Artificial Intelligencer: The AI gold rush is coming in your devices

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For our international tech editor Ken Li, the AI growth hit residence whereas purchasing for a Christmas present: his 13-year-old son’s first gaming PC. What ought to have been a simple buy became a pricing nightmare. Those gaming rigs sporting the most recent {hardware} had been 60% dearer than they had been merely just a few weeks in the past, revealing the non-public price of the reminiscence chip scarcity introduced on by the AI growth and now squeezing the patron provide chain.

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A brand new sort of chip scarcity has Wall Street buzzed

The AI growth has an sudden aspect impact, and it is heading in your pockets. The value of your subsequent smartphone or PC is probably going going up—not due to flashy new AI options, however due to a world scramble for some of the fundamental elements inside: reminiscence chips.

The squeeze spans practically each sort of reminiscence — from humble flash chips utilized in USB drives and smartphones to high-bandwidth reminiscence (HBM). HBM acts like a multi-lane freeway that feeds knowledge to power-hungry AI chips, and costs for some varieties have greater than doubled since February.

Chipmakers are naturally following the cash and in doing so, they’re ravenous the whole lot else. Producing HBM for AI servers is extra worthwhile than making standard reminiscence for telephones, laptops and TVs. As a consequence, producers are diverting capability towards AI at a time once they nonetheless can’t produce sufficient high-end chips to maintain up with demand.

Consumers are already feeling the crunch. In Tokyo’s electronics district of Akihabara, retailers have begun proscribing reminiscence purchases to curb hoarding. Samsung has warned that the scarcity impacts the whole lot from telephones to TVs and residential home equipment. Chinese smartphone makers Xiaomi and Realme stated they might have to lift costs or deal with promoting extra premium fashions. IDC and Counterpoint now anticipate the worldwide smartphone market to shrink subsequent 12 months as greater reminiscence prices filter by.

Memory makers are increasing, however aid received’t come shortly. SK Hynix has stated its 2026 manufacturing is offered out, whereas Samsung says prospects have already lined up for subsequent 12 months’s HBM. New factories for standard reminiscence received’t meaningfully come on-line till 2027 or 2028.

Memory has at all times been a cyclical enterprise, swinging between brutal busts and euphoric booms. What’s completely different this time is that AI is pulling the cycle ahead, draining provide from on a regular basis gadgets to feed knowledge facilities. There’s additionally a longer-term threat baked into this scramble. The business hasn’t seen significant unit development in years, but it’s now being requested to soak up unprecedented capital spending to serve AI workloads. New fabs price tens of billions of {dollars} and take years to return on-line, which implies at present’s scarcity might simply develop into tomorrow’s oversupply if AI demand slows or shifts.

For now, the one certainty is that the AI gold rush is on, and the value of admission may simply be hidden in the price of your subsequent gadget.

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To put it in numbers, annual AI funding has surged from simply over $70 billion to greater than $210 billion lately, with deal counts up 24% over that interval. Unlike the broad-based funding surge in 2021, this wave has all of the capital concentrated into hyper-focused AI bets — massive mannequin builders, infrastructure suppliers, and AI-native platforms — whereas funding for non-AI startups has slowed to a trickle.

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