1 00:00:03,140 --> 00:00:09,700 Ejaaz: We're not even a week into 2026 and AI's biggest crisis is already underway. The battle for memory. 2 00:00:09,940 --> 00:00:13,200 Ejaaz: What if I told you this ugly piece of plastic, a graphics card, 3 00:00:13,320 --> 00:00:18,240 Ejaaz: is now worth $4,000 when it was only worth $500 literally two months ago? 4 00:00:18,480 --> 00:00:23,540 Ejaaz: The reason? AI is consuming the entire memory chip supply and it's leaving behind 5 00:00:23,540 --> 00:00:27,200 Ejaaz: a $100 billion hole that needs to be filled ASAP. 6 00:00:27,400 --> 00:00:30,120 Ejaaz: You see, memory is a really crucial component for AI models. 7 00:00:30,280 --> 00:00:34,520 Ejaaz: It helps them store and access intelligence very much like how our human brains work. 8 00:00:34,660 --> 00:00:38,000 Ejaaz: In fact, it's so important that companies like NVIDIA and Google spend tens 9 00:00:38,000 --> 00:00:42,180 Ejaaz: of billions of dollars each year just on memory to build their GPUs. 10 00:00:42,300 --> 00:00:46,840 Ejaaz: The issue, though, is that manufacturers of memory like Samsung and Micron are 11 00:00:46,840 --> 00:00:50,980 Ejaaz: running out of supply, which means that prices for these things are skyrocketing. 12 00:00:51,080 --> 00:00:55,380 Ejaaz: In fact, it's so bad that companies like Google and Microsoft have each fired 13 00:00:55,380 --> 00:00:59,260 Ejaaz: their executives that live out in Southeast Asia because they weren't able to 14 00:00:59,260 --> 00:01:01,580 Ejaaz: secure capacity for 2026. 15 00:01:02,200 --> 00:01:06,540 Ejaaz: Everyone thought that GPUs was the main commodity to win the AI race, 16 00:01:06,620 --> 00:01:08,640 Ejaaz: but turns out it's actually memory. 17 00:01:08,880 --> 00:01:12,060 Ejaaz: Josh, you're kind of on the front line for this kind of stuff. 18 00:01:12,180 --> 00:01:15,420 Ejaaz: You've had experience like building out custom PCs and stuff, 19 00:01:15,420 --> 00:01:18,220 Ejaaz: and you've been tracking like the memory prices for a while. 20 00:01:18,220 --> 00:01:19,720 Ejaaz: Now, what's your take on this? 21 00:01:19,860 --> 00:01:23,560 Josh: This story for me hits very close to home because I've spent so much time building 22 00:01:23,560 --> 00:01:27,640 Josh: custom computers, custom PCs. I love gaming. That was my thing. And... 23 00:01:27,880 --> 00:01:30,680 Josh: Seeing this is really disappointing because throughout history, 24 00:01:30,840 --> 00:01:33,720 Josh: there's always been these reasons why my GPUs have gotten so expensive. 25 00:01:33,940 --> 00:01:36,960 Josh: First, it was for like crypto mining. Now it's for AI. 26 00:01:37,260 --> 00:01:42,760 Josh: And all the supply chain crisis that is downstream of PC gamers is such an annoying thing to deal with. 27 00:01:42,760 --> 00:01:45,820 Josh: There's this cool chart that i'm going to show on the screen right here which shows the. 28 00:01:46,400 --> 00:01:49,100 Josh: Ddr5 ram over time and i guess what i could do is kind 29 00:01:49,100 --> 00:01:52,160 Josh: of highlight why you need ram in a computer there's a 30 00:01:52,160 --> 00:01:55,080 Josh: few parts there's the case that holds it there's the power supply there's the 31 00:01:55,080 --> 00:01:58,860 Josh: gpu and the cpu which you think of as the brains and then there's memory and 32 00:01:58,860 --> 00:02:02,480 Josh: there's two types of memory there's one that you could think of as short term 33 00:02:02,480 --> 00:02:06,340 Josh: which is ram and there's one long term which is your storage what we're looking 34 00:02:06,340 --> 00:02:12,600 Josh: at here is the price of ram ram is the short term fast memory that's required 35 00:02:12,600 --> 00:02:13,860 Josh: to do a lot of heavy compute things. 