Shridhar Vembu, founder of the Indian technology company Zoho, has expressed concern over the current artificial intelligence (AI) race. He noted that massive financial investments in AI and data centers are no longer only affecting large tech corporations but could also impact the pockets of ordinary citizens.
According to Vembu, colossal expenditures on AI and data centers are leading to increased prices for memory chips. This, in turn, may make phones, laptops, and other gadgets more expensive.
A fierce race in the field of AI is underway globally, involving giants such as OpenAI, Google, Microsoft, and Meta. These companies are intensively developing large-scale AI models and data centers. All of this requires a huge amount of chips, graphics processing units (GPUs), servers, and RAM.
Shridhar Vembu recently raised the issue of rising memory prices. Previously, the industry considered memory a relatively accessible and cheap resource during software development. However, the situation has changed: the increasing cost of memory and AI tokens complicates doing business.
Large volumes of specialized memory are required for training and operating AI models. Major chip manufacturers are now focusing more on high-performance memory used in AI data centers because the potential profit there is higher. Nevertheless, this creates a risk of pressure on the supply of general-purpose memory used in phones and laptops.
Concerns about this already existed in the tech industry. Reports indicate that increased demand from AI data centers is putting pressure on the supply of RAM chips and storage drives, which is reflected in the cost of smartphones, PCs, and other electronic devices.
Reports show a significant jump in the prices of certain DDR5 memory kits over the past twelve months, with increases sometimes being multiple times higher. This is why Vembu emphasized that memory can no longer be viewed as a secondary matter. Now, software and AI systems must be optimized to run efficiently with less memory.
Phones and laptops contain components such as RAM, storage drives, and processors. If the cost of these components rises, it becomes harder for companies to sell new devices at previous prices. While some firms might temporarily absorb the increased costs, if the rise in expenses continues, some of this burden may be passed on to the end consumer.
According to a recent Axios report, AI companies and major hyperscalers are trying to reserve memory supplies for future years. This will force PC and phone manufacturers to compete for limited supply volumes.
Shridhar Vembu had previously voiced another serious concern regarding the impact of AI. He noted that IT companies are creating fewer new jobs than before. In his words, funds that could previously have been directed towards employing new staff are now being spent on data center and AI infrastructure.
His new worry is now related to rising costs for computing power and memory. Thus, the impact of the AI race manifests in several aspects: questions about employment arise, company costs increase, and now this may affect the price of phones and laptops for ordinary people.
