Dell CEO warns AI memory demand may jump 625x by 2028, prices could surge for years

The memory shortage is real. Companies are facing higher prices for RAM due to high demand from AI datacentres. Now, Dell CEO Michael Dell has claimed that we may be reaching a point where buyers may be forced to buy at whatever price demanded by the manufacturers.

In Short

• Dell CEO says AI memory demand to increase by 625 times
• He says companies will still pay high prices
• Michael Dell claims it will take years to expand supply

The past few months have witnessed a major surge in demand for memory chips, fueled by AI data centres. RAM prices have increased steadily over the past few weeks, and many electronic devices now cost more. But according to Dell CEO Michael Dell, the worst may still be yet to come. He believes that we may reach a point where companies are forced to pay whatever price demanded by manufacturers for memory chips.

Speaking at a recent Bank of America event, Michael estimated that total memory demand in AI infrastructure could reach unprecedented levels by 2028. He said, as quoted by ET News, “As memory per accelerator and system scale expand simultaneously in AI infrastructure, a structure is forming where total memory demand increases by approximately 625 times.”

However, the memory supply capacity may not be able to cope with this increased demand. Dell added, “While it takes years to expand memory supply, current demand for AI infrastructure is not slowing down.”

625x increase in demand for memory chips

Michael Dell explained the logic behind the 625 times increase. He claimed that the memory per AI accelerator is expected to expand from 80GB in 2022 with Nvidia's H100 to around 2TB by 2028, a 25-fold increase.

At the same time, the number of deployed accelerators is also projected to grow by a factor of 25. Multiply both numbers together, and we get 625.

This combined growth drives a substantial increase in demand for DRAM and related memory technologies. Apart from memory chips, GPUs are also in huge demand, particularly from the likes of Nvidia, that can provide high computing power needed for AI data centres.

Companies may still pay more for memory chips

The increase in RAM prices will make things more expensive, potentially putting off consumers from buying new products. But according to the Dell chief, companies may not have a choice. He explained, “It doesn't make sense for a knowledge worker earning $100,000 a year to use an outdated PC or an inefficient system.”

Michael Dell claimed that a company would be willing to pay higher prices just to ensure that its staff can have the best available resources. He added, “When you consider productivity, enterprises have no choice but to invest in infrastructure.”

The Dell CEO added, “The question is not 'whether to buy' but 'when to buy.'"

The impact of this increased demand is changing the memory industry too. Micron, one of the three major memory chip manufacturers, announced late last year that it was exiting the consumer memory business to focus on chips for data centres.

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