WEBVTT 00:00:02.080 --> 00:00:05.080 Oh, 00:00:06.240 --> 00:00:11.840 that'll be $800. >> What? That can't be right. What do you 00:00:10.240 --> 00:00:16.000 mean $800? >> Yep. That's probably how I felt for 00:00:14.000 --> 00:00:20.880 anyone who's fired up the old PC part picker over the last couple of months. 00:00:17.920 --> 00:00:25.199 But why, though? Well, part of it is the obvious one. I'm sure by now you must 00:00:23.119 --> 00:00:32.399 have seen the countless headlines about AI data centers and their insatiable 00:00:27.760 --> 00:00:34.800 demands for energy and water and yes, 00:00:32.399 --> 00:00:39.600 computer memory. And they're using their fire hose of investment capital to buy 00:00:36.880 --> 00:00:45.680 up so much memory that one of the big three memory makers just said, "Mother 00:00:42.160 --> 00:00:47.920 the big three, It's just big me." 00:00:45.680 --> 00:00:53.120 and then completely sunsetted their entire consumer line outright in an 00:00:50.399 --> 00:00:57.520 effort to focus on this sky-high AI demand. Separately, SKH Highix announced 00:00:55.840 --> 00:01:03.840 that they are sold out of production all the way through 2026 and Samsung just 00:01:00.719 --> 00:01:06.240 increased their contract pricing by 00:01:03.840 --> 00:01:10.080 100%. This means that if the AI bubble doesn't pop, this is going to get worse 00:01:08.720 --> 00:01:14.479 before it gets better. >> But like, can't they just make more 00:01:11.920 --> 00:01:19.040 memory chips or build more factories? Couldn't they just download more RAM? I 00:01:17.360 --> 00:01:22.560 mean, yeah, they could do those things, but I hate to break it to you guys, 00:01:21.040 --> 00:01:30.720 there's actually a lot of reasons for them not to do that. Just like I'm not 00:01:26.080 --> 00:01:33.119 going to segue to our sponsor, Dbrand. 00:01:30.720 --> 00:01:37.200 Dbrand is doing a giveaway. All you got to do is order something from their site 00:01:34.880 --> 00:01:41.759 before the new year quickly and you will be entered to win a 00:01:39.280 --> 00:01:46.399 Galaxy Z trifold, which currently isn't available in North America. Just visit i 00:01:43.840 --> 00:01:51.759 amveryshort.com. Are you tired of boring screwdrivers? 00:01:48.640 --> 00:01:54.560 Boom. Four new colors of the brand new 00:01:51.759 --> 00:02:00.240 LT transparent screwdriver. Plasma purple, cryo teal, molten orange, and 00:01:58.240 --> 00:02:04.079 carbon black. They're see-through. They're awesome. And they're probably 00:02:01.920 --> 00:02:07.680 going to sell out because for a limited time only, if you buy through YouTube 00:02:06.240 --> 00:02:12.720 Shopping at the link in the video description, you will get 20% off your 00:02:10.239 --> 00:02:16.959 driver, but only until December 30th. Collect them all or maybe pair them with 00:02:14.640 --> 00:02:20.200 our brand new bid case and all over print hoodie. 00:02:26.879 --> 00:02:34.400 To explain why RAM costs a small nation's GDP now, we first need a quick 00:02:31.760 --> 00:02:40.080 and dirty explainer for why AI models such as ChatGBT, Deep Seek, and Gemini 00:02:37.200 --> 00:02:44.640 are so darn thirsty for it. LLMs or large language models are trained by 00:02:42.239 --> 00:02:49.920 feeding them buckets of media files, often text, images, video, or audio, or 00:02:47.840 --> 00:02:54.160 depending on the model, sometimes a combination. And in the current ARMS 00:02:51.680 --> 00:02:58.879 race, the highest quality models depend on parsing through the largest buckets 00:02:56.800 --> 00:03:03.440 of training data. This training process can take anywhere from a few hours to 00:03:01.519 --> 00:03:08.400 months for the largest models. And that's where RAM comes in because RAM is 00:03:05.760 --> 00:03:15.040 so much faster than an SSD with more capacity than the cache on board a CPU. 00:03:11.440 --> 00:03:17.200 It's essential, crucial even for large 00:03:15.040 --> 00:03:21.120 data centers to get as