up with everyday demand, Square keeps your business running smoothly from payments and POS to online orders, inventory, staff and more all in one place so you can focus on your customers, not your to do list. I like Square a lot as a customer and from talking to various business owners who use it. Everybody seems really happy with how easy and intuitive everything is. Business owners don't have to juggle a bunch of tools and their hardware and software are designed to be easy to use, so day to day options feel a lot simpler with three clear plans. Depending on the tools you need, sellers who use square see 9% higher sales on average. Square helps you run your business more smoothly, bringing payments, operations and insights together in one place so you're ready for whatever's next. Right now, listeners can get up to $200 off square hardware when you sign up at square.com go that's s q u a r e.com go betteroffline get started with Square and build a setup that works the way you do Snoring,
- [25:18]
Shaquille O'Neal (Ad Voice)
Gasping for air during sleep Daytime sleepiness I'm Shaquille o' Neal and this shouldn't be anybody's experience. Ask your doctor about Zepbound Tirzepatide, the first and only FDA approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.
- [25:34]
Zepbound Medication Announcer
Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5 or 15 milligram injection. Zepbound contains Tirzepatide and should not be used with other Tirzepatide containing products or any GLP1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't share needles or pens or reuse needles. Don't take if allergic to it or if you or someone in your family had medullary thyroid cancer or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop, set, bound and call your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia. If you're nursing pregnant plant to be or taking birth control pills, taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea and vomiting, which can cause dehydration and worsen kidney problems.
- [26:41]
Shaquille O'Neal (Ad Voice)
Talk to your doctor, call 1-800-545-5979 or visit zepbound.lilly.com
- [26:50]
Harley Davidson / Shell Ad Voice
if you sometimes turn down the podcast just to hear the hum of your engine, then Shell has the fuel for you. Shelby Power Nitroplus fuels every drive from the Pacific coast to the high desert with a fuel like no other. It provides engine performance that lasts to give you more time on the road because your car's engine matters, that means more protection with active ingredients for longer lasting engines. Shelby Power Nitro plus Premium Gasoline Engine performance that lasts Chances are you're not far from a Shell station. Find it using the Shell app formulation unique to Shell compared to minimum detergent gasoline with continuous use of Shell VPower, NitroPlus and gasoline direct injection engines. Actual effects and benefits may vary. See Shell Us More Protection for more information.
- [27:49]
Groons Supplement Announcer
A lot of wellness routines start with motivation and end somewhere between week two and a half. Used supplement Draw Groons was created to make daily nutrition simpler. Instead of pills or chalky green drinks, groons packs over 20 essential vitamins and minerals, greens and prebiotics into a snack pack of delicious gummies. It feels approachable and not demanding. The convenient comprehensive formula supports gut health, beauty, energy, immunity, recovery and cognition in one daily habit. Groons contain six grams of fibre, which is more than two cups of broccoli and the ingredients in Groons are backed by 35,000 research publications which is part of what makes the formula so intentional. Groons is vegan, gluten free, dairy free, nut free and made without artificial colors or flavours. Plus it's methylated so key nutrients like B12 and folate are informs your body can actually use it's comprehensive nutrition designed for routines you can actually stick with. Get up to 52% off with code CRY@GROONSCO. That's code CRY R U N S.CO.
- [28:58]
Ed Zitron
But it isn't based like so the 2021 supply chain crisis chip crisis was because there was a flood of consumer spending After Covid.
- [29:05]
Steve Burke
Yeah.
- [29:05]
Ed Zitron
And that led to a bunch of consumer demand for products and overall spending across the board. But like consumer demand drove it. This one seems different because it's not demand outside of the. Outside of whatever like psychosis the various hyperscalers has. Like they're not spending $1 trillion in capex really for like. It's not like consumers can't access whatever Microsoft copilot.
- [29:32]
Steve Burke
You know what's interesting is the big three memory makers decided not, I think it was 20, 22 or three to bring on more capacity in some of these situations because they were talking about how they got burned by oversupplying sort of following Covid. Right. But what's interesting is if you go and look at some of the small suppliers, not many of them, but there's a couple of small memory makers that make up like less than 5% of the market. Win Bond, Nanya are two of them. Nanya's in. Well headquartered at least in Taiwan. I don't know where their fab is, but they like these two comedies as far as I'm aware. I was just looking at this this morning. They increased their production capabilities at the time when the big three were saying that they weren't going to do it because they got burned.
- [30:24]
Ed Zitron
Right.
- [30:25]
Steve Burke
Is interesting to me because if you're. This is the argument the lawsuit makes too. If you're a small company, I would think you're at the biggest disadvantage, the biggest risk to increase your production capabilities with this massive amount of spend. If your biggest competitors are saying it looks like bad times ahead, we don't want to spend into this. But if you're a small guy, you're at the greatest risk of going under if you fuck up your good cap. Right.
- [30:53]
Ed Zitron
Why didn't that. Maybe this is a dumb question. Why didn't them increasing supply allow them to kind of undercut the microns of the world?
- [31:00]
Steve Burke
Yeah, that one is just because there's a. Micron does have a technology advantage so they can make memory that these other guys can't. HBM is one of them. Maybe this is. I didn't think about this till now, but maybe there is a very. A small part, I think, but possibly part of an answer to your question of why hbm. That is something that other companies are struggling to make successfully in current generations. So it's.
- [31:30]
Ed Zitron
Well, I know only like sk, Hynix, Samsung and Micron are the ones who can make hbm.
- [31:35]
Steve Burke
Yeah. And CXMT has also struggled with HBM and they're a new Chinese memory Maker that's actually done really well with DDR5. And so there may be a little bit of a pulling the ladder up, you know, after them factor.
