From Bloomberg, March 25:
Shares of computer memory and storage makers slumped on concerns over demand after Google researchers touted a new compression technique. But it may be a hiccup rather than an existential threat.
SK Hynix Inc., a key maker of memory chips for artificial intelligence applications, fell as much as 6.4% on the Korea Exchange. Flash memory manufacturer Kioxia Holdings Corp. dropped by a similar measure in Tokyo. That followed losses by Micron Technology Inc. and Sandisk Corp. Wednesday in New York.
Alphabet Inc.’s Google said its new TurboQuant technology can limit the amount of memory required to run large language models by at least a factor of six, reducing the overall cost of training artificial intelligence. Memory forms a vital part of Nvidia Corp.’s accelerators and demand has surged during the AI boom.
The Google news spurred some caution that memory needs may be reduced. Bulls tracking the blistering rally in global memory shares say that improved efficiency will actually increase rather than reduce demand, however, pointing to a theory known as the Jevons Paradox.
The 19th century premise was cited in a note from the trading desk at JPMorgan Chase & Co. Its analysts said that investors may take profits on the news, but there’s no near-term threat to memory consumption.
TurboQuant is positive for hyperscalers given the return on investment opportunity, Morgan Stanley analyst Shawn Kim wrote in a note. It also may be beneficial for memory makers longer term he added, as “a lower cost per token can also lead to higher product adoption demand.”....
....MUCH MORE
Korea's KOSPI is down 181.75 (-3.22%) at 5,460.46.
As noted exiting from January 2025's "ASML CEO Says DeepSeek’s Emergence Is ‘Good News’ for AI":
Time was when even mentioning Jevons was anachronistic/borderline fuddy-duddy, e.g.
"Energy Efficiency Improvements Do Not Save Energy"
Hey, it's our old pal Jevons.And he's brought his paradox.
And going back to 2009 because Jevons, like myself, tried to figure out a way to make some money off of Herschel's sunspot observations but couldn't. (like myself). Backlinks in April 2020's "Sunspots and Agricultural Production (William Herschel does a driveby)": including his 1879 submission to the journal Nature.