much as possible to speed up their AI development and 00:03:19.120 --> 00:03:24.640 training efforts. It's also useful for inference, the stage where the user 00:03:22.879 --> 00:03:30.400 actually interacts with the trained model. For instance, if you have a long 00:03:27.519 --> 00:03:34.959 interaction with an AI model, more RAM helps to quickly reference the earlier 00:03:32.560 --> 00:03:38.319 context of your conversation in order to appropriately respond to your next 00:03:36.720 --> 00:03:44.560 prompt. If you want a deeper dive into this, I'm going to make sure I link some resources down below. But all you really 00:03:41.760 --> 00:03:48.959 need for us to continue is more. It just needs more. And companies like OpenAI 00:03:46.879 --> 00:03:54.080 are generating billions of dollars in revenue, sorry, funding, which if they 00:03:52.080 --> 00:03:58.879 want to stay on the bleeding edge, means they need as much memory as they can 00:03:56.560 --> 00:04:04.480 get. But Elijah, isn't a ton of that memory being installed on AI GPUs or 00:04:01.840 --> 00:04:10.879 even memory sticks that are for servers? Why is my Gamer Deluxe RGB 360 nocope 00:04:08.159 --> 00:04:16.079 kit also getting expensive? Here's the thing. While your favorite PC parts 00:04:13.200 --> 00:04:21.280 retailer might carry RAM from dozens of different manufacturers, most of them 00:04:18.400 --> 00:04:25.840 only assemble modules, the sticks that actually go into the slots. For the 00:04:23.280 --> 00:04:30.560 little black squares, the actual chips that contain the DRAM dies, there are 00:04:28.400 --> 00:04:37.280 really only three serious players right now. SKHix, Samsung, and Micron. These 00:04:34.560 --> 00:04:42.160 giants own the multi-billion dollar fabs that produce those chips and use them to 00:04:39.680 --> 00:04:46.240 supply functionally every single industry on Earth. If it has a 00:04:44.080 --> 00:04:51.280 processor, it probably needs a little bit of DRAM. So, yes, server sticks are 00:04:49.520 --> 00:04:58.720 separate from your gaming sticks, but at the end of the day, whether you're a typical gamer or an AI company, you're 00:04:55.199 --> 00:05:01.120 both competing, or more like bidding, on 00:04:58.720 --> 00:05:06.240 the finite quantity of these chips that can be produced by the big three. And I 00:05:03.919 --> 00:05:11.120 wonder who can afford to bid more, the individual who wants to play video games 00:05:08.320 --> 00:05:16.000 or the multi-trillion dollar corporation with no revenue whose stock price will 00:05:13.600 --> 00:05:20.560 cater if they don't buy more than anyone else in an effort to maintain their 00:05:17.759 --> 00:05:25.120 tenuous lead. So, if you take off your angry consumer 00:05:22.880 --> 00:05:29.840 hat and put on your business monster hat for even a second, it's pretty easy to 00:05:27.600 --> 00:05:34.479 understand why Micron decided to pivot their internal resources toward 00:05:32.000 --> 00:05:39.600 fulfilling demand for their hungriest, wealthiest customers. Sucks cuz Crucial 00:05:37.280 --> 00:05:42.960 was a really good source of quality RAM and SSDs [music] 00:05:40.800 --> 00:05:47.759 at a decent price. But it's really not the end of the world. Samsung has zero 00:05:45.600 --> 00:05:51.600 presence in their DIY enthusiast space either, but that doesn't prevent module 00:05:49.759 --> 00:05:54.960 makers like Kingston or Corsair potentially pivoting and buying chips 00:05:53.440 --> 00:06:00.240 from them and building sticks for gamers. Speaking of Samsung, a rumor 00:05:57.600 --> 00:06:05.600 recently started that supply was so constrained that they couldn't supply 00:06:02.160 --> 00:06:08.319 their own smartphone business unit with 00:06:05.600 --> 00:06:13.440 RAM chips. Samsung has come out and said that that isn't true. But for it to be 00:06:10.560 --> 00:06:18.240 even a concern for the industry does raise a question. Why don't they just 00:06:15.120 --> 00:06:20.479 make more? Well, for a couple reasons. 