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News Post: On the Impending Silicon Goods Shortage · Never Post

• 0:10
  Mike Rugnetta: Friends, hello, and welcome to Never Post, a
• 0:14
  podcast for and about the Internet. I'm your host Mike
• 0:16
  Rugnetta. This intro was written on Tuesday, 02/24/2026 at
• 0:21
  03:04PM eastern, and we have a just in time show for you this
• 0:27
  week. In this episode, I chat with Jeffrey Parkin of
• 0:30
  rogue.site and Rory Carroll of alloymag.com about how the chip
• 0:36
  shortage caused by the construction boom in AI data
• 0:40
  centers will come not just for the PC market, but also video
• 0:43
  games, automobiles, and countless other consumer
• 0:47
  industries. How did this happen?
• 0:49
  Why is there no easy way out? And how should you as a consumer
• 0:53
  be thinking about these things? But first, we're gonna take a
• 0:57
  quick break. You're gonna listen to some ads unless you're on the
• 0:59
  member feed. And when we return, we're gonna talk about a few of
• 1:02
  the things that have happened since the last time you heard
• 1:04
  from us.
• 1:07
  Baby, can't you see? I'm calling. A guy like you should
• 1:11
  wear a warning. It's dangerous. I'm falling for six stories this
• 1:17
  week.
• 1:19
  New Mexico has passed the first statewide Internet affordability
• 1:23
  law in The United States. This month, governor Grisham signed
• 1:27
  into law legislation that will allow the state to provide up to
• 1:30
  $30 a month to households to subsidize an Internet connection
• 1:34
  with a statewide cap of $45,000,000 annually. On
• 1:39
  01/01/2022, the Federal Communications Commission
• 1:42
  launched their affordable connectivity program or ACP,
• 1:47
  which according to its own dashboard, set aside a total of
• 1:51
  $14,200,000,000 and spent 715,000,000 per month to help
• 1:58
  American households pay their Internet bills. That program was
• 2:02
  discontinued on 06/01/2024 after funding rollout and adoption
• 2:09
  issues. No federal assistance program is planned to take its
• 2:13
  place, so New Mexico is the first state to take the issue up
• 2:17
  itself.
• 2:22
  TikTok is doing just fine. The platform's US operations were
• 2:25
  recently taken up by a new conglomerate of owners. You can
• 2:28
  see our previous news episode for details on that. And
• 2:31
  following that transition, its user base remains at around 95%
• 2:36
  of what it was beforehand, reports Censor Tower. CNBC
• 2:41
  writes quote, early narratives of a mass user exodus prompted
• 2:45
  by service outages and censorship concerns now appear
• 2:48
  overstated.
• 2:49
  And they continue later, the average daily time spent by
• 2:53
  American users on the platform has since returned to around
• 2:56
  eighty minutes after dipping to an average of seventy seven
• 2:59
  minutes during the week of the reported disruptions, end quote.
• 3:03
  TechCrunch reports that, quote, competing video apps like
• 3:06
  Upscrolled and Skylight Social saw rapid user adoption as some
• 3:11
  looked for TikTok alternatives, end quote. But according to
• 3:14
  widely shared usage data, many people who left appear to have
• 3:17
  returned within days. Hey. Hey.
• 3:25
  Whatever happened to Tmall? The international shoddy goods
• 3:28
  retailer had a meteoric rise alongside competitors like the
• 3:31
  TikTok shop, but has faced recent challenges as regulators
• 3:34
  in Turkey, the EU, and Poland have set their sights on the
• 3:38
  site according to rest of world magazine. The retailer is being
• 3:42
  investigated for misleading advertising, undisclosed
• 3:45
  subsidies from the government of China, and monopolistic
• 3:48
  practices amongst other charges. Since 2024, Tmall's parent
• 3:52
  company, PPD Holdings, has posted a $45,000,000,000 revenue
• 3:57
  loss down from around 60 to 15,000,000,000. In the coming
• 4:03
  year, the expiration of several de minimis duty exemptions
• 4:06
  around the world threatens their bottom line even further.
• 4:12
  The content algorithm on x has real world political impacts. A
• 4:17
  new study in the journal Nature found that people subjected to
• 4:20
  an algorithmic feed on Elon Musk's social network were more
• 4:23
  likely to adopt conservative political positions quote,
• 4:27
  particularly regarding policy priorities, perceptions of
• 4:31
  criminal investigations into Donald Trump, and views on the
• 4:34
  war in Ukraine, end quote. People would follow
• 4:38
  algorithmically promoted, quote, conservative activist accounts
• 4:41
  and would continue following them even after algorithmic
• 4:44
  service was discontinued. People involved in the study, however,
• 4:48
  did not exhibit shifts in self reported effective polarization,
• 4:53
  which is measured via questions about, quote, life satisfaction,
• 4:56
  partisanship, and fueling thermometers for Democrats and
• 5:00
  Republicans. Meaning, though their attitudes may have
• 5:03
  shifted, they were themselves unaware of the shift.
• 5:06
  Jeffrey Parkin: You got more?
• 5:08
  Mike Rugnetta: No. Goldman Sachs has just launched an AI free
• 5:11
  index fund. SPXX AI lets you quote invest in the S and P 500
• 5:16
  benchmark index minus all things AI, reports Axios. This as
• 5:22
  discussion of the so called AI bubble reaches increasingly many
• 5:26
  corners of financial speculation and well, the economy. Funds
• 5:32
  like SPXx AI allow investors the security of a highly diversified
• 5:36
  index while isolating their exposure to what they may feel
• 5:39
  is the risky bet of robots that generate pictures of monkeys in
• 5:42
  bikinis.