- [31:49]
Ed Zitron
Well, here's a question as well. When it comes to high bandwidth memory, surely this is going to lead to an oversupply situation regardless because HBM is used in what, video cards. God, that's such an anachronistic term in the AI bubble. But like it's used in video cards and AI GPUs basically.
- [32:07]
Steve Burke
Right? Yeah, it's very limited. There's almost, there's effectively zero consumer use case.
- [32:14]
Ed Zitron
So when the AI bubble bursts, where does the high bandwidth memory go?
- [32:22]
Steve Burke
Oh yeah, I don't.
- [32:24]
Ed Zitron
Oh, okay. Yeah, because I.
- [32:26]
Steve Burke
We don't talk about the bubble bursting, Ed.
- [32:28]
Ed Zitron
Well, I saw Samsung is talking about increasing their high bandwidth. They're spending like 50 something billion, $500 billion across an indeterminate period. But like also building an entire new high bandwidth memory like Factory.
- [32:45]
Steve Burke
Yeah, and that.
- [32:46]
Ed Zitron
But I was looking, I think I sent you the graph for coming on. There was, I saw this chart where it's like they were making what, a couple hundred million gigabytes of HBM in 2022 and they're now selling like 7 or 8 trillion a year.
- [33:02]
Steve Burke
Yeah. So what's crazy is the HBM bit demand. I think I first saw this on semianalysis, if I remember correctly, when I was at the source site. But the HBM bit demand from Nvidia was recently projected to exceed all HBM bit demand of all other companies combined from 2025.
- [33:28]
Ed Zitron
Good.
- [33:29]
Steve Burke
And that's just Nvidia. And again, you have more wafer area per bit than with DRAM consumed. That counts yield losses. Right. And so like increasingly as they make more and more of this, presumably for Nvidia's devices, you will continue to see consumers really get shafted if there's not new supply online soon. And likewise, if they're focusing all their efforts and resources on HBM for whatever reason, who's to say that the new fabs will even make consumer memory anyway? Right. Like there's, they might just make more hbm.
- [34:09]
Ed Zitron
But the thing is, if they're all built to make. Maybe I'm missing something. They're building this fa, these, these fabs specifically for high bandwidth memory. Behind bandwidth memory is only used really for the thing in the AI bubble.
- [34:22]
Steve Burke
Right.
- [34:23]
Ed Zitron
What they're going to do with all this capacity when it's gone, they would switch it over.
- [34:28]
Steve Burke
They switch the line.
- [34:29]
Ed Zitron
I mean they would. But it's like I Guess they'll just have, aren't they just creating a future nightmare? I mean it's always good to have more capacity for them, I guess.
- [34:39]
Steve Burke
Yeah, I mean I guess it's good to have more capacity. There's a lot of government money floating around too, right. Like Micron got a $5 billion tax break in New York as part of the, I guess big beautiful bill.
- [34:54]
Ed Zitron
But five billion. Micron said they're going to spend 250 billion.
- [34:59]
Steve Burke
Right.
- [35:00]
Ed Zitron
Samsung and SK Hynix have made $2.1 trillion worth of commitments. This just feels like it's, it's almost like they saw what happened in 2021 and 2023, which ended with all of them doing at least $1 billion of write offs. And when they were like, fuck that, we can go bigger.
- [35:18]
Steve Burke
Yeah, well, I mean I do think, personally I think that they are colluding again. I think they are price fixing. Um, it might be through like a parallelism rather than a literal behind closed doors meaning like we're just going to announce our changes in earnings reports and then our friendly competitors will kind of mirror us. And so.
- [35:46]
Ed Zitron
Yeah, yeah, like it's kind of a prisoner's dilemma. Like if they don't raise prices, the other guy will. If they, and if they don't build capacity, the other guy will. They won't get the long term deals and all that.
- [35:57]
Steve Burke
Yeah. And also the wafers themselves. I have some interesting numbers I wrote down, but I was looking up when you were asking about hbm. I went and pulled up some of the original coverage I did of HBM which started to come online or at least was being actively developed somewhere around, I don't know, 2013 plus or minus a bit for AMD GPUs. So yeah, when AMD was working on Fiji and its Fury GPUs, they debuted HBM actually for consumer devices. They had HBM on Vega and on a couple other architectures in like the 2015 to maybe 2018 area, plus or minus a year or two and massively expensive, just like it is today. The power efficiency was great, which is really why they used it, although they were bandwidth starved too. But I pulled up, I had done some reporting at the time where I spoke to a bunch of the people in the know in the industry and at the time, 2017 or so, 2016 area, the HBM2 memory for one of the devices should have cost around $150 cost for them to buy and the interposer and the packaging should have been another $25 175. And this is. These are, you know, this is old technology now. It's, I'm sure, a lot different. But the point of bringing it up is that if you compare sort of time for time and at the same capacity at the time, it would cost AMD 175 bucks or so to put HBM on its device. Whereas with GDDR memory, the non HBM stuff, they would have been at somewhere around like $68.
- [37:51]
Ed Zitron
So they would be just so. I guess the thing is they absolutely would make more money selling DRAM or, sorry, DDR like regular people. Ram. It's just that right now they have the business to kind of. It's not just shitty, it's not these bullshit video cards for loser Gamers. It's selling AI GPUs. The big strong boys.
- [38:12]
Steve Burke
Yeah, right. Yes, like Sam Altman and yes, the
- [38:16]
Ed Zitron
big strong hunky men like Daario Amadei.
- [38:20]
Steve Burke
Right, Right. Yes. Yeah. I've never, by the way, I don't think I've ever seen someone spread so much fear so anxiously as him.
- [38:32]
Ed Zitron
It's pathetic. Yeah. Also you haven't. Here's a random thing as well for this question to the listeners and to you as well, Steve. You ever see anyone on. You seen this weird habit of Silicon Valley people of using AI now to add muscles to guys? I have seen this at all. What's that about? One of the weirdest things I've seen in the tech industry's history. And there's a lot of weird shit.