36 00:02:13,940 --> 00:02:17,020 Josh: So if you think of your computer as a kitchen, maybe it's like the GPU and the 37 00:02:17,020 --> 00:02:20,400 Josh: CPU is the chef, the RAM is the countertop space where the ingredients are laid 38 00:02:20,400 --> 00:02:22,840 Josh: out, and then your storage is in the pantry somewhere else. 39 00:02:22,980 --> 00:02:26,280 Josh: The problem is that this countertop space where you quickly work on, 40 00:02:26,760 --> 00:02:29,960 Josh: very valuable and a lot of people really want that precious countertop 41 00:02:29,960 --> 00:02:32,880 Josh: space and what we're seeing here is the price of 42 00:02:32,880 --> 00:02:35,680 Josh: a 232 gigabyte sticks of ram which 43 00:02:35,680 --> 00:02:40,280 Josh: is very standard for a computer going from 200 to 800 44 00:02:40,280 --> 00:02:44,160 Josh: over the last couple of months and there's this great example of this post from 45 00:02:44,160 --> 00:02:47,920 Josh: this guy levels who we'd love following on twitter he was talking about his 46 00:02:47,920 --> 00:02:52,500 Josh: experience where he actually bought two sticks of ram for 64 gigabytes a few 47 00:02:52,500 --> 00:02:58,600 Josh: months ago at 350 and now they are $2,500 for that same exact thing. 48 00:02:58,720 --> 00:02:59,880 Josh: The markup is incredible. 49 00:03:00,040 --> 00:03:04,720 Josh: So if you are buying a PC, building a PC, or if you're buying any sort of consumer 50 00:03:04,720 --> 00:03:08,860 Josh: hardware, the idea is that these costs are going to have to find their way into the market somehow. 51 00:03:09,240 --> 00:03:12,520 Josh: And they're probably going to be hitting you in the wallet right where it hurts. 52 00:03:12,920 --> 00:03:18,080 Ejaaz: So I want to pause for a second and kind of rewind five months ago to when the 53 00:03:18,080 --> 00:03:19,460 Ejaaz: rumblings of all of this began. 54 00:03:19,600 --> 00:03:22,680 Ejaaz: Because to be frank, this kind of took me by surprise. 55 00:03:22,820 --> 00:03:25,760 Ejaaz: I didn't realize that memory was such a crucial component, more so that there 56 00:03:25,760 --> 00:03:27,640 Ejaaz: was a supply crunch for it. 57 00:03:27,920 --> 00:03:31,280 Ejaaz: So around five months ago, we were kind of like winding down the year. 58 00:03:31,520 --> 00:03:35,220 Ejaaz: You know, OpenAI probably announced their thousandth partnership and NVIDIA 59 00:03:35,220 --> 00:03:36,620 Ejaaz: launched their next GPU or whatever. 60 00:03:37,460 --> 00:03:42,140 Ejaaz: And we were reaching a point where some analysts on Wall Street started to sound 61 00:03:42,140 --> 00:03:48,080 Ejaaz: the alarm on prices of memory going up, but it didn't appear in GPUs or in any 62 00:03:48,080 --> 00:03:49,400 Ejaaz: part of the AI world, Josh, 63 00:03:49,760 --> 00:03:53,820 Ejaaz: it started appearing in consumer electronics or the cost of these graphic cards 64 00:03:53,820 --> 00:03:55,100 Ejaaz: that you were just talking about. 65 00:03:55,400 --> 00:03:58,600 Ejaaz: And so they started saying, well, this is going to eventually trickle down into 66 00:03:58,600 --> 00:04:01,160 Ejaaz: GPUs because they require a lot of memory. 67 00:04:01,480 --> 00:04:05,960 Ejaaz: So therefore, GPU cost is probably going to go sky high. So I started looking 68 00:04:05,960 --> 00:04:08,160 Ejaaz: into this and this tweet really summarizes this well. 69 00:04:08,560 --> 00:04:14,920 Ejaaz: Did you know that 80% of the average material cost to build a GPU is memory? 70 00:04:15,490 --> 00:04:19,590 Ejaaz: That is just an insane amount of like materials that you need to kind of like hike this thing up. 71 00:04:19,750 --> 00:04:23,070 Ejaaz: And so when you're looking at the cost of prices of these consumer electronics 72 00:04:23,070 --> 00:04:26,610 Ejaaz: going up, such as we have on the screen here, it starts to really put into place 73 00:04:26,610 --> 00:04:29,230 Ejaaz: that it's not just an AI specific thing. 74 00:04:29,470 --> 00:04:32,990 Ejaaz: This memory is required for pretty much any consumer electronics device that you have available. 75 00:04:33,150 --> 00:04:36,930 Josh: Yeah, Ijez, you mentioned earlier that you were tracking the prices of GPUs. 76 00:04:36,930 --> 00:04:41,470 Josh: You had one that you saved for $2,000 and now the price is like upwards of $4,000 77 00:04:41,470 --> 00:04:45,870 Josh: and you have to update your reference now because the price has gone up. so quickly. 