AI memory demand to surge 625x by 2028: Dell CEO
What's the story
The demand for memory chips has skyrocketed in recent months, primarily due to AI data centers. This surge has led to a steady increase in RAM prices over the past few weeks, making many electronic devices more expensive. However, Dell CEO Michael Dell warns that this is just the beginning of a potential crisis where companies might have no option but to pay whatever price manufacturers demand for memory chips.
Demand surge
Dell's prediction of a RAM crisis
Speaking at a recent Bank of America event, Michael Dell predicted that total memory demand in AI infrastructure could see unprecedented growth by 2028. He said, "As memory per accelerator and system scale expand simultaneously in AI infrastructure, a structure is forming where total memory demand increases by approximately 625 times." This prediction highlights the potential future challenges for the industry as it grapples with an ever-growing need for RAM.
Supply challenge
Memory supply might not meet demand
Dell also highlighted that the memory supply capacity might not be able to meet this increased demand. He said, "While it takes years to expand memory supply, current demand for AI infrastructure is not slowing down." Dell explained that the memory per AI accelerator is expected to grow from 80GB in 2022 with NVIDIA's H100 to around 2TB by 2028, a whopping 25-fold increase.
Market impact
Potential impact on consumers and companies
The rise in RAM prices could make products more expensive, possibly deterring consumers from purchasing new devices. However, Dell believes companies may have no choice but to invest in infrastructure despite these costs. He said, "It doesn't make sense for a knowledge worker earning $100,000 a year to use an outdated PC or an inefficient system."
Industry shift
Shift in strategy for memory manufacturers
The surge in demand for memory chips is also reshaping the industry. Micron, one of the three largest manufacturers of memory chips, announced late last year that it would be exiting the consumer memory business to focus on data center chips. This move highlights how companies are adapting their strategies in response to changing market dynamics and increasing demand for high-performance computing resources.