- [38:56]
Steve Burke
I don't know if it's just. Well, they're not used to working for intellectual property at this point. They just harvest it. So why work for the muscles either?
- [39:03]
Ed Zitron
Well, it's just, it's really strange. Like I, like, I think the tvpn, the technology, the Blowjob Brothers network, like, they, they, they do it with like Dylan Patel, who's just like a regular sized guy and it's just, it's. Sorry, I've just realized that's weird. But then I saw someone do it for Dario Amade the other day and this is like your body's your body. I don't judge people for, for like how they look, but at the same time, Dario Amade is not like a like fifth course of steroids guy. Like, it's just the way. It's the weirdest thing I've ever seen.
- [39:36]
Steve Burke
Well, I saw. Did you see the story just recently of the copper thieves stealing shit from data centers too?
- [39:45]
Ed Zitron
No. That was average, better offline listener there. Yep.
- [39:51]
Steve Burke
Yeah. They probably were in one of your T shirts.
- [39:56]
Ed Zitron
Oh, God, no, I disavow them.
- [39:58]
Steve Burke
Yeah. There's a title of. Of thieves stealing copper from data centers. I was just like, oh, I mean, it's really. I guess there's no honor among thieves. You know, it's just thieves stealing from thieves at the time.
- [40:13]
Ed Zitron
It's also inevitable at this point because you make these giant things full of earth metals and then you put them in neighborhoods, usually with, like, disadvantaged farm neighborhoods or like, distressed towns in Texas. You're like, oh, I wonder what will happen with the other business in the area.
- [40:30]
Steve Burke
I wonder what'll happen when we screw over all these people and, like, mock
- [40:35]
Ed Zitron
them via the media constantly. Anyway, back to. Back to ram. So is this something that's going to start affecting, like, storage so hard?
- [40:47]
Steve Burke
Yeah, yeah. So you mean like actual.
- [40:52]
Ed Zitron
Yeah, like nan. Like solid state drives and the like.
- [40:56]
Steve Burke
Yes. So it's already affecting it. Storage is made at the same fabs, for the most part as memory, with basically the same tools and mostly by the same companies, although there's like one or two differences. But for the most part it's the same people and tools, and so definitely one affects the other. Anyway. But storage in general hasn't gone up as violently as memory, but it has gone up. Some of the SSDs we had bought previously, I was just checking this actually, for like 90 bucks maybe about a year ago, are now closer to like 180, 190 and.
- [41:39]
Ed Zitron
Jesus Christ.
- [41:40]
Steve Burke
Yeah, let me pull up a chart here.
- [41:42]
Ed Zitron
That's. This is genuinely, like, I think. I don't know if I'd say I do anything that's activism, but, like, I think people just need to know this is AI's fault.
- [41:53]
Steve Burke
Yes.
- [41:53]
Ed Zitron
And. And the worst part is it's not even AI's fault because they need these data centers because they're taking forever to build. It's like you can access Claude and chat GPT. You don't. There's no one. No one's, like, unable to log on because there's not enough data centers. Nothing's being stopped. They're just like, no, we need to do. We need to buy. Buy the chips need to build the data centers for some reason.
- [42:15]
Steve Burke
Yeah, it's. Yeah, there's not like a queue. I mean, I guess they're. Maybe they make the argument of like, we're trying to make it better and the models will be more complicated and that requires.
- [42:25]
Ed Zitron
When's that going to happen?
- [42:26]
Steve Burke
Yeah, the storage, though. So looking at an average price chart for 4 terabytes of solid state drive storage. NVMe on PC part picker, which averages it, they have the pricing at around, it looks like maybe about $270 in January last year and now it's somewhere
- [42:50]
Shaquille O'Neal (Ad Voice)
around,
- [42:53]
Steve Burke
somewhere around 800, $900.
- [42:55]
Ed Zitron
And that's for what kind of storage
- [42:57]
Steve Burke
that is for 4 terabytes. So relatively large capacity, which is going to be affected the most.
- [43:04]
Ed Zitron
Jesus Christ.
- [43:05]
Steve Burke
Yeah, and this is where this is interesting too, because one of the ways you'll see consumers getting shafted that's not as obvious is some of the modern devices that should be your next sort of improvement upgrade on past generations. They're actually coming down in capacity. So I haven't looked at the exact device names for a while, but we ran a report a while ago talking about some of the phones and laptops that have shifted from say a prior model of 12 or 16 gigabytes down towards 8 for memory. There's decrease in storage capacity as well.
- [43:41]
Ed Zitron
Yeah, that's fucking. So everyone just suffers here. And it's pretty like there's Microns, sk, Hynix, Samsung. They could just, they could have not done this, just to be clear, just so they could have sat with like 70% margins probably.
- [43:56]
Steve Burke
They're already colluding anyway, in my opinion. So yeah, they could, they could collude in a different way.
- [44:01]
Ed Zitron
It's just, it's so fucking straight. Well, I mean, it's actually. No, that's not fair. This isn't strange at all. This is exactly like, this is exactly what companies like this.it's this kind of vulgar kind of chancerism. And their argument, from what I understand is, well, memory is cyclical, so we need to fill our boots when we can.
- [44:24]
Steve Burke
And if you're calling something vulgar, then it's pretty vulgar.
- [44:27]
Ed Zitron
Yes. Just to be clear, as the vulgarest man in tech, and that is a word now. But the thing is though, just to be clear, that's their argument though, that because things are good now, they can charge what they want so they can fill their coffers for the future.
