Google Deepmind CEO says the memory shortage is creating an AI 'choke point'
Business Insider
February 20, 2026
AI-Generated Deep Dive Summary
Google DeepMind CEO Demis Hassabis has highlighted a critical bottleneck in the AI industry: the global memory chip shortage. This shortage, which spans the entire supply chain, is causing significant challenges for companies like Google, Meta, OpenAI, and others. Despite Google’s ability to produce its own Tensor Processing Units (TPUs) for internal use and leasing them externally, Hassabis emphasized that key components—namely memory chips—are still constrained by a small number of dominant suppliers: Samsung, Micron, and SK Hynix. This dependency creates a choke point in the industry, as these companies struggle to meet skyrocketing demand from AI hyperscalers while maintaining their traditional electronics customers.
The issue is particularly acute for AI companies, which require high-bandwidth memory (HBM) chips for large language models. These specialized chips are in high demand but limited supply, leading to increased costs and delays in product deployment. Hassabis noted that this shortage not only impacts production but also hinders research and innovation. To experiment with new ideas at scale, AI researchers need access to large quantities of memory chips—a resource that is increasingly scarce and contested among major tech companies.
The financial stakes are high, as companies like Google continue to invest heavily in AI infrastructure. The company has projected capital expenditures of $175 billion to $185 billion by 2026, underscoring the importance of addressing this bottleneck. While Google’s ownership of TPUs provides some insulation, Hassabis acknowledged that the memory chip shortage remains a critical constraint across the industry.
This situation highlights the broader implications for businesses and consumers alike. The demand for advanced AI capabilities is driving up costs and creating competition for resources, potentially leading to price increases in consumer electronics. As AI continues to evolve, the reliance on specialized hardware like HBM chips will only intensify, making supply chain resilience a key concern for tech companies worldwide.
In summary, the memory chip shortage is not just a technical challenge but a critical business issue with far-reaching consequences. It underscores the need for greater supply chain diversification and innovation in chip production to meet the growing demands of AI development. For businesses, understanding this bottleneck is crucial as it directly impacts product availability, costs, and
Verticals
businessfinance
Originally published on Business Insider on 2/20/2026