• 5:43
  Goldman refers to the stocks which make up the fund as quote,
• 5:46
  old economy stocks. Polymarket has partnered with Substack,
• 5:54
  getting a start on what is quickly shaping up to be the
• 5:57
  nightmare blunt rotation of platforms. The partnership will
• 6:00
  allow, quote, Substack users to integrate Polymarket's
• 6:04
  prediction data directly into their content, end quote.
• 6:07
  According to a thehill.com story that reads a bit like a press
• 6:10
  release, if I'm being honest. Substack claims a fair number of
• 6:13
  their top newsletters are already making use of the
• 6:16
  prediction market platform's data to write about current
• 6:19
  events, with Polymarket going so far as to say journalism is
• 6:23
  better when it's backed by live markets.
• 6:26
  For those not in the know, Polymarket and other related
• 6:29
  platforms like Kalshi allow people to place money on the
• 6:32
  outcome of everyday events, most regularly sports related, But in
• 6:35
  practice, the quote markets range from wagers on the
• 6:39
  likelihood of Jesus' return to The US striking Iran. Polymarket
• 6:43
  and its adherents claim these quote markets provide insight
• 6:48
  into newsworthy events and the unfolding of culturally moments
• 6:51
  thanks to the wisdom of crowds. Something anyone who has spent
• 6:55
  even ten minutes online will know is complete bullshit
• 6:58
  outside the walls of Wikipedia and maybe, let's say, 60% of
• 7:02
  Reddit on a good day.
• 7:04
  Rory Carroll: My lady.
• 7:04
  Mike Rugnetta: And finally, artificial intelligence needs
• 7:09
  Taiwan. The single biggest threat to the world economy, US
• 7:14
  treasury secretary Scott Besson said at Davos last month. The
• 7:18
  single biggest point of single failure is that 97% of the high
• 7:23
  end chips are made in Taiwan, end quote, and everyone wants
• 7:30
  them. No industry more so than tech who has made a run on the
• 7:36
  world's supply of various semiconductor products from
• 7:40
  processors to RAM to storage in their haste to build AI data
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  centers. And this is the case most notably in The US and
• 7:49
  China, two countries currently locked in a heated rivalry.
• 7:54
  The soothsayers for the American economy, which is now not much
• 7:57
  more than a pile of consumer goods balanced atop a few AI
• 8:00
  data center toothpicks, have grown increasingly wary of
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  China's technological advances, going so far as to consider it a
• 8:06
  matter of national security to quote, implement countrywide
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  controls on key choke point semiconductor manufacturing
• 8:14
  equipment and subcomponents, end quote, so that they cannot make
• 8:18
  their way into the country. They are also aware that China could,
• 8:21
  at any moment, blockade Taiwan and cut off the world's supply
• 8:26
  of advanced semiconductor technology. As such, The US has
• 8:30
  been attempting to broker a trade deal with Taiwan. One
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  aspect of which would involve the country assisting in opening
• 8:37
  facilities in The United States with US commerce secretary
• 8:41
  Howard Lutnick claiming the country would move 40% of its
• 8:45
  capacity stateside. Taiwan's vice premier Chen Lichen,
• 8:50
  however, described this outcome as simply not possible.
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  Not only because, in her words, it's impossible to allocate
• 8:57
  based on production capacity, but also because The US doesn't
• 9:00
  currently have the labor pool to support the industry and TSMC,
• 9:05
  Taiwan's largest and most accomplished chip manufacturer
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  who contracts with Apple and Nvidia among others is one of
• 9:12
  the island nation's biggest deterrents against China who
• 9:17
  relies on their output for its own tech sector. Global reliance
• 9:22
  on Taiwan's manufacturing has been called its silicon shield
• 9:26
  against Chinese aggression. The upshot here is any capacity to
• 9:30
  build chips in The US is years and maybe decades away, but
• 9:35
  there is a looming a chip shortage now. One that's about
• 9:39
  to touch upon nearly every major industry, a broad swath of
• 9:43
  consumer goods ranging from video games to cars. How did we
• 9:49
  get to this point?
• 9:50
  What can we expect from the next couple years, and how should we,
• 9:54
  as mere consumers prepare? After a short break, me, Jeffrey
• 10:01
  Parkin, and Rory Caroll discuss. Joining me are Jeffrey Parkin,
• 10:41
  co owner and founder at the independent video game news and
• 10:44
  criticism site rogue.site. Jeffrey, thanks for being here.
• 10:48
  Jeffrey Parkin: Thank you.
• 10:49
  Mike Rugnetta: And Rory Carroll, co founder, publisher and
• 10:52
  editorial director at the independent car culture site
• 10:54
  alloymag.com. Rory, appreciate it.
• 10:58
  Rory Carroll: Hey, thanks for having me.
• 10:59
  Mike Rugnetta: So here on Neverpost and your respective
• 11:02
  sites, we've covered a lot of these headlines. Demand for
• 11:06
  memory and storage space has skyrocketed caused by the
• 11:09
  construction boom in AI data centers. And this means that
• 11:13
  those things are gonna be harder and harder to get a hold of for
• 11:15
  consumers, which means that their prices are gonna
• 11:18
  skyrocket. And this is something that folks, if they want to have
• 11:21
  direct experience of this right now, they can go to newegg.com
• 11:25
  or their computer retailer of choice, search for, let's say,
• 11:29
  RAM sticks or an SSD and, you know, brace themselves. In some
• 11:35
  scenarios, there are prices that are four to five times higher
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  than they were as recently as about a year ago.
