Summarizer

> either in a free market o Then why all the anti-coal mining diktats coming down from Brussels?

The free market installs a tiny amount of coal, and a lot of renewable energy. Whether you believe this means "coal is/isn't cost competitive with renewables in a free market" is a debate about word definitions that I'm not terribly interested in. Brussels is trying to reduce "tiny" to zero, because of this: https://en.wikipedia.org/wiki/Tragedy_of_the_commons China, like Brussels, is trying to reduce coal for similar reasons. They don't like the air pollution health hazard (fully believable), and they say they don't like global warming (somewhat believable).

The problem in this case seems to have sprung from a lack of collusion. Altman reportedly approached Samsung and SK independently to strike deals for a large chunk of both companies' production. Neither party apparently knew he was negotiating with the other. If they had actually been communicating or colluding with each other, they would have put the screws to him, making it harder for OpenAI to assert control over the vast majority of the DRAM market. Failing that, you'd like to think a regulatory agency somewhere would step in to keep a single player from hosing everybody else, but...

> Failing that, you'd like to think a regulatory agency somewhere would step in to keep a single player from hosing everybody else, but... Up until AI there weren't really players being able to gobble 40% of the market so nobody was looking.

How would the country’s internal intelligence services know what’s happening? Yes, by spying. That’s literally their job and they have assets in every critical area in a country. Every institution, every major industry player, they are monitored to a degree by the internal intelligence in every country in the world. There are more nefarious reasons to do this but the ostensible one is that if it’s of strategic importance the country needs to know everything there is to know. The companies also do a lot of spying themselves, every bit of info could give them an edge.

Also it is government job to regulate. Monopolies should be busted, and behaviour like that should be culled. But US govt is full on AI to mask them cratering their own economy.

No this is literally a sign of an unstable system with too high of a gain K. There is an alternative where legislation dampens this behavior but the short term profits will be lower. Hence the hawks don’t like it.

>legislation dampens this behavior Potentially. Well meaning and thought out legislation still distorts the markets, possibly making things objectively worse.

The sheer fucking blazing ignorance of this comment > Capitalists claim that this is optimal. Compared to starving under communism coz someone at top got the number wrong, yes. And it only really happens when there are massive, unpredictable market movements and governments not doing their job. Govt should look at the whole thing and just say "no", blame them. No market system self regulates well enough, and it's government job to file down the edge cases like this. But the revolution happened in country which has two utterly incompetent parties, both in pockets of billionaires, fighting for power, and the clowns from one that won last battle use AI to smokescreen the economic growth their actions cratered

If only there were privacy laws and working antitrust laws. There could also be a law straight up banning chat uses of llms and only allow agentic uses with human review. Would solve a lot of problems for lawmakers worried about AI I think.

Sounds like they're too big to fail, maybe we should bail them out to reinforce that they will get rewarded for making bad decisions.

Permanent public ownership of (very large stakes in) these companies doesn't seem like such a bad idea anymore, does it? It's what we used to have for most of the 20th century at least in Europe.

Yeah and exactly zero of those companies are European as a consequence. I think we won’t be taking Europe’s lead on this, thanks.

> Soo ... how sure are we that the memory makers themselves are not going to be the ones holding the bag? I hope they do, they did not have to agree to sell so much RAM to one customer. They’ve been caught colluding and price fixing more than once, I hope they take it in the shorts and new competitors arise or they go bankrupt and new management takes over the existing plants. Don’t put all your eggs in the one basket is how the old saying goes.

> If the existing makers can't meet supply such that Chinese exports get their foot in the door, they may find they never get ahead again due to volume The answer to that is government regulation. Ban anything Chinese or slap it with tariffs. That is what tariffs are intended for - not for the BS the current administration has done.

Good luck actually pulling that off, it'll just kneecap US/Western industry, just as the current tariff and war madness has helped drag the US economy into the gutter.

Good point. I think both AI companies and hardware makers should pay for the damage they caused to us here. They act as a de-facto monopoly and milk us. Why is this allowed?

It has the makings of a natural monopoly, except its compounded by RAM cartels colluding to shut out the last of the competitors. Recently they had a second price fixing lawsuit thrown out (in the US). Now with the state of things I'm sure another lawsuit will arrive and be thrown out because the government will do anything to keep the AI bubble rolling and a price fixing suit will be a threat to national security, somehow. Obviously thats speculative and opinion but to be clear, people are allowing it. There are and more so were things that could be done.

Because for the last 60 years we've allowed big business to buy and hollow out our legal and education systems.

Allowed? We live in a neoliberal world where corporate monopolies / oligopolies aren’t even remotely regulated. If you try to do even the gentlest regulation of companies people scream about communism and totalitarianism. Unless the regulation serves the monopolies by making it harder to enter the market. It started with raegan, and even parties on the “left” in the west believe in it with very few exceptions.

