Shares in major memory chip companies fell sharply after Google revealed a new AI algorithm called TurboQuant. The technology could reduce how much memory is needed to run advanced AI systems.
TurboQuant was introduced by Google Research earlier this week. It is designed to compress the “working memory” used by AI models without reducing accuracy. The company said it can cut memory use by at least six times and improve speed.
The announcement caused concern among investors. Companies that make RAM and memory chips rely heavily on demand from AI systems, which currently use large amounts of memory.
Shares in Samsung Electronics and SK Hynix dropped by around 6%. In the United States, Micron Technology and Western Digital also saw declines.
Analysts say the sector may have already lost hundreds of millions of dollars in market value. Memory stocks had risen strongly this year due to high demand from AI, making the sudden drop more noticeable.
Experts say TurboQuant could reduce the need for high-bandwidth memory in data centres. Large tech firms like Microsoft and Amazon may need fewer chips if the technology is widely adopted.
Some analysts believe RAM prices could fall in the coming months. Lower demand for memory chips could change the current supply shortage and bring prices down.
However, others say demand for AI is still growing quickly. They argue that more AI models and larger workloads could continue to drive long-term demand for memory.
For now, the market reaction shows how a single software breakthrough can quickly affect the global hardware industry.
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