Tech and IPO market analysis (with Dani Burger)

Questions whether Micron's 86% margins are bad news for others in the tech ecosystem, and asks about OpenAI's IPO delay.

Dani Burger

Ed Ludlow

Micron's higher pricing, while good for Micron, means higher prices for end markets including consumer electronics, creating potential inflationary effects. Historically, memory margins have never been maintained at elevated levels.

The story changed quickly over 24 hours. Micron has control over pricing for high-bandwidth memory due to data center demand, but consumer electronics have no choice but to pay higher prices.

Asks whether the memory cycle is different this time, referencing a Wall Street Journal story about Micron's pricing strategy.

Dani Burger

Ed Ludlow

The market describes this as an up cycle in memory, but whether the boom-bust pattern is broken remains unknown. The risk is that if demand falls away after tens of billions in fab capacity investment, those assets become worthless.

This is highly analogous with GPUs. The public statements about boosting supply contrast with underlying concerns about demand sustainability.

Asks whether OpenAI's IPO delay is an OpenAI-specific problem or reflects broader market conditions post-SpaceX.

Dani Burger

Ed Ludlow

There are many capital market considerations beyond OpenAI-specific issues. Finite pools of capital are being competed for by Alphabet ($84B equity), SpaceX (largest IPO in history plus bond market), SK Hynix (US listing), and Anthropic (preparing for IPO). All pitch the same story to the same investors.

The New York Times piece notes bankers are worried about retail investor participation in OpenAI. SpaceX bonds are showing paper losses in the secondary market.

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