> We live in a neoliberal world where corporate monopolies / oligopolies aren’t even remotely regulated. If you try to do even the gentlest regulation of companies people scream about communism and totalitarianism. Unless the regulation serves the monopolies by making it harder to enter the market. The thing that enables this is pretty obvious. The population is divided into two camps, the first of which holds the heuristic that regulations are "communism and totalitarianism" and this camp is used to prevent e.g. antitrust rules/enforcement. The second camp holds the heuristic that companies need to be aggressively "regulated" and this camp is used to create/sustain rules making it harder to enter the market. The problem is that ordinary people don't have the resources to dive into the details of any given proposal but the companies do. So what we need is a simple heuristic for ordinary people to distinguish them: Make the majority of "regulations" apply only to companies with more than 20% market share. No one is allowed to dump industrial waste in the river but only dominant companies have bureaucratic reporting requirements etc. Allow private lawsuits against dominant companies for certain offenses but only government-initiated prosecutions against smaller ones, the latter preventing incumbents from miring new challengers in litigation and requiring proof beyond a reasonable doubt. This even makes logical sense, because most of the rules are attempts to mitigate an uncompetitive market, so applying them to new entrants or markets with >5 competitors is more likely to be deleterious, i.e. drive further consolidation. Whereas if the market is already consolidated then the thicket of rules constrains the incumbents from abusing their dominance in the uncompetitive market while encouraging new entrants who are below the threshold.

Arguably a more efficient approach might just be to have a tax that adds on to corporate tax incrementally for every % of market share a company has above say 7-8%. Then dominant companies are incentivised to re-invest in improving their efficiencies rather than just buying/squeezing out competitors. A more evenly spread market would then, as a result, be against regulations that make smaller market participants less competitive, as they'd all be in relatively less table positions.

First, on the surface, this sounds like a terrible idea. Almost all ideas that I see on HN about economics fail with even the tiniest amount of common sense. As a counterpoint: Look at very high value goods, like jet engines and MRI machines. I went for an MRI the other day and wondered to myself (then asked an LLM) what the international MRI market looks like. They are vanishingly small number of manufacturers and are usually dominated by a few international players. How are you going to apply this tax to non-domiciled (international) companies? Also, companies like General Electric, Mitsubishi Heavy, and Seimens are enormous and incredibly diverse. This idea falls apart quickly.

> Arguably a more efficient approach might just be to have a tax that adds on to corporate tax incrementally for every % of market share a company has above say 7-8%. How is this more efficient? You'd still be applying all of the inefficient regulatory rules intended to mitigate a lack of competition to the smaller companies trying to sustain a competitive market, and those rules are much more deleterious for smaller entities than higher tax rates. If you have $100M in fixed regulatory overhead for a larger company with $10B in profit, it's only equivalent to a 1% tax. The same $100M for a smaller company with $50M in profit is a 200% tax. There is no tax rate you can impose on the larger company to make up for it because the overhead destroys the smaller company regardless of what you do to the larger one.

> I am surprised we consider TSMC like a natural resource: isn't it really a combination of know-how and build-out according to that know-how? Have you seen how many states and countries look enviously at Silicon Valley’s tech companies, China’s manufacturing dominance, or London’s financial sector and try to replicate them? Turns out it’s way harder than you’d expect. Hell, Intel can’t match TSMC despite decades of expertise, much greater fame, and regulators happy to change the law and hand out tens of billions in subsidies.

What you say is absolutely true, and is a serious problem—but the way our system operates does not allow us to correct for it. Anyone trying to spin up a competitor to TSMC would have to first overcome a significant financial hurdle: the capital investment to build all the industrial equipment needed for fabrication. Then they'd have to convince institutions to choose them over TSMC when they're unproven, and likely objectively worse than TSMC, given that they would not have its decades of experience and process optimization. This would be mitigated somewhat if our institutions had common-sense rules in place requiring multiple vendors for every part of their supply chain—note, not just "multiple bids, leading to picking a single vendor" but "multiple vendors actively supplying them at all times". But our system prioritizes efficiency over resiliency . A wealthy nation-state with a sufficiently motivated voter base could certainly build up a meaningful competitor to TSMC over the course of, say, a decade or two (or three...). But it would require sustained investment at all levels—and not just investment in the simple financial sense; it requires people investing their time in education and research. Dedicating their lives to making the best chips in the world. And the only reason that would work is that it defies our system, and chooses to invest in plants that won't be finished for years, and then pay for chips that they know are inferior in quality, because they're our chips, and paying for them when they're lower quality is the only way to get them to be the best chips in the world.

If only we have not allowed oligopolies to exist. Meanwhile, EU is not in the race at all and US has very few fabs.

Fabricated shortage to fasten US Chip Act and US Chip Security Act

I want those AI companies that drove the prices up, to pay an immediate back-tax to all of us. I don't want to pay more because of AI companies driving the price up. That is milking.