00:06:18.240 --> 00:06:24.240 First, as I've alluded to before, the current fabs that are used to make 00:06:22.000 --> 00:06:28.479 cuttingedge chips have a finite capacity. They already run around the 00:06:26.479 --> 00:06:32.560 clock with some of the world's most finely tuned supply management and 00:06:30.639 --> 00:06:36.720 highly trained engineers overseeing their operation. It's not as simple as 00:06:34.319 --> 00:06:42.160 just adding a production shift or turning the machine up to 200%. Those 00:06:39.680 --> 00:06:47.680 are delicate operations and if something goes wrong in the middle of a batch, it 00:06:44.639 --> 00:06:49.440 could be weeks or even months to build 00:06:47.680 --> 00:06:53.280 it again from scratch. So, they're not going to change things all willy-nilly. 00:06:51.120 --> 00:06:58.800 And second is that even if they could boost production to meet demand, both 00:06:55.520 --> 00:07:00.400 SKH and Samsung have publicly stated 00:06:58.800 --> 00:07:05.360 they don't plan to because they don't want to. See, this isn't the first time 00:07:02.880 --> 00:07:09.440 DRAM demand has spiked. There was a big one back in the mid2010s when affordable 00:07:07.599 --> 00:07:13.440 cell phone plans went online in India as well as just a more general surge in 00:07:11.599 --> 00:07:18.000 demand for mobile computing devices. Anyway, in the past, DRAM manufacturers 00:07:16.160 --> 00:07:22.720 have boosted production to meet these spikes in demand. Spikes that eventually 00:07:20.000 --> 00:07:26.400 subsided, leading to an overstock. You see, the same factors that make it hard 00:07:24.479 --> 00:07:30.319 to ramp up production at a moment's notice also make it kind of challenging 00:07:28.240 --> 00:07:34.080 to slow it down at a moment's notice. That can be good for consumers since 00:07:32.000 --> 00:07:37.680 that means cheap gaming memory, but corporate fat cats kind of hate that, 00:07:36.080 --> 00:07:42.000 especially when it leads to them selling memory at cost or sometimes even below 00:07:40.000 --> 00:07:46.319 cost. The third reason is closely related to the first and second. [music] 00:07:44.080 --> 00:07:51.759 Building a fabrication facility for anything silicon wafer production, 00:07:48.639 --> 00:07:54.479 whether it's CPUs, GPUs, or RAM, takes 00:07:51.759 --> 00:07:58.319 literal years. And these aren't the kind of projects where you can just throw 00:07:56.240 --> 00:08:02.000 twice as much money at them to complete them in half the time. On top of the 00:08:00.240 --> 00:08:06.319 building itself, plans need to be in place for seismic activity mitigation, 00:08:04.400 --> 00:08:11.039 water access and management, power staffing, logistics, good old-fashioned 00:08:08.639 --> 00:08:15.039 supply of the chemicals, gases, and high purity silicon wafers you'll need. And 00:08:12.800 --> 00:08:18.160 even if one of these big boys does decide to shell out for another 00:08:16.479 --> 00:08:23.680 state-of-the-art fab, they would obviously want a return on their investment. So, they would only do it if 00:08:21.680 --> 00:08:27.919 they expect these prices to stay high enough for them to operate it profitably 00:08:25.599 --> 00:08:31.680 for the next couple years. [music] And I'm going to let you in on a little open 00:08:29.599 --> 00:08:36.000 secret. That's not going to happen. The AI bubble is going to pop. Maybe not 00:08:34.159 --> 00:08:39.519 today, maybe not tomorrow, but soon and for the rest of your life. When it 00:08:37.360 --> 00:08:44.080 happens, demand for memory isn't going to go away, just like demand for new 00:08:41.680 --> 00:08:48.480 smartphones didn't go away. But it won't stay at this level. And there is no 00:08:46.240 --> 00:08:52.800 shovel manufacturer on Earth that is going to build a several billion dollar 00:08:50.480 --> 00:08:58.000 factory that might not be needed by the time it's completed. So, it just seems 00:08:54.560 --> 00:08:59.839 that it's all the 00:08:58.000 --> 00:09:05.120 where the is that coming from? >> From across the Pacific Ocean, Elijah, 00:09:01.920 --> 00:09:08.240 where I've just learned that uh China 00:09:05.120 --> 00:09:11.600 will save us from expensive memory. 