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  But the thing that I think has gone a little bit underreported
• 11:46
  in a lot of this is that this is also the case for entire
• 11:50
  industries, two of which, we're gonna discuss with you guys,
• 11:54
  experts in them respectively, right now, video games and
• 11:58
  automobiles. So my first question for the both of you is
• 12:02
  just, when manufacturing and distribution of these things is
• 12:07
  working as expected, like, on a normal Thursday, like, what
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  should this process look like for video games and for cars?
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  Like, who is supplying the components for what purpose and,
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  like, how do they get to where they need to go?
• 12:21
  Jeffrey Parkin: I'm actually gonna jump in first because
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  video games, especially consoles, work on a really weird
• 12:28
  cadence. The PS five and the newest Xbox, the series x, came
• 12:34
  out in 2020. So there's this huge boom in manufacturing and
• 12:40
  releasing them, and then it dies off over the next roughly eight
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  years or so. Ideally, like we saw with the Switch two, there's
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  all of the purchasing of these semiconductors and microchips
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  and RAM and everything else that go into the consoles that you
• 12:56
  buy, and then they just maintain their stock as necessary. And
• 13:01
  the reason that this has come up for us recently, it's about time
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  to be talking about the next generation of video game
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  consoles, like the PS six and whatever bizarre amalgamation of
• 13:16
  letters Microsoft comes up with.
• 13:19
  The news with all of the AI data centers buying up everything is
• 13:24
  that those big companies, Sony and Microsoft, are probably
• 13:28
  going to have to push out their next launch.
• 13:33
  Mike Rugnetta: And so are they buying huge supplies of these
• 13:36
  components for launches and then, like, smaller amounts as
• 13:40
  demand dwindles.
• 13:42
  Jeffrey Parkin: That is my understanding of it.
• 13:43
  Mike Rugnetta: Yeah. Got it.
• 13:44
  Jeffrey Parkin: I know, like, cars come out every year. So I
• 13:48
  imagine that the process is a lot different.
• 13:51
  Rory Carroll: Well, it's actually not super different. I
• 13:53
  think, like, cars do come out and there's a new model year
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  over year, but really cars are on a five or ten year cycle. So
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  what you'll usually get is the introduction of a new model,
• 14:03
  which is like, generally speaking, a whole new
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  architecture, a whole new, you know, from the wheels up new
• 14:09
  car, then you'll get four or five years later, you'll get a
• 14:12
  refresh, which is like, okay, maybe with new headlights, new
• 14:15
  exterior design, some new technology inside, and then
• 14:19
  you'll push that another five years before you kind of get to
• 14:22
  a new model. Sometimes it lasts longer than that. Sometimes it's
• 14:25
  a little bit shorter than that depending on how things are
• 14:26
  selling.
• 14:27
  But that's generally the the schedule. So, you know, the auto
• 14:32
  auto industry is not super different from any other
• 14:34
  industry in that this stuff gets planned, you know, ten and
• 14:38
  fifteen years out. And, like, historically, you know, back
• 14:42
  back in the old old days, you used to you'd build cars in this
• 14:44
  similar cycle. You'd stock up on all the parts that you're going
• 14:48
  to need for the entire production run of the car or or
• 14:52
  you'd you'd have them being built kind of simultaneously.
• 14:55
  And just like every other industry kind of in the last
• 14:58
  twenty, thirty years, everybody has gone to this, like, just in
• 15:01
  time where it's like stuff should ideally be being produced
• 15:04
  and shipped to you exactly the moment you need it.
• 15:07
  So you should not have any stock. You should not because
• 15:10
  all this all the obviously, like, stock and warehousing
• 15:12
  stuff cost money. That's all additional costs. So, like,
• 15:16
  ideally, with anything else, you're getting stuff as it is
• 15:19
  needed the second it is needed on the assembly line. So that's
• 15:24
  kind of like the ideal situation.
• 15:26
  Obviously, the car companies, they've had this happen before.
• 15:30
  This exact thing happened for different reasons in 2021, and
• 15:34
  it was a huge catastrophe for everybody. And they've spent the
• 15:37
  last, you know, five years or so figuring out how to prevent this
• 15:42
  from happening again. Everyone took this very seriously, and
• 15:44
  everybody has taken a lot of kind of affirmative steps to
• 15:47
  prevent it from happening. There are some real difficulties in
• 15:51
  solving this problem.
• 15:52
  I
• 15:53
  Mike Rugnetta: and that you know, Rory, you said something
• 15:55
  that gets to the next question that I wanna ask, which is,
• 15:58
  like, this is a lesson that I have learned maybe a few times
• 16:01
  since the pandemic began, which is, all of this comes from one
• 16:07
  place or, like, a relatively small number of places, and
• 16:11
  there's no plan b? Like, it's just so shocking to me that
• 16:17
  consumer electronics, AI data centers, video games, and
• 16:21
  automobiles are all being supplied by the same relatively
• 16:25
  small number of manufacturers.
• 16:28
  Jeffrey Parkin: No. Yeah. There are big names that supply
• 16:33
  everybody, and it's really specific manufacturing. Like,
• 16:39
  even a company as big as Samsung says that it'll take two years
• 16:43
  before they can get another plant up and running.
