Memory Crunch Forces Nvidia to Raise Server Prices, Boosting Samsung and SK hynix
Nvidia, the dominant force in the artificial intelligence chip market, is expanding beyond hardware into software while passing soaring memory chip costs on to customers through higher prices. The company is seeking to strengthen its own AI model capabilities amid growing competition from Chinese AI
Nvidia, the leading supplier of artificial intelligence chips, is responding to a memory chip shortage by raising prices for its server systems, a move that benefits competitors Samsung and SK hynix. The company is investing heavily in AI development, including a $6 billion licensing agreement with AI startup Poolside to create open-weight AI models.
Nvidia plans to allocate $1 billion to Poolside and hire approximately 100 engineers from the startup to bolster its own AI capabilities. This strategy aims to counter growing competition from Chinese AI models like DeepSeek and Kimi, as well as U.S. tech giants like Amazon, Microsoft, and Google, which are concurrently building their own AI chips.
According to The Wall Street Journal and Bloomberg, Nvidia has informed major customers that it may increase prices for upcoming AI server systems by over 15%, due to soaring costs from the memory shortage driven by demand for AI data centers. Samsung Electronics and SK hynix have significantly benefited from the memory chip market's growth, gaining more control over the industry.
Samsung Electronics emerged as the global leader in DRAM market share in the second quarter, holding 39%. As more companies invest in AI infrastructure, the demand for memory continues to surge, making memory suppliers increasingly powerful in negotiations. Nvidia's decision to raise server prices highlights the growing significance of memory components in the AI ecosystem and the profitability of memory suppliers.
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