Source: Techmeme
The market is pricing in a structural shift from hardware abundance to software efficiency—Google’s compression breakthrough signals that AI scaling no longer requires proportional increases in chip demand, fundamentally undermining the memory semiconductor industry’s growth thesis that has fueled trillion-dollar valuations. This reveals a dangerous pattern where AI infrastructure investors are discovering that algorithmic innovation can do the work of capital expenditure, collapsing the moat that made memory chips the perceived “picks and shovels” play of the AI boom.