• 16:46
  Mike Rugnetta: Well,
• 16:46
  Rory Carroll: yeah. There there are big structural issues with
• 16:49
  spinning this stuff up. And I think too, I I mean, I think
• 16:52
  this is this is something that's kind of plaguing the auto
• 16:54
  industry generally in The States. You know, if you ask a
• 16:57
  car executive if you have asked a car executive anytime in the
• 17:01
  last twenty years what they want from the government, they will
• 17:03
  tell you it's stability. It's like, they don't care what the
• 17:06
  standards are.
• 17:07
  They don't care what the emission standards are, any of
• 17:10
  that stuff. Mean, they do. But, like, the big thing that they
• 17:12
  want is to be able to on this ten or twenty year cycle predict
• 17:16
  what's going to happen. And I think the answer to a problem
• 17:20
  like this in the sixties and seventies would have been, we
• 17:22
  will just build our own semiconductor facility. We will
• 17:25
  just build our own.
• 17:26
  And that may take us a few years, but we're confident that
• 17:29
  coming out of the other end of it, it'll be a good investment
• 17:32
  and we'll have control over our own supply chain and yada yada.
• 17:34
  That's obviously not the response you're getting now. I
• 17:38
  think a lot of that is this instability where it's like
• 17:42
  you're gonna face these kind of transient issues for a period of
• 17:47
  time. The world is going to change change very drastically.
• 17:50
  You don't wanna be stuck with the factory that's at lower
• 17:53
  capacity or working at low capacity.
• 17:55
  And it's like you can't trust the state or you can't trust the
• 17:59
  the government to to be asking you to do the same things from
• 18:03
  administration to administration, which is like a
• 18:05
  very strange I mean, it's to me, like, as a as a watcher of the
• 18:08
  car business, watching the government act in kind of
• 18:11
  defiance of the car business, like, very strange. Like, that's
• 18:15
  a that's never happened to me before. I've never seen that
• 18:17
  happen in my lifetime. Or it's happened, like, Clean Air Act.
• 18:20
  You know what I mean?
• 18:20
  Like, big momentous. But but this is, day to day, hey. We
• 18:26
  understand that's what you need to be competitive globally, but
• 18:28
  we're not giving it to you. Like, that's never happened
• 18:30
  before. It's difficult to imagine any other response for
• 18:33
  an automaker but to just hoard whatever they can get from their
• 18:38
  suppliers today.
• 18:39
  What else would you do except buy as many chips as you can,
• 18:42
  which is the same response that every other manufacturer is
• 18:45
  having.
• 18:45
  Jeffrey Parkin: I actually wanna step back for a second because
• 18:49
  as somebody who knows how to turn on a car and not much else,
• 18:53
  my first reaction in seeing that, like, the PS six is
• 18:58
  running up against car manufacturing was kinda
• 19:01
  confusion. Yeah. And I have since come to realize, like,
• 19:05
  it's not just the in dashboard displays that this is affecting.
• 19:10
  Can you, Rory, talk about where these chips are even going and
• 19:14
  what they're used in?
• 19:16
  Rory Carroll: Oh, yeah. I think that, you know, the the most new
• 19:20
  cars these days will have more than a thousand of these chips.
• 19:24
  Some of them have way more than that. But I think what we're
• 19:29
  looking at in a a modern car, I think people are, like, very,
• 19:32
  very apt to say, like, a car is a computer on wheels these days.
• 19:36
  And it's I think, like, that actually undersells it quite a
• 19:39
  bit because the amount that you're asking a car to do, a
• 19:43
  modern car, just to move down the road as far as, like,
• 19:46
  computing demand is crazy.
• 19:48
  I mean, the the easy stuff, like, okay, who's you know, how
• 19:52
  are you controlling the infotainment screen in a a car
• 19:55
  in the eighties? Your HVAC, so heat and cold and all that stuff
• 20:00
  would be controlled by a series of cables. That's all digitally
• 20:03
  controlled now. How do you open your gas cap door? There's that
• 20:07
  that kind of stuff, but there's also the actual behavior of the
• 20:11
  car is is very heavily controlled by computers.
• 20:15
  So I think, like, as cars have gotten larger, the cars have in
• 20:19
  turn gotten heavier. Batteries, especially like modern cars with
• 20:23
  with hybrid batteries or EV batteries, got very heavy. And
• 20:27
  in order to keep the car, like, moving down the road safely,
• 20:31
  that requires a ton of computing power. So you have sensors that
• 20:33
  are reading your wheel speed. You have sensors that are
• 20:35
  reading brake temperature.
• 20:36
  You have sensors that are reading comparing all that stuff
• 20:40
  together and then making the actual suspension or brakes in
• 20:44
  the car behave a certain way to either maintain your comfort or
• 20:49
  to maintain traction on the road. So it's like I mean,
• 20:52
  there's there's this is like a longer discussion, but I I had
• 20:54
  this super long discussion with Porsche a few months ago. Their
• 20:58
  their cars have gotten, as all cars have, have gotten heavier
• 21:01
  and heavier and heavier. Over the last ten years, as they know
• 21:04
  this, they they recognize the cars are getting heavier. So
• 21:06
  they have now three separate suspension technologies that are
• 21:11
  designed to mask the weight of the car for the driver.
