The paper clip downside all the time appeared too absurd to me. Often known as the paper clip maximizer, that is the thought experiment by thinker Nick Bostrom that imagines how a superintelligent AI with the purpose of maximizing paper clip manufacturing might find yourself destroying the world by directing all out there assets to creating paper clips.
Whereas it could be irresponsible to say that is taking place, we’re beginning to run low on some assets. And it’s about to have an effect on your life.
You could have heard concerning the international reminiscence scarcity brought about, partially, by the fast buildout of AI information facilities. Simply as they want semiconductors for information processing and water for cooling, these amenities want reminiscence, or RAM, for short- and long-term information storage. Just about all shopper electronics, from desktop computer systems to smartphones, additionally require reminiscence to run. The issue is that simply three firms — Micron, SK Hynix, and Samsung Electronics — make nearly the entire reminiscence available on the market. They will’t make it quick sufficient proper now, and it’s unclear after they’ll be capable to meet up with demand.
Usually the scarcity of a pc part wouldn’t lead me to reference a thought experiment concerning the apocalypse, however right here we’re. Reminiscence is a very essential part, and because the AI information middle increase sucks up an increasing number of assets, not having sufficient of it signifies that just about each gadget with a chip in it should both get costlier or much less progressive or each. You may consider it alongside the identical traces because the dreaded mixture of inflation and stagnation made well-known by the Seventies and resurrected by the second Trump administration: stagflation. Issues value extra, they usually’re mainly worse.
Costs are already going up, and producers are already pointing to the reminiscence scarcity to elucidate them. What you possibly can anticipate within the months, and probably years, to return is a slowdown in the kind of specification bumps you’re used to seeing in new fashions. (This yr’s iPhone Professional 17, for instance, has 12GB of RAM versus the 8GB within the iPhone 16 Professional.) You would possibly even see producers selecting cheaper choices for elements like shows or batteries, in ways in which might not be instantly apparent.
“They’re in search of anyplace to chop corners simply throughout this timeframe to offset reminiscence prices,” mentioned Ryan Reith, a bunch vice chairman on the market intelligence agency IDC. He added that some firms simply gained’t construct the higher-powered units they’d deliberate to construct within the close to future. IDC, in the meantime, predicts smartphone gross sales will go down in 2026 as a result of reminiscence scarcity.
There may be additionally hoarding. There’s a veritable alphabet soup of several types of storage, however one that’s important to AI is named DRAM. You could find DRAM in devices large and small — laptops, gaming consoles, TVs, automobiles — and because the large three reminiscence makers direct extra of that provide to AI information facilities, much less is offered to gadget makers. So some firms are stockpiling the reminiscence, which has the difficult impact of each driving up costs and decreasing provide.
The opposite acronym to know right here is HBM, which stands for high-bandwidth reminiscence. It is a sort of DRAM that’s particularly designed to work with the high-performance processors, like Nvidia’s Blackwell chips, which are filling out AI information facilities. The revenue margins on any such reminiscence is roughly double that of the form of DRAM that goes into shopper devices, so naturally reminiscence makers are devoting additional assets to creating it, contributing to the backlog of consumer-grade reminiscence.
This case goes to take some time to resolve. As a way to construct extra reminiscence chips, reminiscence makers have to construct extra factories, referred to as fabs, and that course of takes years. Micron, for instance, will quickly begin building on a fab in upstate New York that gained’t begin producing reminiscence till 2030. The corporate’s enterprise chief Sumit Sadana informed CNBC final week, “We’re offered out for 2026.”
None of which means, when you go to the smartphone retailer in six months, you’re not going to have the ability to purchase one — or that will probably be twice as costly. Quite the opposite, gadget producers wish to keep away from sticker shock. What you’ll in all probability see, nevertheless, is that the value of the bottom mannequin stays the identical, however the elements within it aren’t pretty much as good as they’d have been. If you’d like the model with extra reminiscence, you’ll pay an excellent greater premium for these specs than you’d have final yr.
“It’s not over but when it comes to costs going up,” mentioned Reith.
We don’t but understand how this ends. On one hand, the information middle increase that’s gobbling up all of the reminiscence may be very a lot tied to the AI trade, which could or could not be a bubble about to pop. On the opposite, the pattern of rising costs spans all industries. Whereas the speed of inflation has held regular, issues value greater than they did a yr in the past, they usually’re not getting any cheaper. If smartphone makers or laptop computer producers understand they’ll promote a worse product on the identical value as the higher one, they may wish to try this, no matter any shortages.
Once we discuss concerning the affordability disaster, we’re not precisely speaking about an expensiveness disaster. Reasonably priced means affordable. It doesn’t really feel affordable that the common shopper will get saddled with crappier merchandise because the AI trade creates billionaires at a document tempo. The world just isn’t ending any time quickly, however you’re in all probability beginning to really feel the results of the shift in a method or one other.
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