Thoughts on memory: Anyone who thinks compute will stay in shortage while memory slides into oversupply must be smoking something. Compute and memory are destined to tighten together or deflate together. One cannot die while the other survives. By the same logic, the pods shorting memory and going long HDD are out of their minds. How do you think HDD isn't joined at the hip with memory? You really think HDD stays safe if this cycle rolls over? In the end, all of this comes down to nobody having conviction about what happens after 2027. Historically, we have watched P peak one to two quarters before supply ramps, then Q expands and the entire profit pool collapses. But everyone forgets that this cycle runs on nonstandard products, unlike PCs, smartphones, and general purpose servers, and that it was triggered by factors different from past cycles. This is because of the boomers who still see memory as an industry where you make a killing in the upcycle and lose your shirt in the downcycle. These self proclaimed veterans view memory through the lens of their past experience, and since they drive the market and set the stock prices, memory trades at such a low valuation. What I keep saying is that a sharp collapse like in the past is impossible. A gradual decline is possible. But even if Samsung and SK Hynix margins were cut in half from current levels, they would still trade at a P/E in the teens. That is still roughly half of HDD valuations. Personally, I think that as memory prices fall, other sources of demand will absorb the supply at each step down. In particular, I expect personal AI demand, led by local AI, to emerge. Looked at another way, for local AI to take off, the hyperscaler driven spike in memory prices has to be brought under control. At current memory prices, local AI can never diversify. Just as mainframes gave way to PCs and the cloud gave way to smartphones, each time carrying the cycle from P into a Q expansion phase, I think this AI cycle will also move from frontier labs to local open source AI. Based on these historical precedents, I believe local AI will take over the memory cycle from the frontier labs and carry memory demand. I am not saying memory prices will hold for more than a decade. Memory P will fall at some point. But what is different from the past is that new consumer devices and new consumer demand, such as open source driven local AI, will support the floor for memory. So the market right now keeps discounting these stocks out of fear of a memory peak nobody can time. This discount is being driven by boomer investors who dismiss the idea that AI supports the downside and keep pushing the view that earnings will collapse and the trough will revert to past levels too. My point is that this is completely wrong.

If AI agents spends more time waiting than generating answers, what should we actually be accelerating? And what does that mean for the next generation of AI chips? A look at where the time, memory and money go when agents get to work.