• 21:14
  So the car in real time is sensing where it is in the road
• 21:18
  and then in some cases, like it's being suspended from a
• 21:21
  helicopter adjusting the pitch Woah. And the dive of the car to
• 21:26
  erase the sensation that you would have of a very heavy car
• 21:29
  diving under braking. There are all these knock on effects that
• 21:32
  make these cars infinitely more complicated and heavier and
• 21:37
  technically better. Like they are faster, they're more
• 21:39
  efficient, they're, you know, they're yada yada yada. Like
• 21:41
  they do all this other stuff.
• 21:43
  The cars are being asked to defy physics. They're being asked to
• 21:48
  deliver performance and efficiency that, like, should
• 21:51
  not be possible. And, like, that's how you end up with 3,000
• 21:53
  sensors in the car. It's like or 3,000 chips. Like, that's how it
• 21:57
  happens.
• 21:57
  Mike Rugnetta: The car is not a not necessarily a computer on
• 22:00
  wheels, but a data center on wheels, and therefore, the the
• 22:05
  competition there is maybe makes a little bit more sense. I'm
• 22:08
  curious. I would love to ask you to a question that I don't you
• 22:12
  might not know the answer to, but I'm curious if you've come
• 22:15
  across a justification in the reporting that you've done so
• 22:18
  far, which is like, is there a business case for chip
• 22:22
  manufacturers to supply data centers almost exclusively?
• 22:27
  Because it seems like there's so much of a downside, you know,
• 22:30
  just maybe societally or, you know, with in their relationship
• 22:35
  with other industries. Like, are they being paid more per chip by
• 22:40
  Sam Altman and crew?
• 22:42
  Jeffrey Parkin: The answer is and I'm gonna try to avoid,
• 22:46
  like, angry phrases like short termism here,
• 22:49
  Rory Carroll: but Sure.
• 22:50
  Jeffrey Parkin: Data center hyperscalers like Meta, Google,
• 22:53
  Amazon are buying 70% of the supply of these semiconductors
• 23:01
  at this point, there's absolutely no reason not to sell
• 23:06
  to them.
• 23:07
  Mike Rugnetta: Mhmm.
• 23:07
  Jeffrey Parkin: If they're building half $1,000,000,000,000
• 23:10
  worth of data centers this year, why wouldn't you get in on that?
• 23:15
  Yeah. And that's exactly what we saw with Micron just a few
• 23:19
  months ago. Micron, shut down their consumer RAM supply to
• 23:26
  focus exclusively on high bandwidth memory for data
• 23:30
  center.
• 23:31
  Rory Carroll: I think this whole thing is a really interesting I
• 23:33
  think, like, this is one of the fun things about cars generally,
• 23:37
  but it's like you get all these great illustrations of kinda
• 23:41
  like what the limits of the system are. You know, you have
• 23:45
  all of these companies acting in their own short short term self
• 23:48
  interest because they're all responsible to their
• 23:51
  shareholders on a quarter by quarter basis, and they're all
• 23:55
  so well optimized. They all know exactly what kind of a shortage
• 23:59
  they can survive and what kind of where they can get extra
• 24:02
  supply when they need to. Like, this they they know so much, but
• 24:06
  there's so little incentive for anyone to make a long term
• 24:11
  investment in anything. Even if they know down the road, it
• 24:14
  would it would help them or whatever.
• 24:16
  The risk or the the fear of of being kind of hung out on a big
• 24:21
  investment is it keeps people from making those long term
• 24:25
  decisions. And I think, like, you run up against these, and I
• 24:29
  think, like, all of manufacturing in The United
• 24:30
  States and all these kind of big companies in United States are
• 24:32
  running up against these, like, very hard limits to what this
• 24:38
  economic system will do. Yeah. Which is really, really
• 24:42
  fascinating. I mean, it's it's it'd be fun to watch if it
• 24:46
  wasn't like
• 24:46
  Mike Rugnetta: Us.
• 24:47
  Rory Carroll: Your four zero one k. Yeah.
• 24:50
  Mike Rugnetta: It makes me think of, you know, like, I see in
• 24:52
  reporting, you know, Apple is able to say that they are gonna
• 24:57
  be able to continue manufacturing phones and laptops
• 25:00
  and, you know, a bunch of their a bunch of their goods without
• 25:03
  having to increase prices or not having to increase them too much
• 25:07
  because they were able to secure these long term supply deals
• 25:10
  with all of these manufacturers. And I'm assuming it's just the
• 25:14
  case that, like, they are able to do that, and they're able to
• 25:16
  do that with confidence and at the scale that they can because
• 25:18
  they are Apple. And that as big as the video game industry and
• 25:22
  the automobile industry are, they just aren't Apple, and so
• 25:26
  they aren't doing long term deals. You know, they're they're
• 25:30
  doing the sort of just in time production like you described,
• 25:32
  Rory. Is that that's the case?
• 25:34
  Rory Carroll: Yeah. It's a buying power
• 25:35
  Mike Rugnetta: thing. Yeah.
• 25:35
  Rory Carroll: A good year selling cars in The United
• 25:37
  States is, like, 15,000,000 cars.
• 25:38
  Jeffrey Parkin: Yeah. And that's that's slightly less than the
• 25:42
  Switch two is sold Yeah. Since last July, I think.
• 25:47
  Mike Rugnetta: So it's just orders of magnitude of
• 25:49
  difference.
