Source : INDIA TODAY NEWS
The rising cost of smartphones and laptops may have an unexpected connection to the AI boom, according to Zoho founder Sridhar Vembu. In a series of posts on X, Vembu argued that the massive spending on AI infrastructure is putting pressure on several parts of the technology supply chain, including memory, CPUs, GPUs, power equipment and cooling systems. While he remains confident that AI will eventually deliver on its promise, he warned that the investment frenzy around the technology could end badly.
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“The sticker shock seen by anyone trying to upgrade their smart phone or laptop in 2026?” Vembu wrote. “That is the AI investment boom.”
He said the current AI expansion has been fuelled by a huge increase in credit following the pandemic, creating distortions across technology markets. The effects are being felt beyond AI chips, with demand also affecting electricity generation, transformers, backup generators, cooling equipment and memory.
Vembu, however, made a distinction between the technology itself and the financial boom surrounding it. He believes AI can become a widely used technology even if the current investment cycle eventually collapses. To explain his point, he compared today’s AI boom with the telecom investment bubble of the late 1990s. High-speed fibre connectivity eventually became a normal part of modern life, but that did not save many telecom equipment companies when the bubble burst in the early 2000s.
“It is important to keep in mind that the technology can be real and become ubiquitous,” he said, adding that the AI credit boom could meet a similar fate.
Vembu is basically not saying that AI is a failure. Instead, he believes companies and investors need to separate the long-term potential of the technology from the short-term frenzy surrounding it.
“The AI credit boom will meet the same fate, and I actually do believe the technology will achieve its full potential,” he wrote.
Memory costs are becoming a problem
The Zoho founder also highlighted another immediate problem for technology companies: the soaring cost of memory.
“Memory prices up 500% in 12 months and 10x the lowest level,” Vembu said in another post.
He said rising memory costs, combined with AI token costs, have made running businesses more difficult. Zoho has so far avoided increasing prices, but Vembu suggested that continuing to absorb those costs is becoming increasingly difficult. The price surge is also forcing him to rethink a basic assumption behind software development. For years, programming languages and software systems were designed around the idea that memory was relatively cheap and plentiful.
“That era has now ended,” Vembu said.
He argued that developers will need to focus more heavily on memory-efficient programming languages and smarter compilers, including when building AI systems. In his view, improvements in coding productivity should not result in software that consumes excessive amounts of memory.
Vembu has questioned AI’s productivity claims before
Vembu’s latest comments are consistent with his earlier criticism of the AI boom. In recent months, he has questioned whether companies are seeing the huge productivity gains that have been used to justify massive AI investments. He has also criticised companies for attributing layoffs to AI when the underlying reasons may instead include rising costs and broader economic pressure.
In May, Vembu argued that blaming AI for job cuts can make companies appear more technologically advanced while masking financial pressures. His criticism comes as some prominent technology leaders have also become more cautious about predictions of AI replacing workers at a rapid pace. OpenAI CEO Sam Altman, for instance, recently acknowledged that some of his earlier expectations about AI-driven job losses had not materialised as quickly as he expected.
His advice is to remain optimistic about the AI technology without getting carried away by the investment frenzy around it.
“Staying positive on the tech while being careful to not lose one’s shirt in the bubble unleashed by boosters of the same tech – that is the careful balancing act needed today,” Vembu said.
– Ends
SOURCE :- TIMES OF INDIA
