insane RAM prices: it's not just AI

[madires]

More AI slop to come:
Nvidia partners with Wall Street giants to raise $500 billion for AI buildout - https://finance.yahoo.com/technology/ai/articles/wall-street-giants-partner-nvidia-163441421.html

I'm afraid we'll have to pay insane prices for several years, not just two or so.

[tszaboo]

Well sooner or later we have to start taxing tokens.
I've been thinking about this for a while now. It's the only logical step, otherwise they keep on building this monsters. How come that you have some work, done by a human, who needs to pay ~50% of their income as tax, while if you have the same work done by AI, you can actually write that down as a business expense.
It makes no sense. Reduce the income tax and tax the tokens.

[SiliconWizard]

Those amounts are totally insane.

[brucehoult]

Well sooner or later we have to start taxing tokens.
I've been thinking about this for a while now. It's the only logical step, otherwise they keep on building this monsters. How come that you have some work, done by a human, who needs to pay ~50% of their income as tax, while if you have the same work done by AI, you can actually write that down as a business expense.
It makes no sense. Reduce the income tax and tax the tokens.

This doesn't make sense.

Salaries and payments to contractors or companies using humans are also business expenses that you offset against your business income.

Token providers will also already be paying tax, to whatever extent they make a profit. (and if they don't then they will in time go out of business)

[Someone]

Token providers will also already be paying tax, to whatever extent they make a profit. (and if they don't then they will in time go out of business)

We'll see how that goes with the current trends of global mega corps IP/transfer pricing putting them in loss making positions on paper so they don't need to pay any tax on profits. All legal of course.

In addition people working are taxed at much higher rates than business to business transactions or profits.
Australian government revenue is 39% personal income taxation compared to company taxes of 19%:
https://treasury.gov.au/review/tax-white-paper/at-a-glance
GST on expenses is a wash for businesses as they get it back, so the only tax on AI is the company profit (as above legally "adjustable").

So the government cares because even if a company pays the same expense to an AI supplier for the worker they no longer need, government ends up with less money in its pocket and may well be paying unemployment benefits to the no-longer worker.

[tszaboo]

Well sooner or later we have to start taxing tokens.
I've been thinking about this for a while now. It's the only logical step, otherwise they keep on building this monsters. How come that you have some work, done by a human, who needs to pay ~50% of their income as tax, while if you have the same work done by AI, you can actually write that down as a business expense.
It makes no sense. Reduce the income tax and tax the tokens.

This doesn't make sense.

Salaries and payments to contractors or companies using humans are also business expenses that you offset against your business income.

Token providers will also already be paying tax, to whatever extent they make a profit. (and if they don't then they will in time go out of business)

It makes total sense, if you think about it macroeconomically.
You are in Australia. Your company can either hire a guy (Steve) who will fill in an excel sheet. Or you hire claude to do that.
If a guy is hired, ~50% of his pay will go as tax. Then he will go out and buy groceries, and pay VAT. Which will then pay for the farmer, who will buy fuel. Taxed every time. Most of that money will end up in the Australian economy, people and the tax office, recirculated.

If you hire claude, where does that money go? They pay one time VAT on it. Even though the tokens were made somewhere else. So technically, if you look at it the most conservative way, you imported compute from abroad, and you didn't pay import duty on it. The money goes to Anthropic in the USA, who doesn't import anything from your country, because all they needs is Nvidia chips and energy. That money is gone. Steve doesn't get paid, and doesn't buy groceries. That money is gone. Nothing will fix that economic hole that loss of Steve's job will create.

Where does that money go? Into this ever accelerating circular economy where one AI company spends all their money with another AI company, and you cannot afford to buy a RAM stick because they buy everything. Or have any software because it's full of slop.

So the government cares because even if a company pays the same expense to an AI supplier for the worker they no longer need, government ends up with less money in its pocket and may well be paying unemployment benefits to the no-longer worker.

Exactly, it's a double loss for the tax office. I've just seen a video, how India economy is already affected by this.
Governments are way behind on this, because they always are reactive, but what happens if you just increase the unemployment rate by 5% in let's say 5 years? Social security will collapse like a deck of cards, then they start printing money. Then you will care, even if you are a tokenmaxer leet haxor.