- [44:41]
Steve Burke
Yeah, I think so. And I mean, you see it affecting. I think that's, that's probably their argument, I think on the consumer side too. Even a company like Lenovo, which is not a manufacturer of memory, but they buy it and they put it in stuff. I'm not sure if there, there may be this, I don't know for fact, but there may be a benefit for some of these companies as well for a few reasons. One is there's a lot fewer. It kind of reminds me a little bit of COVID when all the stores that were 24 7, all the grocery stores and whatever, suddenly stopped being 24 7. And at least where I am, not one of them has gone back. And I think that the memory capacity kind of equivalent here is this offers a little bit of a reset.
- [45:30]
Ed Zitron
And so with Lenovo, lower those expectations.
- [45:34]
Steve Burke
Exactly. Yeah. And now your next upgrade is more exciting. And what I noticed with Lenovo when I was buying a laptop was they had quietly snapped out of existence their 64 gigabyte model memory system memory of the device I was looking at and they only had 32. And I think is the memory hard
- [45:54]
Ed Zitron
soldered onto it as well?
- [45:56]
Steve Burke
It is, yeah. You can upgrade.
- [45:57]
Ed Zitron
Oh, so you just can't upgrade. You're just stuck. That's insane.
- [46:01]
Steve Burke
Yeah. And so I think what happens there for them, you know, in their favor, I might argue. Well, they can't. They're having trouble getting supply just like everyone else. That's probably true. But against them if they've got 64 gigabytes of memory, because that's just one part of the. The total bomb for a laptop they sell. They might rather sell two people two laptops at 32 gigabytes. Right. Where they can get the markup on the whole thing. Right. Rather than one guy, a 64 gigabyte laptop where they're only marking it up, hopefully, whatever the difference in the memory is. So I think you see some of that here too where there's.
- [46:38]
Ed Zitron
Well, they're just going to use it as a chance to reset what people expect. And just also prices are probably never coming down.
- [46:45]
Steve Burke
Right. Lenovo itself, funny enough that I was using them in this example, just like two weeks ago at ISC said that prices will probably. The word they used was never come back down to what they were last year. And so yeah, I think they're truly evil era.
- [47:06]
Ed Zitron
Just like a disgusting era full of horrible perverts. Because it's so frustrating as well. Because America has price fixing laws.
- [47:16]
Steve Burke
Yeah.
- [47:17]
Ed Zitron
Like we have price gouging laws. Like we have means of doing this. We just don't do it because obviously
- [47:23]
Steve Burke
of capitalism and they've been enacted, you know, like the DOJ itself busted these same companies in the early 2000s.
- [47:31]
Ed Zitron
Yeah, that was before. That's before we had social media for psychopaths to talk about stocks all day. Now we need to, now we need, we need just borderline corruption or real corruption in everything. That's the only way to get things done. These days.
- [47:43]
Steve Burke
And I think also there's probably incentive to no administration of any party wants the economy to fail on their watch. And I think if you're worried about a bubble pop, and especially if maybe spooking investors with the DOJ investigation or something might trigger part of that, I don't know, it just seems like you wouldn't be incentivized to not probe too much
- [48:13]
Shaquille O'Neal (Ad Voice)
Foreign.
- [48:22]
Ed Zitron
Comes from Square, the business platform that helps sellers become neighborhood favorites. Whether you're gearing up for a busy season or just trying to keep up with everyday demand, Square keeps your business running smoothly from payments and POS to online orders, inventory, staff and more all in one place so you can focus on your customers, not your to do list. I like Square a lot as a customer and from talking to various business owners who use it. Everybody seems really happy with how easy and intuitive everything is. Business owners don't have to juggle a bunch of tools and their hardware and software are designed to be easy to use, so day to day options feel a lot simpler with three clear plans depending on the tools you need. Sellers who use square see 9% higher sales on average. Square helps you run your business more smoothly, bringing payments, operations and insights together in one place so you're ready for whatever's next. Right now, listeners can get up to $200 off square hardware when you sign up at square.com go betteroffline that's s q u a r e dot com go betteroffline get started with Square and build a setup that works the way
- [49:26]
Shaquille O'Neal (Ad Voice)
you do Snoring, Gasping for air during sleep Daytime Sleepiness I'm Shaquille o' Neal and this shouldn't be anybody's experience. Ask your doctor about Zepbound Tirzepatide, the first and only FDA approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.
- [49:43]
Zepbound Medication Announcer
Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5 or 15mg injection. Zepbound contains Tirzepatide and should not be used with other Tirzepatide containing products or any GLP1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't cheer needles or pens or reuse needles. Don't take if allergic to it or if you or someone in your family had medullary thyroid cancer or if you've had multiple endocrine neoplasia Syndrome Type 2. Tell your doctor if you get a lump or swelling in your neck, stop, step bound and call your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia. If you're nursing pregnant, plan to be or taking birth control pills. Taking zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea and vomiting, which can cause dehydration and worsen kidney problems.
- [50:51]
Shaquille O'Neal (Ad Voice)
Talk to your doctor, call 1-800-545-5979 or visit zeppboundlily.com
- [51:00]
Harley Davidson / Shell Ad Voice
if you sometimes turn down the podcast just to hear the hum of your engine, then Shell has the fuel for you. Shelby Power Nitro plus fuels every drive from the Pacific coast to the high desert with a fuel like no other. It contains active coating ingredients that clean and protect for longer lasting engines. Because your car's engine matters, that means more protection with active ingredients for longer lasting engines. Shell V Power Nitro Plus Premium Gasoline Engine performance that lasts. Chances are you're not far from a Shell station. Find it using the Shell app formulation unique to Shell compared to Minimum detergent gasoline with continuous use of Shell V Power Nitroplus and gasoline direct injection engines. Actual effects and benefits may vary. See Shell Us More Protection for more information.