• 25:50
  Jeffrey Parkin: A really good comparison that I had to look up
• 25:52
  because I just didn't know. NVIDIA's Next AI card, like the
• 25:59
  entire card that you plug into a server rack, has about 30 times
• 26:05
  as much RAM in it as a standard computer or or a PS five for
• 26:10
  that matter. So Yeah. A single card that goes into those giant
• 26:15
  server racks at a data center of which there are hundreds of
• 26:20
  server racks. So suddenly, it's these numbers are
• 26:24
  incomprehensibly huge.
• 26:26
  Rory Carroll: Yeah. And there there is a really interesting I
• 26:28
  mean, again, another interesting kind of case study. You know,
• 26:30
  the the CHIPS Act under the Biden administration was one of
• 26:35
  these kind of, like, efforts by the federal government to kind
• 26:38
  of address this issue. And they they ended up passing a bill and
• 26:42
  getting a bunch of money appropriated. The kind of
• 26:46
  intervening whatever it's been four or five years since getting
• 26:50
  these facilities up and running has been massively difficult and
• 26:54
  complicated.
• 26:55
  And I think, like, the Biden administration towards the end
• 26:58
  was kind of scrambling to get this money spent and ended up
• 27:01
  giving up on a bunch of, like, labor and environmental
• 27:03
  protections that they had promised to get this stuff
• 27:05
  through. Getting them built is one thing. It's very expensive
• 27:10
  compared to places elsewhere in the world where you'd build
• 27:12
  them. The United States does not have the labor force for this,
• 27:17
  like people who aren't accustomed to doing this. And
• 27:19
  then also their supply chain getting these materials
• 27:22
  delivered.
• 27:23
  Like, this is a very mature industry elsewhere in the world,
• 27:27
  in China specifically, and like it is very, very difficult
• 27:32
  without a moonshot level kind of investment and kind of some very
• 27:36
  strong handed public policy
• 27:38
  Mike Rugnetta: Yeah.
• 27:38
  Rory Carroll: To imagine, like, moving something like that to
• 27:41
  The United States.
• 27:42
  Mike Rugnetta: I'm curious if there is you know, the story of
• 27:46
  artificial intelligence over the last couple years has been it's
• 27:50
  being taken up by increasingly many industries, released the
• 27:55
  upper level management and the c suite of various actors within
• 27:59
  those industries insisting that it be implemented or used at
• 28:04
  certain points. And I'm curious if you have a sense of if there
• 28:07
  is now, like, inter industry drama, for lack of a better
• 28:11
  phrase. Like, is the automobile industry looking at the tech
• 28:15
  sector? Is video games looking at tech and being like, dog,
• 28:18
  like, what the fuck? You know, like, we I thought we were in
• 28:21
  this together, and now, like, like, this makes everything so
• 28:24
  much harder.
• 28:25
  Jeffrey Parkin: Like you said, it's the c suite. Like,
• 28:27
  everybody up top is talking about how AI is gonna change
• 28:31
  everything, and the people who are actually doing it don't
• 28:36
  care. Like, don't use it, don't want it. We focus a lot on indie
• 28:41
  games just because there are more of them and they're more
• 28:44
  interesting to talk about sometimes. But you're starting
• 28:47
  to see, like, made by a human in in game descriptions, and, like,
• 28:52
  no AI was used.
• 28:55
  At the same time, you're starting to see pushes for
• 28:58
  disclosures because there are, Steam Next Fest starts today.
• 29:03
  There's a bunch of demos of people promoting their games,
• 29:07
  and even Steam is starting to push for, not require, a
• 29:13
  disclosure for how AI was used. And I saw my first one today
• 29:18
  that was AI was used in the coding of this game.
• 29:22
  Rory Carroll: You know, the car industry has been really funny,
• 29:24
  especially over the last, like, twenty, thirty years because the
• 29:27
  people now who are like in charge of car companies are like
• 29:29
  in their fifties and sixties. And they all have like this kind
• 29:32
  of scar tissue from from the Internet and then from social
• 29:36
  media and like where it's like they felt like they got left
• 29:39
  behind. And so the result of that has been over this last,
• 29:44
  say, ten, twenty years of kind of like the technology flim flam
• 29:49
  era of like building and selling technologies that don't really
• 29:52
  have a use case. They've been very eager to get wallet
• 29:56
  inspected by the Silicon Valley set. And to to their credit, I
• 29:59
  mean, I think, like, everybody watched Tesla's stock valuation
• 30:04
  go to $400 or $600 or whatever it was.
• 30:07
  And GM who made $12,000,000,000 in a profit last year is, like,
• 30:12
  at 60. And I think a lot of their board members are saying
• 30:15
  like, hey. Why isn't it not like that for us? And the answer to
• 30:18
  to that for a lot of these companies has been to get very
• 30:21
  heavily invested in the next bleeding edge tech around, like,
• 30:27
  design and around manufacturing, but also around, like,
• 30:30
  autonomous cars and ride sharing and and all this other stuff. I
• 30:33
  think, like, right now, we're seeing most of those companies
• 30:38
  feeling like they've been burned by that.
• 30:40
  I don't think there's, a like you said, I don't I don't think
• 30:43
  there's, like, a rivalry thing happening. I don't think the
• 30:45
  auto industry is under any illusions about, like, being on
• 30:47
  the same team as any other industry.
• 30:49
  Mike Rugnetta: Yeah. Sure.
