We need to talk about what's happening in the memory and AI markets, because it's starting to affect everyone who buys or builds computers—and honestly, anyone who buys modern electronics at all.
The Memory Market's Perfect Storm
Here's the situation: there are exactly three companies that make the memory chips in your computer, phone, and basically every electronic device you own. Samsung, SK Hynix, and Micron control nearly the entire global supply of DRAM and flash storage. Not "most of it"—essentially all of it.
In late 2024, Micron announced they're discontinuing their Crucial consumer memory brand. Their reasoning? They're shifting focus to "larger strategic customers in faster growing segments"—primarily AI and data center buyers. Samsung and SK Hynix appear to be making similar strategic shifts, prioritizing these massive corporate contracts over consumer markets.
The timing matters here. RAM prices have spiked dramatically—some kits have increased over 200% in just a few months between late 2024 and early 2025. SSD prices are beginning to follow the same trajectory. When you have only three suppliers and they all publicly announce they're deprioritizing consumer sales in their earnings reports (which competitors obviously read), the effect on pricing becomes predictable.
The memory industry has a documented history of price-fixing convictions. While overt collusion may not be happening now, these public strategic announcements in earnings calls serve a similar function—they signal market intentions to competitors without requiring any back-room coordination.
The Taxpayer Subsidy Problem
Here's where it gets particularly frustrating: Micron has received substantial government support, including CHIPS Act grants and significant state and local tax breaks totaling billions of dollars. This is taxpayer money—your money—given to help strengthen domestic semiconductor manufacturing.
The stated goal of these subsidies was to secure the supply chain and ensure American technological independence. But the practical effect is that we're funding companies that are then choosing to prioritize mega-corporate buyers and effectively exit consumer markets, leading directly to higher prices for the individuals whose taxes funded them in the first place.
It's a circular problem: taxpayers subsidize the company, the company uses that support to build infrastructure for corporate clients, consumer prices rise, and the same taxpayers who funded the subsidy now pay inflated prices for the products.
The AI Spending Spiral
The reason these memory manufacturers are pivoting so hard toward data centers becomes clearer when you look at AI infrastructure spending. OpenAI alone has committed to approximately $1.15 trillion in infrastructure spending over five years, including contracts with Nvidia ($100 billion), AMD ($90 billion), Broadcom ($350 billion), Oracle ($300 billion), Microsoft ($250 billion), Amazon ($38 billion), and CoreWeave ($22.4 billion).
To put this in perspective: OpenAI projected roughly $20 billion in revenue by the end of 2025. Meeting these obligations would require revenue growth of 85x in five years—they'd need to become the largest company on Earth.
The Circular Money Flow
What's particularly concerning is the interconnected nature of these deals. The pattern works like this:
- Microsoft invests in OpenAI, largely through Azure cloud credits
- OpenAI uses those credits to rent compute infrastructure from Microsoft
- Microsoft uses that revenue to justify ordering more GPUs from Nvidia
- Nvidia then invests in OpenAI
- The cycle continues
Similar circular arrangements exist throughout the AI infrastructure space. Companies invest in each other, then the invested capital flows back as revenue through service contracts. This makes it difficult to assess actual cash flow quality or real economic value creation—the money appears to move, but it's largely moving in circles among the same group of companies.
This structure bears some resemblance to past bubbles, though with important differences. Unlike the 2008 financial crisis, there's no complex securitization or exotic derivatives involved. Unlike the dot-com bubble, current tech companies are generally profitable with strong balance sheets and lower valuations (roughly 30x forward PE compared to 60x during the dot-com peak).
However, the risks remain significant: trillions in intercompany deals, questionable earnings quality, an economy that can't sustain low interest rates indefinitely, and valuations still dependent on massive future growth that may not materialize.
An MIT report found that 95% of companies adopting AI tools aren't yet seeing financial returns. Several major AI companies, including OpenAI, are currently losing billions annually. Others like Oracle are taking on substantial debt for AI development.
The Broader Economic Impact
Here's why this matters beyond tech enthusiasts: the seven largest AI-related tech companies are disproportionately propping up the entire U.S. stock market. According to available data, investments in AI infrastructure accounted for roughly 92% of U.S. GDP growth in 2025.
If this is a bubble—and several indicators suggest it might be—the economic consequences would extend far beyond Silicon Valley. When a small number of companies represent such a large portion of market value and economic growth, their decline creates systemic risk.
The Taxpayer Subsidy Cycle
Meanwhile, taxpayers are also covering other costs: state-granted tax exemptions for data centers (reducing local tax revenue), rising electricity bills as data centers consume increasing power, and potentially future bailouts if the bubble bursts.
Data centers do create some jobs, but many are temporary construction positions that don't offset potential job displacement from AI automation. The employment math doesn't favor ordinary workers.
What This Means for Hardware
The practical effect for anyone building or upgrading a PC is straightforward: computing hardware is becoming less accessible and more expensive for individuals. The shift toward prioritizing data center clients suggests this isn't a temporary price spike—it represents a strategic reorientation of the entire memory industry.
If current trends continue, we're likely looking at a sustained period of elevated prices for RAM, SSDs, and potentially other components. Memory is in everything now—phones, cars, appliances, graphics cards. This affects the entire consumer electronics market.
The broader implication appears to be a gradual shift of computing power away from personal ownership and toward centralized data centers accessed through subscription services. Whether by design or as a side effect, the result is that individual ownership of capable computing hardware becomes more expensive while "software as a service" models become more prevalent.
The Documentation Trail
The concerning part is that much of this is documented in public filings. Companies announce these strategic shifts in earnings reports. The government subsidies are matters of public record. The circular investment patterns are visible in SEC filings. The price increases are easily trackable through retailer data.
This isn't conspiracy—it's business strategy being executed openly, with the probable understanding that there's little consumers can do about it when only three companies control an essential market.
The question isn't really whether this is happening—the evidence is fairly clear. The question is whether the current AI infrastructure spending represents genuine economic value creation that will justify these investments, or whether we're watching a bubble inflate with taxpayer assistance while consumer prices rise and market concentration increases.
Given the historical pattern of bubbles—where large investors with inside information often exit before the collapse, leaving others holding devalued assets—and given the extent of circular dealing and the gap between spending and revenue, caution seems warranted.
For now, if you're planning hardware purchases, the pricing trends suggest this is a particularly difficult time to buy. How long that remains true depends partly on whether AI revenues eventually justify the current infrastructure spending—and partly on whether these three memory manufacturers see any competitive or regulatory pressure to maintain consumer market participation.
The structure they've created is remarkably efficient for them: government subsidies reduce their costs, corporate clients provide large guaranteed contracts, and reduced consumer competition allows pricing power in whatever consumer market remains. From a business perspective, it's rational. From a consumer and taxpayer perspective, it's considerably less appealing.