Artificial intelligence is eating up the world’s supply of random access memory, or RAM — an essential piece of technology in most modern devices — and experts say it is causing unprecedented price increases.
The shortage is already impacting how St. John’s-based information technology company, Triware Technologies, does business.
Vice-president Chris Dillon said they resell and service IT — like computers, routers and even printers — to about 400 local companies.
Speaking to CBC on March 6, Dillon said he has seen “huge price fluctuations” in the technology market over the last two to three months.
A piece of RAM that cost them around $75 before Christmas, now costs them around $300, said Dillon.
And he said the price they quoted a client for new laptops three days prior had already increased 40 per cent.
“Price fluctuations are off the charts. It’s without warning for the most part,” said Dillon.
What’s RAM, anyway?
RAM is a computer’s “working memory,” said Memorial University computer science associate professor Dave Churchill.
“If you think of a computer as like a desk … then RAM would sort of be how big the top of the desk is. It’s how many things you can do at the same time,” said Churchill.
Willy Shih, a professor of management practice at Harvard Business School, said the AI boom is soaking up the world’s RAM supply. (CBC)
And Churchill said it’s not just in laptops and iPads.
“If you have a fancy enough microwave, I’m sure it has RAM in it somewhere.” he said.“Pretty much anything electronic these days has some amount of RAM in it.”
With AI demand soaring, companies like OpenAI, Meta and Google have been scrambling to build data centres that require massive amounts of high-performing RAM.
Willy Shih, a professor of management practice at Harvard Business School, said the “AI boom” is soaking up RAM supply because data centres require significantly more RAM than a conventional laptop or desktop computer.
WATCH | N.L. companies say they’re paying more for tech because of the global AI boom:
A memory chip shortage caused by AI is having impacts on N.L. companies
Artificial intelligence is eating up the world’s supply of RAM — a fundamental component of most modern electronics — and even companies in N.L. are feeling the impact.
And because the world’s three major RAM manufacturers — Samsung, SK Hynix and Micron Technology — have allocated production to supplying these data centres, there is a shortage in the global market.
“What we’ve seen are really unprecedented price increases for the memory that goes into your notebook computer or your office computer or your phone or your tablet,” said Shih. “Supply isn’t keeping up with demand.”
‘This is impacting everything’
Navigating these price increases has been stressful for Triware Technologies, as it’s impacting almost every business, said Dillon.
Triware Technologies vice-president Chris Dillon says since the AI boom, price fluctuations for tech have been off the charts. (Danny Arsenault/CBC)
“We’re dealing with companies regularly that are planning projects, refreshes, network upgrades, and this is impacting everything from budgets to lead time and to project co-ordination,” he said.
And it’s changing how they do business with clients, said Dillon.
“We’re talking to clients about maybe even adding contingencies to their budget and their project planning just in case,” he said, adding they’re also coming up with financing options.
Gamers also spending more
The shortage will also have a direct impact on how N.L. and P.E.I.-based indie game developer Other Ocean runs its business.
“We need these machines with a large amount of RAM … to develop the games,” said product director Ryan Hale, adding they’ll also have to pay more to third party online servers that host their multiplayer games.
It will also impact their customers — who may not be able to afford or even access the computers or gaming consoles they need to play the games.
“[It] affects everyone … in the gaming industry and gamers around the world,” said Hale. “No one wants to spend more for their entertainment.”
Other Ocean product director Ryan Hale says the RAM shortage will affect the gaming industry and gamers around the world. (Ken Linton/CBC)
Investors are already worried that major video game makers — like Sony’s PlayStation, Microsoft’s Xbox or the Nintendo Switch — will push release dates or increase prices on new consoles.
The gaming company Valve wrote in a February blog post that it has not been able to announce the launch date and pricing for its new Steam Machine gaming computer, due to the “the memory and storage shortages.”
“So for us it means [potentially] less customers overall,” said Hale.
As a result, Hale said developers now have to consider making games that don’t need top of the line computers or consoles to run in order to keep a wide customer base.
“Maybe you can’t have as many sparks or the really cool fire, the really cool water that you want in your game because it takes a higher end machine to run,” he said.
Shih agrees with Dillon.
“If people end up buying computers that have less memory in them, then game performance is not going to be as good,” he said.
But luckily, Shih said the problem is likely only temporary and will probably correct itself, because RAM manufacturers are already rushing to build new factories.
“If this AI boom doesn’t slow down … we’re going to have memory chips coming out of our ears.”
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