[DiTBho]

That must be why, as reported these days, it seems you can rent a "super AI agent" for

• L3, 6,000 USD per month (entry level)
• L2, 10,000 USD per month
• L1, 20,000 USD per month <----------- (top of the line, or better yet, have a lot of nodes and resources available)

[brucehoult]

[It makes total sense, if you think about it macroeconomically.
You are in Australia. Your company can either hire a guy (Steve) who will fill in an excel sheet. Or you hire claude to do that.
If a guy is hired, ~50% of his pay will go as tax. Then he will go out and buy groceries, and pay VAT. Which will then pay for the farmer, who will buy fuel. Taxed every time. Most of that money will end up in the Australian economy, people and the tax office, recirculated.

If you hire claude, where does that money go? They pay one time VAT on it. Even though the tokens were made somewhere else. So technically, if you look at it the most conservative way, you imported compute from abroad, and you didn't pay import duty on it. The money goes to Anthropic in the USA, who doesn't import anything from your country, because all they needs is Nvidia chips and energy. That money is gone. Steve doesn't get paid, and doesn't buy groceries. That money is gone. Nothing will fix that economic hole that loss of Steve's job will create.

No, that's not true. Macroeconomics is shit. Only micro means anything.

The shortage in this world is finding people to do jobs, not finding jobs for people to do. Steve will do something else. Voluntary trade is always good, increasing net wealth, whether it's from one village to another, someone in Sydney using tokens from a provider in Melbourne, or internationally. Mechanisation and automation also increase net wealth. Your thinking appears to be zero-sum, which has long been discredited.

In 1900 about 25% of the Australian workforce was deployed in agriculture.  Then mechanisation came along and today it's about 2%. Are all those other people unemployed? No, not for more than a short time, they're doing other things instead. It's even more dramatic if you look at a country like the UK where it was close to 50% in 1800 and 1% today.

[tszaboo]

[It makes total sense, if you think about it macroeconomically.
You are in Australia. Your company can either hire a guy (Steve) who will fill in an excel sheet. Or you hire claude to do that.
If a guy is hired, ~50% of his pay will go as tax. Then he will go out and buy groceries, and pay VAT. Which will then pay for the farmer, who will buy fuel. Taxed every time. Most of that money will end up in the Australian economy, people and the tax office, recirculated.

If you hire claude, where does that money go? They pay one time VAT on it. Even though the tokens were made somewhere else. So technically, if you look at it the most conservative way, you imported compute from abroad, and you didn't pay import duty on it. The money goes to Anthropic in the USA, who doesn't import anything from your country, because all they needs is Nvidia chips and energy. That money is gone. Steve doesn't get paid, and doesn't buy groceries. That money is gone. Nothing will fix that economic hole that loss of Steve's job will create.

No, that's not true. Macroeconomics is shit. Only micro means anything.

The shortage in this world is finding people to do jobs, not finding jobs for people to do. Steve will do something else. Voluntary trade is always good, increasing net wealth, whether it's from one village to another, someone in Sydney using tokens from a provider in Melbourne, or internationally. Mechanisation and automation also increase net wealth. Your thinking appears to be zero-sum, which has long been discredited.

In 1900 about 25% of the Australian workforce was deployed in agriculture.  Then mechanisation came along and today it's about 2%. Are all those other people unemployed? No, not for more than a short time, they're doing other things instead. It's even more dramatic if you look at a country like the UK where it was close to 50% in 1800 and 1% today.

While I mostly agree with you generally about what you wrote here, I disagree with the conclusion.
I don't think we can compare the change today to the change yesterday. Because you exchange goods and services with another party, that doesn't really want anything from you.
Let me ask you this: Why shouldn't we tax AI. Give me a reason not to do it. Do you think that it would be better for you, if instead of paying 50% tax, you would pay 20%, and the rest would come from a server farm? Wouldn't it be that actual prosperity that AI companies promise (and fail to explain how it would actually look like.)

[brucehoult]

I don't think we can compare the change today to the change yesterday. Because you exchange goods and services with another party, that doesn't really want anything from you.

We don't need direct 2-way exchange (barter) with any other party, such as an LLM cloud provider,  because we invented money.