00:09:08.240 --> 00:09:13.200 Well, maybe. Regardless of your 00:09:11.600 --> 00:09:18.720 political views on China and their technology, CXMT, a relatively new chip 00:09:16.720 --> 00:09:23.839 fab that was born and raised in the 100 Acre Wood, has just announced that they 00:09:21.040 --> 00:09:28.720 now have the ability to manufacture DDR5 chips. Great news for folks in China, 00:09:26.880 --> 00:09:33.519 although maybe not as much for Americans, unless the US and China can 00:09:31.279 --> 00:09:38.560 sort out their little trade kurfuffle. With all that said, according to some 00:09:35.360 --> 00:09:40.080 reports, CXMT is still about 2 to 3 00:09:38.560 --> 00:09:43.680 years from reaching the kind of manufacturing output that the big three 00:09:42.000 --> 00:09:47.360 have. So, it remains to be seen whether they'll be able to make a dent in the 00:09:45.120 --> 00:09:52.720 current demand anyway, which really sucks because, as I alluded to before, 00:09:50.240 --> 00:09:57.360 this is probably going to get much worse before it gets better. [music] 00:09:54.720 --> 00:10:03.440 Remember that bit about how SKHEX has sold through their 2026 production? What 00:10:00.560 --> 00:10:08.800 that means is that even if the bubble pops, okay, all those chips are booked 00:10:06.480 --> 00:10:14.079 and SKHENX is going to do their darnest to make sure that whoever booked them 00:10:11.279 --> 00:10:18.720 buys them. So if a company like Kingston were to place an order for chips, it's 00:10:16.240 --> 00:10:23.360 going to be at those current market or bidded prices. And they're not going to 00:10:21.279 --> 00:10:28.160 sell them to you for the old price just because you're a poor consumer who just 00:10:25.839 --> 00:10:32.560 wants a decent price on memory. They're still gonna want to get the money back 00:10:30.079 --> 00:10:38.959 from paying more for those RAM chips. So, 00:10:34.640 --> 00:10:41.440 years then back to you, Elijah. 00:10:38.959 --> 00:10:45.360 Which means not only are RAM dims going to be more expensive, but everything 00:10:43.279 --> 00:10:52.240 that needs memory will be. iPhones, Steam machines, smartwatches, cars, and 00:10:48.000 --> 00:10:54.352 so so much more. [sighs] So, with all of 00:10:52.240 --> 00:10:58.720 that said, what should you do as a [music] consumer? To be honest, I don't 00:10:56.800 --> 00:11:02.560 know. Micron and OpenAI make for convenient scapegoats for lining the 00:11:00.959 --> 00:11:09.040 pockets of corporate billionaires and politicians and leaving us to struggle 00:11:05.519 --> 00:11:11.200 both now and when the AI bubble pops. 00:11:09.040 --> 00:11:16.000 But the flip side is they are just some of the players. And as far as I can 00:11:13.040 --> 00:11:20.160 tell, everyone is complicit. And if I'm mad at everyone, I don't know what to 00:11:17.839 --> 00:11:24.000 do. Boycott everyone that makes RAM. Then what? What videos will we make 00:11:21.839 --> 00:11:27.519 about products with no RAM in them? What video games are we going to play? I did 00:11:25.920 --> 00:11:30.720 find out some good news though that I'm going to tell you. The Ebola outbreak 00:11:29.040 --> 00:11:34.079 that is happening in the Congo has just been declared over. I mean, I didn't say 00:11:32.720 --> 00:11:39.440 the good news was going to be about the RAM crisis, but hey, maybe this will be 00:11:36.800 --> 00:11:44.720 a good segue to our sponsor, Private Internet Access. What's a VPN? I'm glad 00:11:42.000 --> 00:11:49.040 you asked. Basically, a VPN hides your IP address and masks the location of 00:11:47.279 --> 00:11:52.640 your internet connection via an encrypted tunnel. 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