78 00:04:46,130 --> 00:04:49,930 Josh: And I think I want to make this important clarification that it's not just RAM, 79 00:04:50,210 --> 00:04:52,490 Josh: it's a specific kind of memory that AI needs. 80 00:04:52,630 --> 00:04:58,490 Josh: So when people say RAM shortage, they mean the sticks you buy for your PC, which are DDR4, DDR5. 81 00:04:58,730 --> 00:05:02,330 Josh: But the AI world has its own special type of fuel, which is different than the 82 00:05:02,330 --> 00:05:05,390 Josh: things you plug into your computer, and that's called HBM. It's high bandwidth memory. 83 00:05:05,650 --> 00:05:09,390 Josh: And you could kind of think of it, it's like the Formula One pit crew of memory. 84 00:05:09,490 --> 00:05:12,550 Josh: It is the fastest thing that exists because it takes two-dimensional RAM, 85 00:05:12,550 --> 00:05:15,970 Josh: which is generally reserved for DDR4, DDR5, things you put in your computer, 86 00:05:16,640 --> 00:05:19,960 Josh: stacks them together in three dimensions to add a lot of bandwidth, 87 00:05:20,140 --> 00:05:23,840 Josh: a lot of capacity, a lot of additional speed that you wouldn't otherwise find 88 00:05:23,840 --> 00:05:25,620 Josh: in these traditional pieces of RAM. 89 00:05:25,800 --> 00:05:29,600 Josh: And the idea is that there's a lot of downstream effects on consumer products 90 00:05:29,600 --> 00:05:33,440 Josh: that come from this specialized HBM being absorbed by all these manufacturers. 91 00:05:33,700 --> 00:05:41,000 Ejaaz: So basically, each HBM is composed of a stack of DRAM, dynamic random access memory, as you said. 92 00:05:41,300 --> 00:05:46,080 Ejaaz: And it requires a lot of this, Josh. In fact, to create one unit of HBM, 93 00:05:46,300 --> 00:05:50,520 Ejaaz: it requires three times the capacity that it requires to build regular DRAM. 94 00:05:50,600 --> 00:05:52,120 Ejaaz: So why am I talking about these two things? 95 00:05:52,240 --> 00:05:55,700 Ejaaz: Well, DRAM is what you need in pretty much every single electronics device, 96 00:05:55,980 --> 00:05:58,800 Ejaaz: including, drumroll, the Apple iPhone. 97 00:05:59,060 --> 00:06:02,860 Ejaaz: So if you start to think about it, these companies need to start competing for 98 00:06:02,860 --> 00:06:05,860 Ejaaz: the very supply that is limited and that we're talking about right now. 99 00:06:06,140 --> 00:06:10,480 Ejaaz: And so when I think about the likes of NVIDIA, Justin Huang, 100 00:06:10,620 --> 00:06:13,440 Ejaaz: who needs all this memory and DRAM to build out his GPUs. 101 00:06:13,520 --> 00:06:18,280 Ejaaz: And then Apple, surely there's going to be some kind of price hike that levels up into the consumer. 102 00:06:18,580 --> 00:06:21,600 Ejaaz: And that's what we're hearing on the rumor mill here. 103 00:06:21,820 --> 00:06:26,880 Ejaaz: So Apple is releasing their new A20 chip this year, which is the upgrade from the A19 chip. 104 00:06:27,020 --> 00:06:31,400 Ejaaz: And the rumors say that it's going to cost 80% more than the A19 chip. 105 00:06:31,540 --> 00:06:37,080 Ejaaz: Now, I don't see a world where Apple doesn't pass this cost down onto the consumer. 106 00:06:37,200 --> 00:06:41,480 Ejaaz: Because there's now massive competition between basically NVIDIA and Apple as 107 00:06:41,480 --> 00:06:44,300 Ejaaz: to who pays more money to secure the capacity. 108 00:06:44,440 --> 00:06:49,800 Ejaaz: Now, Apple isn't someone that has a small wallet. They have a very large budget. 109 00:06:49,920 --> 00:06:51,260 Ejaaz: They're able to secure this supply. 110 00:06:51,400 --> 00:06:55,700 Ejaaz: In fact, they accounted for 24% of TSMC's revenue in 2024. 111 00:06:55,980 --> 00:07:02,920 Ejaaz: And rumors has it that they've secured 50% of TSMC's a memory packaging capacity in 2026. 112 00:07:03,020 --> 00:07:07,640 Ejaaz: So I think they're still able to compete, but for how long, I'm not entirely sure. 113 00:07:07,880 --> 00:07:10,880 Josh: There's this great example that we're showing on the screen where it shows a 114 00:07:10,880 --> 00:07:14,720 Josh: 64 gigabyte memory package compared to a MacBook Air. 115 00:07:15,040 --> 00:07:18,440 Josh: And the funny thing is the prices are pretty much exactly the same. 116 00:07:18,620 --> 00:07:22,660 Josh: In fact, the MacBook Air only costs $15 more than the sticks of memory. 