Let me ask you this: Why shouldn't we tax AI. Give me a reason not to do it.

Of course we should tax AI, the same as any other activity. Not differently.

Government trying to put a thumb on the scales by taxing one activity more than another never works out well. In particular, it never increases overall wealth.

Do you think that it would be better for you, if instead of paying 50% tax, you would pay 20%, and the rest would come from a server farm? Wouldn't it be that actual prosperity that AI companies promise (and fail to explain how it would actually look like.)

No I don't.

Eliminating income tax in general, and using only VAT (GST here) would make things better. Taxing possibly desirable activities differently to others does not improve things. I'm not even convinced that taxing UNdesirable things, such as smoking, improves things.

[abeyer]

The shortage in this world is finding people to do jobs, not finding jobs for people to do. Steve will do something else. Voluntary trade is always good, increasing net wealth, whether it's from one village to another, someone in Sydney using tokens from a provider in Melbourne, or internationally. Mechanisation and automation also increase net wealth. Your thinking appears to be zero-sum, which has long been discredited.

Where this differs from that historic model though, is that it's a push to automate labor in general, rather than automating task A while fungible 'human resources' shift their activity to task B instead. You can debate the feasibility/timeline/likelyhood of that being achieved, and there are absolutely open questions there. I think it's hard to deny, though, that there's a strong element of capitalist fever dream of eliminating labor from the market entirely that underlies a lot of the AI economy and makes this a materially different situation.

[tszaboo]

I don't think we can compare the change today to the change yesterday. Because you exchange goods and services with another party, that doesn't really want anything from you.

We don't need direct 2-way exchange (barter) with any other party, such as an LLM cloud provider,  because we invented money.

Let me ask you this: Why shouldn't we tax AI. Give me a reason not to do it.

Of course we should tax AI, the same as any other activity. Not differently.

Government trying to put a thumb on the scales by taxing one activity more than another never works out well. In particular, it never increases overall wealth.

Do you think that it would be better for you, if instead of paying 50% tax, you would pay 20%, and the rest would come from a server farm? Wouldn't it be that actual prosperity that AI companies promise (and fail to explain how it would actually look like.)

No I don't.

Eliminating income tax in general, and using only VAT (GST here) would make things better. Taxing possibly desirable activities differently to others does not improve things. I'm not even convinced that taxing UNdesirable things, such as smoking, improves things.

Ok, I think there is another argument I would like to make, why we need to tax it more than everything else.
AI as a sector, by the looks of it is creating a an economic structure that very much like the Dutch Disease.
https://en.wikipedia.org/wiki/Dutch_disease
The effects look exactly like the Dutch Disease, even though we are only in the money investment phase, not the profit phase. And even the wikipedia article is giving examples on how to solve it

1) slowing the appreciation of the real exchange rate, (2) boosting the competitiveness of the adversely affected sectors, and (3) demographic adaptation

I don't know what (1) would mean in this case, and nobody seems to have an answer to (3), other than that we will be unemployed uneducated idiots living in the slumps. (2) would be affected by taxation.

[radiolistener]

They will sell you dumb terminals with 256 MB of RAM to talk with "AI".

That's an interesting explanation for the memory price increase.

[DiTBho]

They will sell you dumb terminals with 256 MB of RAM to talk with "AI".

That's an interesting explanation for the memory price increase.

LOL 


just ... about about smartphones price increase?

My Motorola G85 died, I am looking for a G86 ... and ... umm.
The G85 is a model from last year, and yet I've seen a sharp price increase of around 80 euros.
That is, they're asking for ~280 euros now, when a few months ago they were asking for 200.

The same also applies to Samsung, Google Pixel, and Nothing models.
And strangely, phones with 12GB of RAM, 8GB + 4GB extra (for I.A. running on the phone? dunno), have increased by 200%.

Maybe people are starting to use their smartphones as "dumb terminal" for GPT chats and the like?

[SiliconWizard]

They will sell you dumb terminals with 256 MB of RAM to talk with "AI".

That's an interesting explanation for the memory price increase.

I don't know if it's really interesting or any kind of "explanation",, but it's a kinda obvious consequence of the situation.

[rteodor]

Raspberry Pi 5 16GB RAM: 149EUR end of January, 303EUR in March.