- [51:58]
Groons Supplement Announcer
This is Radhi Deblookia from a really Good Cry. Most wellness routines fail somewhere between day one motivation and where did I put that powder? That's where Groons comes in. Groons packs over 20 vitamins and minerals, greens and prebiotics into a snack pack of ten tiny delicious gummies. No powders, no pills. Just a simple way to support gut health, beauty, energy immunity, recovery and cognition. Plus, the ingredients in Groons are backed by over 35,000 research publications. It's a convenient, comprehensive formula designed for real life. Get up to 52% off with code Cry at Grunes Co. That's Code Cryo.
- [52:42]
Ed Zitron
But isn't this going to cause just or already is causing hyperinflation within all electronics related products. Because it seems that these companies are fully dedicated to the graveyard smash of making everything more expensive forever. And at some point that will start crushing all consumer electronics.
- [52:59]
Steve Burke
Yeah, I think it will. You know, for some things that can migrate more to software as a service and hardware As a service, I think there's an end game there for some of these companies where.
- [53:11]
Ed Zitron
Tell me more.
- [53:13]
Steve Burke
I think if it's okay, we crushed demand for the gaming GPUs market because filthy poor casual gamers can't afford our big strong GPUs that we need for data centers. I think if you crush that market, there is potentially an out in the form of cloud gaming. Or maybe a better example where you don't have latency as an issue would just be as a company. If you're worried about consumers getting systems that are powerful in their hands and using LLMs at home or whatever, if that is suddenly out of reach because the memory is too expensive and the GPUs are too expensive, all right, I guess they come crawling back to Claude or ChatGPT. So I do think not everyone's going to be able to grab that parachute. But I think that moving services to cloud oriented services that you pay for every month is a way that they can capture the people, which is going to be most of them at some point who can't afford to actually own the full device to do stuff like that.
- [54:23]
Ed Zitron
Cloud gaming sucks.
- [54:25]
Steve Burke
Cloud gaming sucks. But also I don't think that's the only place where, you know, I think one of the real considerations, if anyone here is genuine about LLMs and AI being a future, I would think at least companies like OpenAI would be worried about LLMs getting too good if they're locally hosted for like, let's just say the vast majority of basic tasks someone might want. And by all the prices of hardware remaining elevated, it does kind of keep that at bay a little longer.
- [55:01]
Ed Zitron
I just. Because I understand that, and you've said this before, the idea that they want to push people towards not owning anything, you'll own nothing and you'll love it, I think is the phrase and. But at the same time, do you think that that's actually their plan or do you think my, my version of this is much simpler? Which is. Do you think they have one or is this just incredible short term in his thinking?
- [55:25]
Steve Burke
Yeah, I don't think it's the plan. I think it's like the fallback for
- [55:29]
Ed Zitron
the future Google stadia we all know was a huge success.
- [55:35]
Steve Burke
I contributed to the failure of that one. Yeah, that one.
- [55:40]
Ed Zitron
There are 10 people who must be so angry at you. Oh man, I'm sure there are dozens of us.
- [55:46]
Steve Burke
GeForce Now. I had numbers at one point, I don't have them currently, but had a lot of. Actually I think we talked about it on your show because I pulled up their website and they had however many millions of users and both of us were kind of surprised at it. But, yeah, I think gaming is sort of the easy one to point to. I think for a lot of casual users, they might be okay with cloud connected gaming. But I do think there's more services than just gaming that could be sucked into the cloud. Even just stuff like QuickBooks has been the one I've been ranting about recently.
- [56:24]
Ed Zitron
I'm surprised that that isn't already sassed.
- [56:28]
Steve Burke
Well, it basically is, because the desktop version, it used to be a buy it once for $300, then it went to $700, and then they went to $1,500 annually for the desktop version. And you have to log in when you launch it, just like Adobe software.
- [56:45]
Ed Zitron
Oh, good.
- [56:45]
Steve Burke
And now they're killing desktop entirely and you have to go to cloud, which I just abandoned it and went to a free tool instead. But, like, the point being, yeah, I think a lot of these, you know, these services, they do just increasingly go cloud connected.
- [57:03]
Ed Zitron
But the problem is, is cloud connected services still require ram. I mean, just anyone who's ever used an AI tool that's still in your browser. Well, I mean, Chrome itself is a hog, as we all know. And so it's just kind of like if it feels that there's just going to be a point that this escalates to the point that it kills large parts of the consumer electronics industry. I mean, Sony's delaying the next PlayStation. Microsoft is increasing the cost of the next Xbox while firing all the people who know how it works. Just an evil company. I mean, it's.
- [57:36]
Steve Burke
And Machine is a great example too.
- [57:39]
Ed Zitron
I love that. I just got one. I fucking love it.
- [57:41]
Steve Burke
Oh, did you really? Wow.
- [57:42]
Ed Zitron
I really love it. It's just what I. But the thing is, it's also insanely expensive. Like.
- [57:47]
Steve Burke
Yeah, it's unbelievable. Yeah, it's because the Steam machine, we had talked to them and the quote they gave us was amazing, when I'll paraphrase it to the best of my memory, but they were talking about how. I asked them how did it work buying from the memory manufacturers. Like, did you get a contract price or how did you guarantee your memory supply? And the answer was, there are no contracts. And the Valve guy told us they're offered a price by the memory supplier. In this case, the one we got was Hynix. And if they say no to that price, then the quote was they never talk to us again. Which is why I Feel like it is cartel like behavior.
- [58:36]
Ed Zitron
I got some thoughts. I don't think I want to share on the record on that one. That is just. You know what, I'm right back round to just, I hope these companies suffer. I think the memory companies are evil. Like that's just an evil way of doing business.
- [58:50]
Steve Burke
Yeah, it's coercion. Right. Because it's like if the play is, I offer you a price, you say, no, fine, I'll take my supply and sell it to someone else. I'll never even talk to you again. You're now down to two companies you can buy from. Right.
