‘Free memory’ era is over: Zoho founder warns of a new problem created by AI
&imwidth=600&imheight=450&format=webp&quality=medium "‘Free memory’ era is over: Zoho founder warns of a new problem created by AI")
Zoho founder Sridhar Vembu warns AI boom is making business harder as memory prices surge 500% Photograph: (X@svembu)
Zoho founder Sridhar Vembu says surging memory and AI costs are making business increasingly difficult. Some DDR5 memory products have risen sharply over the past year as AI data-centre demand tightens supply, prompting calls for more memory-efficient software.
The AI boom is creating an unexpected problem for technology companies: expensive memory. Zoho founder Sridhar Vembu says the situation has become difficult enough to affect how businesses operate, after some memory prices surged by as much as 500 per cent over the past year.
Vembu shared his concerns on X after citing a report on the sharp increase in memory costs. He said Zoho had avoided raising prices so far, but rising memory and AI token costs were making that increasingly difficult. The warning comes as AI companies continue spending billions on data centres, increasing demand for advanced memory used in servers.
Why are memory prices rising so fast?
The biggest pressure is coming from AI infrastructure. Modern AI systems need huge amounts of memory, both to train models and to serve responses to users. Demand for high-bandwidth memory and server-grade DRAM has encouraged chipmakers to prioritise higher-value products, tightening supplies for other parts of the market. TrendForce says AI server demand is continuing to support memory prices in the third quarter of 2026. Tom's Hardware recently reported some dramatic retail price increases. A 128GB DDR5-6400 kit, for example, was selling for about $3,399, compared with a previous low of $329. That does not mean every memory chip has risen by 500 per cent. The figure refers to particular memory products and price measurements, so it should not be treated as a universal increase.
Vembu says software may need to change
For Vembu, the problem goes beyond expensive computer hardware. He argues that software developers have historically designed programming languages with the assumption that memory was relatively cheap and plentiful.
That assumption is becoming harder to maintain.
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Vembu says programmers should focus more heavily on memory-efficient languages and smarter compilers, including software used by AI systems. His argument is that better security and developer productivity should not come at the cost of excessive memory use. In other words, the memory shortage could eventually influence not just what computers cost, but how software itself is designed.
The AI boom is squeezing the wider tech industry
The pressure is already being felt beyond software. AI companies are expanding data-centre capacity at a rapid pace, while smartphone and PC manufacturers are competing for many of the same semiconductor resources. TrendForce forecasts conventional DRAM contract prices to rise 13–18 per cent quarter-on-quarter in Q3 2026, while NAND Flash prices are expected to increase 10-15 per cent.
That creates a difficult trade-off for companies such as Zoho.
They can absorb higher infrastructure costs, raise prices for customers or redesign their software to use fewer resources.
For Vembu, the third option may become increasingly important. The AI revolution is therefore creating a strange new reality for the technology industry: the race to build smarter machines is also making one of the basic resources those machines need much more expensive.