117 00:07:22,820 --> 00:07:26,720 Josh: So with Apple, you can essentially buy the RAM and get the MacBook for free 118 00:07:26,720 --> 00:07:28,940 Josh: because it is all packaged at the same exact price. 119 00:07:29,020 --> 00:07:34,960 Josh: And it shows that Apple does have this resistance to price impacts felt throughout the market. 120 00:07:35,300 --> 00:07:38,600 Josh: How long will this last? I don't know. I have to assume that Apple, 121 00:07:38,900 --> 00:07:40,220 Josh: like you said, they're very well capitalized. 122 00:07:40,300 --> 00:07:43,640 Josh: They have the ability to shrink their margins temporarily in order to gain more 123 00:07:43,640 --> 00:07:44,820 Josh: market share across the world. 124 00:07:45,040 --> 00:07:49,100 Josh: And if this is the case and the people are either looking to buy a PC or to 125 00:07:49,100 --> 00:07:52,600 Josh: buy a MacBook, and the MacBook is the cost of a single component of the PC, 126 00:07:52,600 --> 00:07:56,100 Josh: it's a very strong and compelling argument to buy Apple products. 127 00:07:56,260 --> 00:08:00,600 Josh: So how much of this increase is going to be felt throughout the products? I don't know. 128 00:08:00,900 --> 00:08:04,300 Josh: I guess the main thing we'll probably see is later this year with new iPhones, 129 00:08:04,480 --> 00:08:07,480 Josh: but they also have some series of Macs that are coming out early this year. 130 00:08:07,600 --> 00:08:10,380 Josh: And I guess we'll just have to wait and see if they're able to maintain this, 131 00:08:10,480 --> 00:08:12,480 Josh: to hold the line, because what a great deal now. 132 00:08:12,580 --> 00:08:16,440 Josh: If you're buying a computer, go buy a MacBook. It's the same price as a single component of a PC. 133 00:08:16,880 --> 00:08:21,740 Ejaaz: I want to push back on one thing, Josh. These are the MacBooks that exist today, 134 00:08:21,860 --> 00:08:24,120 Ejaaz: right? The models are already out. The supply is already out. 135 00:08:24,300 --> 00:08:29,200 Ejaaz: But wouldn't these price changes be seen in the future products that they release? 136 00:08:29,340 --> 00:08:33,040 Ejaaz: Like the next MacBook that they drop, the next iPhone that they drop. 137 00:08:33,160 --> 00:08:36,660 Ejaaz: I think that's where we're going to see the price hikes. Am I missing something here? 138 00:08:36,860 --> 00:08:41,100 Josh: No, it's possible. We'll see. The M5 MacBooks are coming out probably. 139 00:08:41,440 --> 00:08:45,620 Josh: The newer ones are coming out in the next few months. It's rumored to come out in Q1 of 2026. 140 00:08:45,980 --> 00:08:47,460 Josh: So we will have to wait and see. 141 00:08:48,150 --> 00:08:51,490 Josh: Historically apple has been pretty good at resisting these fluctuations and 142 00:08:51,490 --> 00:08:53,410 Josh: smoothing them out over a long period they. 143 00:08:53,410 --> 00:08:53,890 Ejaaz: Might eat the cost 144 00:08:53,890 --> 00:08:57,530 Josh: Perhaps it's it's incremental perhaps they eat the cost in exchange for getting 145 00:08:57,530 --> 00:09:00,610 Josh: larger market share we'll just have to wait and see but they can certainly afford 146 00:09:00,610 --> 00:09:03,450 Josh: it whatever whatever issue may come their way well. 147 00:09:03,450 --> 00:09:08,190 Ejaaz: What's interesting is uh jensen is not eating the cost he's passing that uh 148 00:09:08,190 --> 00:09:12,070 Ejaaz: memory price hike of cost straight down to the consumer so i think the average 149 00:09:12,070 --> 00:09:16,710 Ejaaz: cost of his gpu was like 35k he's now selling them for 45k per unit. 150 00:09:17,070 --> 00:09:17,390 Josh: With hefty margins. 151 00:09:17,870 --> 00:09:20,830 Ejaaz: Hefty, hefty. 80% margin. Don't ever forget that. 152 00:09:21,490 --> 00:09:24,850 Ejaaz: Manvidia is a huge monopoly. But speaking of monopolies, actually, 153 00:09:25,110 --> 00:09:31,550 Ejaaz: I think now's the perfect time to introduce the key players in the memory manufacturing game. 154 00:09:31,870 --> 00:09:37,530 Ejaaz: Now, let's call these the three musketeers. These guys have massive grins on 155 00:09:37,530 --> 00:09:38,990 Ejaaz: their face for many different reasons. 