- [59:06]
Ed Zitron
And it's not like. And it's not. And if they'll never talk to you again, it doesn't matter if they build more supply.
- [59:12]
Steve Burke
Right? Yeah. If you're on.
- [59:14]
Ed Zitron
And they're doing that to Valve as well, who were like the like royalty within the PC. It's just this era is just about the companies shitting on the people that made them rich.
- [59:26]
Steve Burke
And it's, you know, the crazy part to me is it's like Valve is not a poor company. You know, they're private, so we don't know how much they have, but they are definitely a multibillion dollar company. And Valve is getting bullied by the trillion dollar companies, which are only the
- [59:47]
Ed Zitron
trillion dollar companies because of the stock speculation.
- [59:50]
Steve Burke
Right? Yeah. Not like actually, but yeah, it's just, it's insane to me because it's of course there same thing. Corsair has no real power in the purchasing and they're almost a billion dollar market cap. Not quite. I don't know if they've. How far they've fallen, but they were at one point a billion dollar market cap and at point being like, these aren't nobodies who want the memory and they're struggling to get the memory suppliers to talk to them. They're like, they're serious players and they need a lot of it, you know. And the response is take it at this price or go fuck yourself. Which is crazy to me.
- [60:28]
Ed Zitron
I was reading about the long term agreements that SK Hynix is presenting and apparently they're considering removing price caps because apparently they do the long term agreements.
- [60:37]
Steve Burke
Yeah, they do.
- [60:37]
Ed Zitron
And then they say, okay, they won't go above this bound so that you don't just get rogered. They're just not doing that anymore.
- [60:45]
Steve Burke
I guess Roger is. I don't think I've seen Roger.
- [60:48]
Ed Zitron
Classic British, beautiful British phrase.
- [60:51]
Steve Burke
I was gonna say when I took British literature before I dropped out of College is the last time I read that. Yeah. I think in the memory supply typically contracts, they do set a ceiling. And then my understanding is the way the contract works, if you're lucky enough to get one, is that you're offered the supply and you have to buy it or you have to pay a penalty. Basically, yeah.
- [61:19]
Ed Zitron
Take or pay, right?
- [61:20]
Steve Burke
Yeah, yeah, that's.
- [61:23]
Ed Zitron
It just feels like the natural end of this is going to be horrifying. It's just going to be. It's going to be because they're going to be sitting on all this high bandwidth memory. And I was having a conversation with a friend of the show, Casey Kagawa yesterday and he was saying that like, well, they'll sell it to someone. And while I agree on that, in theory we're talking about going from a few hundred million gigabytes of HBM to trillions of it. So someone is going to be left holding the bag. Maybe it won't be the memory companies, but there's a situation where Nvidia or someone else is just sitting on the stack of this crap.
- [62:00]
Steve Burke
Yeah. If they can't find devices to put it in and they oversupply, then it'll be the same type of apocalypse we've seen in the past. I mean, in 2016, like typically though, this benefits consumers on the crash inside of the wave because it becomes commoditized, you can get it super cheap. I'm not sure what happens here because one, we've already reset the expectations like we were talking about. So there's always already been a regression in the technology that'll take a few years to kind of get back to where we were. But then also, whatever crash happens next seems like it's not going to be isolated to the memory industry. Right. It seems like it'll be like. I sent you a photo during Computex of Nvidia's advertisement in Taipei that said it all starts here. Do you remember what you replied with?
- [62:53]
Ed Zitron
No, I do not.
- [62:55]
Steve Burke
You replied with it parentheses next Global financial crisis.
- [63:03]
Ed Zitron
It really. Because it's like, think about it. If we have just this glut of high bandwidth memory, how many graphics cards do they realistically make? Because when I was saying hundreds of millions of gigabytes, that was back in 2022. So this was the demand for these things for every games console manufacturer, every PC manufacturer, everyone as of 2022, when the economy was doing a lot better.
- [63:29]
Steve Burke
Right.
- [63:31]
Ed Zitron
And they only needed a few hundred million, we could be sitting on arguably the largest supply glut in memory history. Like you can't unbuild that memory. Right?
- [63:47]
Steve Burke
You can't pass it out, you can't really. There's no way to. You would need an HBM device to put it on. There's no real consumer HBM devices these days and it's not something you'd spin up fast. So yeah, if there's like too much hbm, you don't really have a lot you could do with it other than I guess, sell it for cheaper or something. But like at the end of the day you need something to attach it to. And I mean one thing to think about is part of those numbers, although I don't think all of it, but part of it is that the capacity per device has increased a lot for non consumer devices since 2022. So some of it is accounted for there where you just put more on a device. But then you look at consumer and somewhat notoriously it has remained stuck at 8 gigabytes to maybe 16 gigabytes for a consumer GPU which 8 is barely even enough to play modern games with any kind of reasonably high texture settings. And so you don't have that multiplying effect in consumers, just in data center which all that to say if more supply capacity goes online, if they're able to produce more, but the data center demand slows down or the data center GPU demand slows and they switch back to just consumer dram, they're still going to have too much because the consumer devices are, they don't use that much memory. So I don't know, you finally spec them up maybe, but you'll just have
- [65:25]
Ed Zitron
all of this insane amounts of high bandwidth memory to go. We're just going to get graphics cards with 128 gigabytes of high bandwidth RAM just.
- [65:37]
Steve Burke
Just because they need to put it somewhere. Right?
- [65:38]
Ed Zitron
Yeah, we got to do something with it. We're just going to have a laptop and you'll be able to open 17 or 18 Chrome tabs at once. It's going to be incredible. No, I think, I wonder if there's also going to be a knock on effect of all of this on the used gaming market, like the used PC market.