[SiliconWizard]

Raspberry Pi 5 16GB RAM: 149EUR end of January, 303EUR in March.

Currently 342 eur if you include VAT at the Pi Hut.
The 4 GB version (out of stock) is currently the price of what was the 16 GB version in late 2025.

[radiolistener]

And strangely, phones with 12GB of RAM, 8GB + 4GB extra (for I.A. running on the phone? dunno), have increased by 200%.

Maybe people are starting to use their smartphones as "dumb terminal" for GPT chats and the like?

yes, I started, my motorola has 8 GB RAM 

[DiTBho]

And strangely, phones with 12GB of RAM, 8GB + 4GB extra (for I.A. running on the phone? dunno), have increased by 200%.

Maybe people are starting to use their smartphones as "dumb terminal" for GPT chats and the like?

yes, I started, my motorola has 8 GB RAM 

and now there is also a "Moto G86 Power"  with 24GB RAM, 8GB + 16GB boost, 24GB soldered 
The price is not that insane, ~ 400 euro

But that crazy thing now has more RAM than my computers

• PowerMac G4 MDD, 2004, 2Gbyte of RAM (maxed-out, 4x512MB)
• mac-mini intel, 2009, 8Gbyte of RAM (maxed-out, 2x4GB)
• HP-C8K Workstation, 2004, 16Gbyte of RAM (maxed-out, 8x2GB)

[SiliconWizard]

and now there is also a "Moto G86 Power"  with 24GB RAM, 8GB + 16GB boost, 24GB soldered 
The price is not that insane, ~ 400 euro

But that crazy thing now has more RAM than my computers

No, it only has 8 GB of RAM (which is already pretty beefy for a phone). The extra 16 GB is just flash memory reserved as extra virtual RAM, in other words swapping. It's just that now flash (in form of SSDs) has become so fast that swapping doesn't slow down the whole thing significantly has it used to. Mobile device manufacturers now market this feature as though it was some crazy technology.

[PlainName]

manufacturers now market this feature as though it was some crazy technology

Near-RAM-speed flash is some crazy technology

[Siwastaja]

manufacturers now market this feature as though it was some crazy technology

Near-RAM-speed flash is some crazy technology

If you think about it, DRAM and FLASH is pretty much the same: tiny capacitors which each hold one bit, and some transistors to alter the charge, and some amplifiers to read the tiny charge.

Of course there are some ugly details which change the story, but raw read speed of FLASH memory has been good as long as FLASH memory has existed. When computers transitioned to SSDs, it was the hard-disk era SATA interface which usually limited speed.

The speed and endurance difference is still there to the point RAM isn't going anywhere, but it's interesting nevertheless how the performance gap "disk vs RAM", especially for random access, has dropped from 1000x (mechanical disks) to 10x or something. Out-of-memory and swapping in 2005 meant "you can just barely save your work after 30 minutes of stall, then reboot", now it means "annoyingly slower user experience but otherwise normal use possible".

[PlainName]

Sure, raw read speed is cool, but RAM isn't read-only. Flash is slower to write and something has to managed pages and stuff. Let's say you get the hardware to transparently buffer writes in actual RAM and does background maintenance so your software - and maybe even CPU - aren't aware. I would still say, and probably especially so, that's some crazy technology

[tszaboo]

and now there is also a "Moto G86 Power"  with 24GB RAM, 8GB + 16GB boost, 24GB soldered 
The price is not that insane, ~ 400 euro

But that crazy thing now has more RAM than my computers

No, it only has 8 GB of RAM (which is already pretty beefy for a phone). The extra 16 GB is just flash memory reserved as extra virtual RAM, in other words swapping. It's just that now flash (in form of SSDs) has become so fast that swapping doesn't slow down the whole thing significantly has it used to. Mobile device manufacturers now market this feature as though it was some crazy technology.

Maybe they use SLC mode? That's faster in exchange to less capacity.
https://nz.transcend-info.com/embedded/technology/slc-mode

[PlainName]

I'm not saying it can't be done because, clearly, they are doing it. What I am saying is that the phrase 'crazy technology' isn't far off, particularly if one hasn't been deep diving into this kind of thing.