156 00:09:39,350 --> 00:09:45,570 Ejaaz: Number one, they are the primary and only providers of high bandwidth memory 157 00:09:45,570 --> 00:09:51,730 Ejaaz: and DRAM, which is what both Apple and NVIDIA need to build their respective products. 158 00:09:52,250 --> 00:09:57,250 Ejaaz: And Josh, what I'm showing on the screen right now is the timeline of memory 159 00:09:57,250 --> 00:10:02,390 Ejaaz: manufacturers, I think roughly over the last 25 years or so. 160 00:10:02,570 --> 00:10:05,510 Ejaaz: And you'll notice that when you pan from left to right, 161 00:10:05,590 --> 00:10:08,470 Ejaaz: for those of you who are just listening, you grow you go from 162 00:10:08,470 --> 00:10:11,670 Ejaaz: about 11 players in 2000 to three 163 00:10:11,670 --> 00:10:18,430 Ejaaz: players in 2013 and these three players samsung sk hynix and micron are the 164 00:10:18,430 --> 00:10:22,430 Ejaaz: major players that we're going to be talking about today they've had a fantastic 165 00:10:22,430 --> 00:10:26,810 Ejaaz: 2025 josh do you want to do you want to guess what the average price increase 166 00:10:26,810 --> 00:10:28,810 Ejaaz: in their share prices has been over the last year 167 00:10:28,810 --> 00:10:33,910 Josh: Looking at this chart we lost 70 of the players over the last 20 years, 168 00:10:34,110 --> 00:10:39,510 Josh: which means the remaining 30% are capturing 100% of this unbelievable demand 169 00:10:39,510 --> 00:10:41,750 Josh: in the highest priced index. 170 00:10:42,470 --> 00:10:46,390 Josh: And industry in the world, which means surely they're up a good amount. 171 00:10:46,550 --> 00:10:51,330 Josh: How much? I don't know, but I would guess like perhaps Robin Hood or Palantir levels above. 172 00:10:51,730 --> 00:10:55,970 Ejaaz: You might be right. So I'm showing Micron Technology, which is the US ambassador 173 00:10:55,970 --> 00:10:58,930 Ejaaz: of memory supply right here. We're going to go USA over here. 174 00:10:59,330 --> 00:11:02,750 Ejaaz: Their stock is up 250% over the last year. 175 00:11:02,950 --> 00:11:07,770 Ejaaz: If we peek over at Samsung Electronics, which is the largest market cap already 176 00:11:07,770 --> 00:11:12,710 Ejaaz: out of all three of these companies, their stock is up a massive 150% over the last year. 177 00:11:12,790 --> 00:11:16,890 Ejaaz: And the same is for SK Honex, which is a Korean or Southeast Asian based company. 178 00:11:17,050 --> 00:11:20,790 Ejaaz: The point I'm making is these guys are in the perfect position because they're 179 00:11:20,790 --> 00:11:23,930 Ejaaz: the ones that are able to hike the prices up and say, hey, sorry, 180 00:11:24,030 --> 00:11:27,110 Ejaaz: NVIDIA, you got to pay 80% more, either take it or leave it or I'm going to 181 00:11:27,110 --> 00:11:28,970 Ejaaz: sell it to Apple. And Jensen's like, 182 00:11:29,300 --> 00:11:33,320 Ejaaz: fine, I'll spend that money. I'm fine with that. And Apple's doing the same as well. 183 00:11:33,440 --> 00:11:36,920 Ejaaz: So not only is all their supply booked up, but their supply for the next couple 184 00:11:36,920 --> 00:11:40,520 Ejaaz: of years in 2027 to the end of 2027 is also booked up. 185 00:11:40,760 --> 00:11:44,380 Ejaaz: So then the question becomes, which one of these three players are going to 186 00:11:44,380 --> 00:11:48,720 Ejaaz: fill the $100 billion supply hole that is currently there? 187 00:11:49,180 --> 00:11:51,940 Ejaaz: It's going to be a race between the three of them. Whoever can fill it will 188 00:11:51,940 --> 00:11:56,260 Ejaaz: be the richest and be king made out of this entire memory manufacturer race. 189 00:11:56,760 --> 00:12:00,320 Ejaaz: My bet, Josh, is it's going to be Samsung. 