- [65:55]
Steve Burke
Well that's a really common comment I see people asking about like, oh surely this is going to be good for secondhand in a few years when they retire all these devices or the bubble pops.
- [66:06]
Ed Zitron
Well, I just, I mean just like right now, I mean just people won't be buying new devices.
- [66:11]
Steve Burke
Yeah, well I mean on both of those right now it means that if you go look up RTX 30 series cards from. I don't know, like shit, I think it might be four or five years ago now on ebay. Some of them are like within 20% of what they sold for new. So it's wrecking the used market because it's just like you're paying close to new prices for something that's four years old. So that's not good. And then on the other side of it, none of the data center hardware is useful in consumer. There is no secondhand use case. Yeah, yeah. LPDDR5X is either on some form of server specific CAM card or is soldered to the board so you can't use that. And maybe in China they'll desolder it, you know, and solder it onto new sticks and sell a Frankenstein thin. But. And then the GPU is its hbm so it's, it's attached to the gpu. You can't just, you can't just like take it off.
- [67:11]
Ed Zitron
Well, this is the thing as well when it comes to like this post.com bubble recovery story. This is. I'm glad you brought that up because it's like people like oh yeah, they'll just use it for something else. It'll be useful infrastructure. It's like what useful infrastructure? What are we going to do with all these GP? It's not. You can't run a Blackwell. Like a GB300 is what's a Grace and two Blackwells. You've got over a terabyte of different kinds of rams on that. I love saying rams. And what you're gonna do with that. It's not got, it's not got DisplayPort. Yeah, it's not gonna do anything. It's still. It's built for one thing.
- [67:50]
Steve Burke
Right. Maybe a local AI model or whatever, but anything reasonable you couldn't do that
- [67:56]
Ed Zitron
unless it was in a consumer hardware shell. Yeah, you assume you need like a dishwasher plug for it or the washing machine plug even.
- [68:03]
Steve Burke
Like. Yeah, kind of. You probably need 240 volt.
- [68:07]
Ed Zitron
Jesus Christ. People really, people need to do some do. Some actually like reading about this because it's like they need to realize that this can't go anywhere else like this just we're just going to have racks of these things and it's not like in the future they'll be cheaper to use.
- [68:24]
Steve Burke
I think that the. If the dot com era argument of infrastructure was dark fiber or something where the fiber's in the ground, it's just, it's not used because all the Companies went belly up. Eventually they used it. Maybe that's your argument there. I really, I agree with you. I don't think it works for this one because the closest thing we have to an infrastructure gain maybe is power. Except the problem of they're not really bringing more online fast enough. And it's, it's, at least currently it's not helping the prices for the rest of us. Like, almost everyone's had their power costs go up lately. So maybe that would be the advantage. If you're like, because of data centers, we brought back nuclear and we have shitloads of solar and wind and whatever. But that's not what we're doing. We're putting snazz turbines on the roof,
- [69:14]
Ed Zitron
you know, and I don't know, it's also, what if the power doesn't. What if the power gets built and the demand isn't there? It's just there's so many things that could go wrong here. And I think people just kind of. I think the reason that this is all coming to a head is because we're finally facing the physical problems of this era. Like there's only so much capacity, there's only so. There's only so much money, there's only so much power, there's only so much silicon. At some point this all has to break and it might break everything.
- [69:47]
Steve Burke
Yeah, I think. I don't know what the. I don't know what the Enron moment will be. You know, I'm not sure where it'll tip, but it does seem inevitable. But I don't know, it could be a year. It could be several years. Right? Like, I have no idea.
- [70:08]
Ed Zitron
It could just. It feels like the moment the, the vibes shift. Because the trigger I'm looking for is that Capex pullback. But what scares me somewhat is the Nvidia is the, I think what, 55, 65% of all high bandwidth memory demand, all for AI GPUs. That just feels like a single point of failure.
- [70:30]
Steve Burke
Yeah, I think Nvidia, I mean Nvidia itself. Jensen Huang himself said of core weave that without Nvidia there is no core weave. You know, like if I remember correctly, that was. I'll go dig that up. But they, you know, they create the circle. Nvidia is part of the circle and it's. Yeah, if anything happens to them, then all of it falters and they are a kin maker and.
- [71:08]
Ed Zitron
Yeah, but they're also going to be the king loser. I think by the end of this just, it kind. It's just so fucking yeah, it's so fucking frustrating as well because I feel like if we'd have slowed this down in 2024, we could have avoided this. But everyone was like no, we need to go further and harder and faster and spend even bigger and more amounts. But one final question. Surely with the increase in high bandwidth, like actually maybe it's two questions in one, the memory companies are kind of have Nvidia over a barrel too, don't they?
- [71:43]
Steve Burke
In the sense that Nvidia doesn't really have alternatives. But Nvidia is also heavily involved in the R and D for all this new memory. So they were involved in the R and D for GDR7 G5X and for the new HBM options. And so like over a barrel. I think you could make that argument. But I also think that Nvidia is more likely pulling a lot of those strings despite being the customer to very few suppliers.
- [72:17]
Ed Zitron
Right, but at the same time, doesn't this just mean that Nvidia's prices are going to get linearly more expensive the longer this goes on?
- [72:25]
Steve Burke
Yeah, I do think, I do think the prices go up. I mean we're, you know, with Nvidia on the consumer side too, you can look at that as a gauge. They were supposed to launch their refresh of consumer GPUs like a year ago or something almost and not quite a year ago at close. And like rumors were end of 2025, then it was first quarter 2026 and then the rumors were they were all canceled. And the reason for that is because this particular type of refresh they call the Super Series, normally you see an increase in memory capacity at roughly the same price or you see a decrease in price at the same capacity. And right now neither of those things is possible. And so Nvidia hasn't shipped the card. It may come out at some point, but for now they've delayed that indefinitely. And so to your point, it does start to self cannibalize right where they are the reason that their own refresh for consumer can't come out.