• 30:50
  Rory Carroll: But I I do think that this this has felt a little
• 30:53
  bit more cautious. I mean, like, I watched companies dump tens of
• 30:57
  millions of dollars into having a virtual storefront in the
• 31:00
  metaverse, like, three years ago or whatever or, like, do NFT
• 31:04
  stuff a few years ago. They seem to be a little bit closer to
• 31:08
  hedging, I think, on this thing than they have, which is good.
• 31:11
  Like, that's Yeah. That's smart.
• 31:12
  That's a that's like an indication of having learned a
• 31:14
  lesson. Yeah. As someone who is screaming when car companies
• 31:18
  were opening up metaverse dealerships, this is like a
• 31:21
  welcome development.
• 31:22
  Jeffrey Parkin: It has always felt like I grew up when
• 31:25
  computers were in a computer room, and that's the place where
• 31:28
  you went. But it's always felt like there's this disconnect
• 31:31
  between real world, like, your car in the driveway stuff and
• 31:37
  entertainment and electronic stuff is over here. And in
• 31:42
  writing about this and living in 2026, that disconnect between
• 31:49
  the computer room and the driveway just doesn't exist
• 31:53
  anymore. Yeah. There's what, three, four companies that make
• 31:58
  this stuff
• 31:58
  Rory Carroll: Yeah.
• 31:59
  Jeffrey Parkin: At a at a handful of factories in the
• 32:01
  world.
• 32:02
  Rory Carroll: There are a few of these companies making the the
• 32:04
  chips, but it's like there's one supplier for the machine that
• 32:08
  actually writes the thing. It's like, that's nuts. Like, that's
• 32:11
  crazy. Fifty years ago, you would build excess capacity. In
• 32:16
  the current situation, it's like everything is running on this
• 32:19
  kind of bare minimum up and down the board, not just cars and not
• 32:22
  just chips, not just like, everything across the board is
• 32:26
  running on this bare minimum, like, the all of global
• 32:30
  electrical infrastructure or at least like North American
• 32:32
  electrical infrastructure, which is like, okay, what's the
• 32:35
  minimum amount of money we can invest and still make a return
• 32:39
  on this?
• 32:39
  Mike Rugnetta: I mean, how ironic is it? Right? That it's
• 32:41
  like you look at how you might ameliorate some of these
• 32:44
  problems and you start to think about the resources that would
• 32:47
  go into doing that. And it's not like they don't exist. It's just
• 32:51
  they're all tied up in the bank accounts of tech billionaires
• 32:53
  who are investing in, you know, AI data centers and and the
• 32:58
  like.
• 32:59
  Rory Carroll: That money could be working in the economy, the
• 33:03
  broader economy.
• 33:03
  Mike Rugnetta: I mean, it's funny to think about what's
• 33:05
  going into making AI data centers and, you know, did they
• 33:08
  just skip a step? Should they have first sat down and been
• 33:12
  like, well, first, we need some factories. Let's get some
• 33:14
  factories first and then Yeah.
• 33:16
  Rory Carroll: I mean, there's there's no money in doing that.
• 33:18
  You're not gonna get to euro.
• 33:19
  Mike Rugnetta: Nope.
• 33:19
  Rory Carroll: But again, it's like a that's a just a weird
• 33:21
  expression of the the system now. It's just like, wow. That's
• 33:25
  these contradictions are getting heightened.
• 33:27
  Mike Rugnetta: Yeah. Surely, that's not a bad sign. I'm
• 33:30
  curious, like, for you guys, like, what is there stuff that
• 33:33
  people should, like, look out for? Like, what's gonna happen
• 33:36
  next? What is the attitude a consumer should have at the
• 33:40
  moment?
• 33:41
  Rory Carroll: A good question. I mean, the the price shift will
• 33:45
  be slower in cars than it will be anywhere else because sales
• 33:49
  are so sensitive to price. I think, like, you know, you'll
• 33:52
  see massive swings in profitability based on a $2,500
• 33:57
  or $1,500 cash incentive on the hood of a car the hood of a
• 34:01
  $50,000 car. Like and the margins on them are very, very
• 34:05
  small. So I think, like, you know, now if you're a consumer,
• 34:08
  it's not a time to freak out.
• 34:11
  If you can stomach the super high interest rates that you'll
• 34:14
  pay for a new car right now, it's fine to still do. And I
• 34:17
  would also say, like, twenty years ago, the response to a
• 34:21
  situation like this or the response to 2021 would be go buy
• 34:25
  a used car. Used car prices have come down a little bit since the
• 34:31
  early twenty twenties, but they're still very strong. I
• 34:35
  mean, the idea or the the time when you go buy a good car for
• 34:38
  $2 or $2,500 and have it last you a while is that's
• 34:42
  increasingly difficult to do. I mean, I think, like, table
• 34:45
  stakes now is, $10 and up.
• 34:48
  So there's not a there's not a hack to work your way around it.
• 34:51
  It's kind of like, unfortunately, if you need a car
• 34:54
  to get around and live your life, they kind of have you. So
• 34:57
  it's it's gonna be a minute before this starts impacting new
• 34:59
  car prices and and affordability, which is, like,
• 35:01
  also, know, there are no cars available in The United States.
• 35:04
  New cars under $20,000. The average sale price is over
• 35:08
  $50,000.
• 35:09
  So there's a whole separate affordability conversation to be
• 35:13
  had. So, yeah, you're kinda screwed, I guess, is the is my
• 35:16
  positive answer to that.