190 00:12:00,960 --> 00:12:06,140 Ejaaz: I have two specific reasons for this. Number one, Samsung has been the biggest 191 00:12:06,140 --> 00:12:08,380 Ejaaz: memory provider for over a decade now. 192 00:12:08,520 --> 00:12:13,640 Ejaaz: And they've been able to navigate this market through memory cycles up and down for decades now. 193 00:12:13,780 --> 00:12:16,480 Ejaaz: They have all the experience and funding to be able to do so. 194 00:12:16,660 --> 00:12:18,120 Ejaaz: Which brings me to my second point. 195 00:12:18,380 --> 00:12:23,460 Ejaaz: They're known as what is called a chaebel in Korea, which stands for basically monopoly. 196 00:12:23,460 --> 00:12:28,840 Ejaaz: They're able to pull funds from all of their other cash-making sectors of their 197 00:12:28,840 --> 00:12:31,540 Ejaaz: business, their electronics business, the mobile phone business, 198 00:12:31,540 --> 00:12:33,920 Ejaaz: to keep the memory business alive. 199 00:12:34,180 --> 00:12:39,880 Ejaaz: And even if it runs to a zero-cost margin type of race, they'll still be able to win and survive. 200 00:12:40,120 --> 00:12:43,640 Ejaaz: And the truth is, whoever survives the memory crunch that they're currently 201 00:12:43,640 --> 00:12:47,380 Ejaaz: in will end up being the winner. So I think Samsung's got a lot of legs here. 202 00:12:47,520 --> 00:12:50,340 Josh: So that's the case for Samsung, but we also have a bold case for Micron, 203 00:12:50,340 --> 00:12:54,540 Josh: which actually exited the consumer business entirely. 204 00:12:55,060 --> 00:12:59,140 Josh: So one of these three major manufacturers left the consumer business, 205 00:12:59,280 --> 00:13:02,880 Josh: meaning if you used to buy Crucial RAM, which is actually the memory that's 206 00:13:02,880 --> 00:13:05,100 Josh: in my computer, they no longer exist. 207 00:13:05,300 --> 00:13:08,640 Josh: They said, see you later. We're going for the big boys. We want the big bucks 208 00:13:08,640 --> 00:13:10,280 Josh: with these AI companies. 209 00:13:10,540 --> 00:13:12,880 Josh: And it's devastating for the 210 00:13:12,880 --> 00:13:15,360 Josh: consumers because this is where you're really seeing the price increase. 211 00:13:15,520 --> 00:13:19,040 Josh: One of these three major players is now gone. They're just catering to the large 212 00:13:19,040 --> 00:13:23,120 Josh: people in the market, but it also means that they are focused on bringing rates down. 213 00:13:23,280 --> 00:13:27,020 Josh: So if you are in the industry for a custom PC or any sort of consumer hardware, 214 00:13:27,510 --> 00:13:31,650 Josh: The apologies need to be made, but also the hope is that them doubling down 215 00:13:31,650 --> 00:13:35,150 Josh: on this will mean that they can produce a lot more and hopefully lower the downstream 216 00:13:35,150 --> 00:13:39,350 Josh: cost to these AI providers, which will then lower the cost down to you, the end consumer. 217 00:13:40,000 --> 00:13:44,560 Josh: They're locked in. If you ever wanted any indication that they're coming for 218 00:13:44,560 --> 00:13:48,080 Josh: Samsung's neck, this is it. They left the consumer market. They're all in on AI. 219 00:13:48,420 --> 00:13:50,900 Josh: And hey, give them a lot of credit. We'll see what happens. 220 00:13:51,180 --> 00:13:55,920 Ejaaz: I think what amuses me the most is just the raw power that these companies wield. 221 00:13:56,580 --> 00:14:01,920 Ejaaz: There was a news story that broke last week that SK Hynix, the third player 222 00:14:01,920 --> 00:14:09,840 Ejaaz: in this memory game, told Microsoft no to their extra requests for capacity in 2026. 223 00:14:10,000 --> 00:14:13,920 Ejaaz: To build their own chips and supply open AI in many different ways. 224 00:14:14,320 --> 00:14:19,100 Ejaaz: They also told Google the week before no as well, which led to that Google exec 225 00:14:19,100 --> 00:14:21,960 Ejaaz: being firing or reports of him being fired. 226 00:14:22,260 --> 00:14:25,560 Ejaaz: So the point of the matter is these three companies are going to control the 227 00:14:25,560 --> 00:14:30,340 Ejaaz: spice for all the Dune fans out there of whether you can build GPUs or whether 228 00:14:30,340 --> 00:14:33,780 Ejaaz: you can build iPhones at a reasonable cost without passing that on to the consumer. 229 00:14:34,080 --> 00:14:38,080 Ejaaz: But it's equally on them to be able to scale supply to be able to meet demand. 