- [73:22]
Ed Zitron
And also but regular the cost of the things they're already making, the current generation will go up.
- [73:29]
Steve Burke
Yeah, well the current generation has already gone up in terms of real world pricing and officially they haven't changed their MSRP from launch. But it's, I mean a lot of this stuff, the 50 90s, I guess technically sometimes you can get them at MSRP, but more often they're like,
- [73:52]
Zepbound Medication Announcer
I
- [73:52]
Ed Zitron
mean like the AI GPUs.
- [73:54]
Steve Burke
Oh yeah, I mean that I would
- [73:57]
Ed Zitron
just like, yeah, all of them will go. It just feels at some point the money's gonna run out and it's. The longer it goes, the worse it will get.
- [74:05]
Steve Burke
Well, and then you get the weird leaseback stuff, right? Like with Meta and the gpu.
- [74:09]
Ed Zitron
Oh yeah. And all the SPV shit. What a horrible era. Truly awful. I think that's a, that's a great place to end it for us, Steve. Where can people find you? What you working on at the moment? I know you have some sort of campaign, a dystopian campaign you want to.
- [74:25]
Steve Burke
Yeah, we do have our AI Dystopia coverage. We're doing. We have a. We're trying something new. We do these documentaries that are like three hours long and we're trying something new and doing a short one. So we're doing two 30 minute ones coming up and one of them is on the hard drive Cartel, which is pretty interesting.
- [74:41]
Ed Zitron
Nice.
- [74:42]
Steve Burke
And the other one is on this memory class action lawsuit. We read through all the 118 pages of the filing and, and did a bunch of history research. So those are coming up within the next week on Gamers Nexus and we'll
- [74:54]
Ed Zitron
get the links in there. I don't know what I'm going to be doing next week on the show because I'm recording this a little early. I'll have a monologue for you on Friday though. I have been Ed Zutron. This is Better Offline. You know where to find all my stuff will be in the links. Thank you so much for listening. Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matosowski. You can check out more of his music and audio projects@matosowski.com m a t t o s o w s k-I.com you can email me at ez betteroffline.com or visit betteroffline.com to find more podcast links and of course my newsletter. I also really recommend you go to chat wheresyoured at to visit the Discord and go to R betteroffline to check out our Reddit. Thank you so much for listening. Better Offline is a production of Cool Zone Media.
- [75:51]
Tremphya Medication Announcer
For more from Cool Zone Media, Visit
- [75:53]
Ed Zitron
our website coolzonemedia.com or check us out
- [75:56]
Tremphya Medication Announcer
on the iHeartRadio app, Apple Podcasts or wherever you get your podcast.
- [76:21]
Ed Zitron
He's dribbling the ball with everything on the line. He's driving down the pitch. He's facing price hikes and cuts past him carrier contracts, tries to block him.
- [76:27]
Steve Burke
Oh, he leaves him in the dust.
- [76:28]
Ed Zitron
He's at the edge of the box. He cuts past the nonstop group chat, trash talk. He clears on goal. He shoots no unlimited data for $25 a month forever. Visit your local Boost Mobile store today
- [76:41]
Zepbound Medication Announcer
to get unlimited data with a price that never changes. Boost mobile after 30gb, customers may experience lower speeds.
- [76:48]
Harley Davidson / Shell Ad Voice
Customers will pay $25 a month as
- [76:49]
Steve Burke
long as they remain active on the boost.
- [76:50]
Harley Davidson / Shell Ad Voice
$25 unlimited plan snoring gasping for air
- [76:54]
Shaquille O'Neal (Ad Voice)
during sleep Daytime sleepiness I'm Shaquille o' Neal and this shouldn't be anybody's experience. Ask your doctor about Zepbound Tirzepatide, the first and only FDA approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.
- [77:08]
Zepbound Medication Announcer
Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5 or 15mg injection. Zepbound contains Tirzepatide and should not be used with other tirzepatide containing products or any GLP1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't share needles or pens or reuse needles. Don't take if allergic to it or if you or someone in your family had medullary thyroid cancer or if you've had multiple endocrine neoplasia Syndrome Type 2. Tell your doctor if you get a lump or swelling in your neck. Stop zepbound and call your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia. If you're nursing pregnant, plan to be or taking birth control pills. Taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea and vomiting, which can cause dehydration and worsen kidney problems.
- [78:15]
Shaquille O'Neal (Ad Voice)
Talk to your doctor, call 1-800-545-5979 or visit zepbound Lilly.com if you want all
- [78:24]
Ed Zitron
of your data in one place. If you want a single home for all of your entities. If you want to spend more time working and less time searching, you need the Intuit erp. I know because I'm Damon John and I run my growing business on Intuit enterprise suite, the AI native ERP that's powerful, painless and proven. Learn more@intuit.com ERP it's called soccer. It's called football. Soccer, football.
- [78:59]
Steve Burke
Domino's Best deal ever.
- [79:00]
Ed Zitron
Lets you get any pizza including stuffed crust with any toppings for 9.99. We can agree on that? Yeah, fully. So pineapple? Don't ruin it. Get any pizza including stuffed crust with any toppings for 9.99. Finally something everyone can get behind. And if the refs disagree, that's between them and Domino's, which means the only thing left to fight over is who's ordering. Prices higher for some locations. Excludes XL and specialty pizzas. Select this offer from 615 to 726 online only. Size availability varies by crust type. Max 7 toppings 6 for pan and New York style crust. Minimum purchase required for delivery. Prices, participation, delivery area and charges may vary. This is an iHeart podcast.
- [79:43]
Steve Burke
Guaranteed Human.