AI Today: The AI build-out is in the price of your next laptop
The companies supplying AI data centres are having record quarters. Part of the bill is landing on people who never bought an AI chip.
On 3 November, AMD reported the best quarter in its history: $13.4 billion in revenue, with its data-centre business up 97% on a year earlier. Reuters reported that it expects revenue to grow by more than 80% next year.
AI Today is a series from Fíor, a natural language classifier that predicts whether a piece of text was more likely written by a person or by AI. Each piece explains one development in AI and shows where the claims come from.
Most of the arguments about AI spending this autumn have been about the companies building data centres, and whether they will earn their money back. We have looked at that from the side of stock investors and lenders. There is a simpler question that gets less attention: who else is paying in the meantime?
The winners are clear
The companies selling into the boom are doing very well. AMD's record quarter came from the chips and processors that fill AI data centres. Nvidia's results have told the same story for two years. The memory makers, led by Samsung, SK Hynix and Micron, are having some of the best years in their history.
The bull case says the buyers will do well too. The investor Bill Ackman told Business Insider that the market is underestimating how much revenue Microsoft, Meta and Amazon will eventually earn from their AI spending.
The bill travels
The cost does not stay inside the data centres. AI servers need a special kind of high-bandwidth memory, and the memory makers earn far more on it than on the ordinary memory that goes into phones and laptops. So they have been switching their factories over to it. That has left less ordinary memory for everyone else, and its price has climbed steeply.
Apple shows how that reaches people who never bought an AI chip. It does not build AI data centres on anything like the scale of its rivals. But it uses enormous amounts of memory in iPhones, Macs and iPads, and AP reported this week that rising memory costs are weighing on it. Apple has already raised prices on some Macs and iPads, citing those costs.
None of this means AI spending is wasted. It means the costs of the boom are spread wider than the headlines suggest. Investors and lenders can decide whether to take part. Someone buying a laptop this winter cannot opt out.
The debate about AI spending is usually framed as a bet the biggest companies are making with their own money. Some of it turns out to be a bet they are making with everyone's.
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