230 00:14:38,080 --> 00:14:41,800 Ejaaz: And that is going to be a really important battle to track in 2026, 231 00:14:41,820 --> 00:14:46,220 Ejaaz: which is probably a good point to transition on to the kind of future facing 232 00:14:46,220 --> 00:14:50,000 Ejaaz: section here, Josh, which is like, how does this play out in 2026? 233 00:14:50,300 --> 00:14:52,740 Ejaaz: And what are kind of like the key themes that we're going to see? 234 00:14:52,740 --> 00:14:56,480 Ejaaz: I think the main one is going to be, well, there's going to be a lot of fights 235 00:14:56,480 --> 00:15:02,760 Ejaaz: between all the AI labs and NVIDIA to get their hands on memory capacity. 236 00:15:03,080 --> 00:15:07,100 Ejaaz: And the companies that are able to do this and navigate this well will end up 237 00:15:07,100 --> 00:15:10,280 Ejaaz: being the winning AI companies in 2026, potentially. 238 00:15:10,820 --> 00:15:14,680 Ejaaz: Whatever it may be, OpenAI has taken the first punch or rather delivered the 239 00:15:14,680 --> 00:15:22,860 Ejaaz: first punch, reportedly locking in 40% of global DRAM wafer capacity supply through 2029. 240 00:15:23,040 --> 00:15:26,460 Ejaaz: I don't know how true this is, but I have a feeling this is linked to all the 241 00:15:26,460 --> 00:15:29,520 Ejaaz: partnerships that they were signing with Oracle and NVIDIA and stuff like that. 242 00:15:29,520 --> 00:15:33,220 Ejaaz: So, you know, it might be a bit kind of fluffy, but interesting to see. 243 00:15:33,880 --> 00:15:36,820 Josh: Yeah we find ourselves in this interesting situation where we're always on 244 00:15:36,820 --> 00:15:39,420 Josh: the lookout for these bottlenecks where are there going to be 245 00:15:39,420 --> 00:15:42,380 Josh: problems as we scale these systems and right now the 246 00:15:42,380 --> 00:15:45,260 Josh: largest and most important one outside of 247 00:15:45,260 --> 00:15:48,120 Josh: energy is ram but now we have two now 248 00:15:48,120 --> 00:15:51,060 Josh: we have this memory issue we have this we have this energy issue we 249 00:15:51,060 --> 00:15:53,860 Josh: are like kind of accumulating these problems along the way to 250 00:15:53,860 --> 00:15:56,580 Josh: the point where now ram is becoming close to worth its 251 00:15:56,580 --> 00:15:59,260 Josh: weight in gold if gold hadn't just gone up like 30 it would have 252 00:15:59,260 --> 00:16:02,320 Josh: been and just today it was announced we have this post on screen saying that 253 00:16:02,320 --> 00:16:05,140 Josh: the prices for ews for microsoft for google 254 00:16:05,140 --> 00:16:08,620 Josh: cloud the ramp prices are 70 percent higher than 255 00:16:08,620 --> 00:16:11,780 Josh: in the fourth quarter of last year so 256 00:16:11,780 --> 00:16:15,240 Josh: the ramp up is incredibly high and 257 00:16:15,240 --> 00:16:18,620 Josh: it's showing i guess how durable the industry is where they're ready to absorb 258 00:16:18,620 --> 00:16:22,760 Josh: this and keep going that's how important this progress is so things are getting 259 00:16:22,760 --> 00:16:27,940 Josh: a lot more expensive and there is a new gold rush on the block and that is for 260 00:16:27,940 --> 00:16:33,160 Josh: for RAM for random access memory in high bandwidth so they could deliver the tokens to you. 261 00:16:33,420 --> 00:16:38,160 Ejaaz: And finally everyone knows the story about NVIDIA spending 20 billion dollars 262 00:16:38,160 --> 00:16:42,560 Ejaaz: to acquire the licensing rights of this company called Grok which also makes 263 00:16:42,560 --> 00:16:48,040 Ejaaz: chips for AI models but the story that everyone missed was the fact that these 264 00:16:48,040 --> 00:16:51,780 Ejaaz: chips are made with a very specific type of memory called 265 00:16:52,930 --> 00:16:57,950 Ejaaz: SRAM, static random access memory, which is a different type of memory to DRAM. 266 00:16:58,150 --> 00:17:03,010 Ejaaz: So you can imagine that in a world where DRAM prices are skyrocketing and everyone's 267 00:17:03,010 --> 00:17:07,330 Ejaaz: dependent on DRAM, having a chip that's made of a different type of memory that 268 00:17:07,330 --> 00:17:12,870 Ejaaz: costs a fraction of the price of the competing memory type is probably a good thing. 