Code and Culture

Bundling Status

In my 2014 Sociological Theory, I argued that some things are gross or illegal to buy overtly and so people sometimes find ways to create exchange circuits that obfuscate the transactional nature. In one paragraph I noted that status “differs somewhat from other cases discussed here insofar as it is not exactly disreputable for firms to sell status a la carte so much as it is impossible because status only exists if it is agreed to exist and third parties would not be impressed by an open sale of status.” The example I gave in 2014 was that Apple’s relationship with its suppliers was one of bundling status with electronics or manufacturing since some Apple suppliers sold to it at close to cost.

In Matt Yglesias’s Substack this morning, I see another example, this time between OpenAI and AMD. OpenAI spends a lot of money on GPUs as the growth medium for shoggoths that will begin by helping students cheat on homework and then in the near future give us a best case scenario of a global recession as the AI bubble collapses, a worst case scenario that SkyNet unleashes a bioengineered plague, and a most likely scenario where we see radical transformations to white collar employment and massive political upheaval as AI increases returns to capital and has highly uneven effects on returns to either human capital or raw labor. Heretofore, OpenAI bought those GPUs from Nvidia, a company that everyone knows make the best GPUs and we know that in part because OpenAI buys them.

If you are Nvidia, this is awesome, line goes up. If you are OpenAI this is not great. As anyone who spent a year on the PS5 waiting list knows, GPUs are very hard to manufacture and so weakly elastic, which means increased demand creates rents for the manufacturer. So OpenAI would gain leverage with Nvidia if it could plausibly defect to Nvidia’s competitor, AMD. (Intel mostly makes integrated GPUs, which are better suited for laptops than AI server farms). So it makes sense for OpenAI to diversify its supply chain and buy some AMD chips.

This benefits OpenAI, which gets cheaper chips from both AMD and Nvidia, but it benefits AMD even more, as their GPUs are now certified as good enough for the market leader in a transformative industry. But the certification as good enough for OpenAI wouldn’t work if AMD just gave them the GPUs and it definitely wouldn’t work if AMD paid OpenAI to accept their chips. So what they did was issue AMD shares to give OpenAI  and at the same time OpenAI paid cash for GPUs. After the GPU sale, the shares predictably rose in value by more than enough to benefit both companies and hence we see a successful bundling of status and a commodity.

October 16, 2025 at 4:52 am GR