• 35:17
  Jeffrey Parkin: Yeah. I I actually kinda have the same
• 35:22
  reaction of you're kinda screwed because what started this entire
• 35:27
  conversation was in October, I built myself a gaming computer,
• 35:35
  like, from scratch just to prove I could that would compete with
• 35:40
  a modern console, and I did it for just over $800, and I was
• 35:46
  really proud of it. It it works great. This is this is great. I
• 35:50
  checked my shopping list just a couple of days ago, and it's
• 35:54
  over $1,400.
• 35:57
  So it's gone up by 75% in four months. Electronics, consumer
• 36:03
  electronics, gaming is all about the latest and greatest, but,
• 36:07
  like, I think the answer really is, if you've got something
• 36:11
  that's good enough, keep using it. Yeah. You don't need the
• 36:14
  latest and greatest, because it's it's going to be a a huge
• 36:20
  disconnect through this year and probably well into next year
• 36:26
  Rory Carroll: Yeah.
• 36:26
  Jeffrey Parkin: Before anything gets sorted out. It's just not
• 36:30
  the time to upgrade. Yeah. Which is a larger conversation about
• 36:34
  planned obsolescence and the disposability of all our
• 36:38
  electronics, but kinda time to hold off on upgrades, I think.
• 36:42
  Rory Carroll: Yeah. If you can hang on to your car, keep
• 36:44
  driving. I mean, even if this chip thing wasn't happening,
• 36:47
  just the interest rate thing is, like, reason enough to just keep
• 36:49
  driving whatever piece of shit you're driving. That that's my
• 36:52
  advice.
• 36:53
  Mike Rugnetta: K. Don't freak out. You're kinda screwed, but
• 36:56
  hang on to your piece of shit as long as you can.
• 36:58
  Rory Carroll: That's my advice for life is hang on to your
• 37:01
  piece of shit.
• 37:04
  Mike Rugnetta: Jeffrey, Rory, thank you so much for joining us
• 37:07
  to chat about this stuff. This has been fascinating.
• 37:10
  Rory Carroll: Glad to be here. Thanks for having me.
• 37:11
  Jeffrey Parkin: Yeah. Thanks for having us.
• 37:13
  Mike Rugnetta: Jeffrey, where can people find you on the
• 37:15
  Internet?
• 37:15
  Jeffrey Parkin: I write at rogue.site. Several other
• 37:20
  coworkers and I from one of the big name places started it as
• 37:25
  our independent site. It's about video games and kind of
• 37:29
  everything around it, and it's kinda where I write angry news
• 37:34
  pieces lately.
• 37:35
  Mike Rugnetta: Hard to write anything else at this
• 37:37
  Rory Carroll: point. Yeah. Yes.
• 37:39
  Mike Rugnetta: Rory, what about you?
• 37:40
  Rory Carroll: Alloymag.com. It's a new car site, new approach. I
• 37:44
  think if you go check it out, it's it's unlike anything that's
• 37:47
  being done in in cars anywhere else. And then we're on blue sky
• 37:52
  at alloy underscore mag. I am personally on blue sky at
• 37:57
  rory_carol.
• 37:59
  And I think, yeah, that's those are all good places to find me.
• 38:02
  If you need to find more than that, then text me or something.
• 38:04
  Text me.
• 38:05
  Mike Rugnetta: What's wrong with you? What else do you need? And
• 38:07
  we'll put links to all those things in the show notes. Thanks
• 38:09
  again, fellas. Really appreciate it.
• 38:11
  Rory Carroll: Thank you.
• 38:11
  Jeffrey Parkin: Thank you.
• 38:51
  Mike Rugnetta: That is the show we have for you this week. We
• 38:54
  are gonna be back here on the main feed next week on or around
• 38:57
  Thursday, March 5. For $4 from craigslist.org in the Brooklyn
• 39:04
  area, you can currently purchase. Okay, let's see, a
• 39:15
  rapid mac cooker, world's fastest and easiest way to cook
• 39:18
  mac and cheese, A glass teapot warmer that you put a candle in
• 39:23
  the middle of, it looks like, and you put the teapot on top of
• 39:26
  it. This looks dangerous.
• 39:28
  A, what is described as an adorable sphere metal box useful
• 39:33
  for anything, jewelry, keys, change, candy, etcetera. On the
• 39:38
  top of it, it says in French, a little sugar, a vintage Walt
• 39:43
  Disney World's Epcot silver coated smoked glass mug stein.
• 39:49
  Okay. Listen. I'm not gonna lie.
• 39:51
  I'm not like a Disney person, but this thing slaps. It's just
• 39:55
  a big silver mug. You can get a savarin tin coffee can, one
• 40:01
  pound tin that looks like something that you would find on
• 40:06
  the ground in a Fallout game or pink fleece pants with Furby on
• 40:13
  them for some reason Or or you could get a month of membership
• 40:18
  at neverpo.st and support your local internet news theory and
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• 40:32
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• 40:35
  It's mine. Neverpost's producers are Audrey Evans, Georgia
• 40:46
  Hampton, and the mysterious doctor first name last name. Our
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  senior producer is Hans Buto. Our executive producer is Jason
• 40:52
  Oberholzer. Show's host, that's me, is Mike Rugneva.
• 40:59
  So we commissioned a document about sustenance in the city's
• 41:03
  pores, metaphors of food and skin for when the water rises.
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  Wired the desirable apartments, caves in units, strange hotels,
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  possible domesticities before the water rises. Commissioned a
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  report detailing repose densities for stones from a
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  point of view superior to where the anger rises. Excerpt of risk
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