269 00:17:13,130 --> 00:17:18,450 Ejaaz: And NVIDIA bought what is pretty much the only $20 billion get-out-of-jail-free, 270 00:17:18,490 --> 00:17:23,110 Ejaaz: very expensive get-out-of-jail-free card that was available. 271 00:17:23,310 --> 00:17:28,550 Ejaaz: So NVIDIA, even if DRAM prices continue to increase to an absorbent amount or 272 00:17:28,550 --> 00:17:34,410 Ejaaz: a crazy amount, they have this way out to basically still support scanning of 273 00:17:34,410 --> 00:17:37,590 Ejaaz: their GPUs without hiking the costs too much. 274 00:17:37,730 --> 00:17:41,390 Ejaaz: Just a masterful chess play from the Monopoly. 275 00:17:42,090 --> 00:17:47,070 Josh: Yeah. Jensen is, he's on fire, man. Every decision that he makes, he seems so calculated. 276 00:17:47,230 --> 00:17:52,830 Josh: He seems so aware of where the puck is headed to and acquiring Grok and getting 277 00:17:52,830 --> 00:17:57,390 Josh: themselves all of this power on the inferencing front is such a huge deal because 278 00:17:57,390 --> 00:17:59,310 Josh: now there is no real threat. 279 00:17:59,470 --> 00:18:01,970 Josh: They've absorbed the threat and they've made it their own advantage. 280 00:18:02,210 --> 00:18:05,330 Josh: So if I had to summarize this, the price of things are going up. 281 00:18:05,570 --> 00:18:09,870 Josh: Why? Because memory is in short supply and not the kind that you plug into your 282 00:18:09,870 --> 00:18:13,270 Josh: computer as a hard drive, you put your photos on, but the kind that allows your 283 00:18:13,270 --> 00:18:15,430 Josh: computer to think remarkably quickly. 284 00:18:15,610 --> 00:18:17,750 Josh: And the fastest version of this, this high bandwidth memory, 285 00:18:17,950 --> 00:18:23,630 Josh: has become the new gold rush for AI companies across the world who want to generate 286 00:18:23,630 --> 00:18:26,330 Josh: tokens as fast and efficient as everyone else. 287 00:18:26,450 --> 00:18:31,170 Josh: It is a new bottleneck that we need to monitor because there are now an increasing 288 00:18:31,170 --> 00:18:32,770 Josh: amount of things that can go wrong. 289 00:18:32,930 --> 00:18:36,330 Josh: So we'll be keeping a close eye on this, how resilient these companies are to 290 00:18:36,330 --> 00:18:40,970 Josh: that 70% price increase over the quarter, and how the consumer market's going to act. 291 00:18:41,430 --> 00:18:45,070 Josh: As me, being like a gamer, someone who uses a PC, this sucks. 292 00:18:45,490 --> 00:18:49,270 Josh: Things are a lot more expensive now, $2,000 to $3,000 more expensive per computer. 293 00:18:49,430 --> 00:18:52,250 Josh: But we'll just evaluate the situation and see where we stand. 294 00:18:52,390 --> 00:18:55,010 Josh: If you have built a computer in the past, or if you are affected by this, 295 00:18:55,130 --> 00:18:59,510 Josh: or if you think the price of an iPhone is going to go up, tell us how much, tell us your stories. 296 00:18:59,630 --> 00:19:03,990 Josh: I'm so curious to hear the firsthand accounts of how people are impacted by 297 00:19:03,990 --> 00:19:07,070 Josh: these things outside of the general scope that we talk about here on the show. 298 00:19:09,210 --> 00:19:12,670 Josh: So Share this episode with your friends if you enjoyed it. And don't forget 299 00:19:12,670 --> 00:19:16,190 Josh: to like and subscribe wherever you are getting your podcasts here. 300 00:19:16,410 --> 00:19:21,450 Ejaaz: The cost of this show has officially gone up 500% in the last two months because 301 00:19:21,450 --> 00:19:24,610 Ejaaz: of the memory required to run this entire show. 302 00:19:24,810 --> 00:19:28,510 Ejaaz: So guys, if you want us to still be alive and pump out three to four episodes 303 00:19:28,510 --> 00:19:30,490 Ejaaz: a week, please like, please subscribe. 304 00:19:30,690 --> 00:19:35,010 Ejaaz: We've got an awesome newsletter. We're dropping essays and highlights twice a week now. 305 00:19:36,270 --> 00:19:38,110 Ejaaz: Best source of information you can get