Zoho’s Sridhar Vembu Flags 500% Memory Price Surge, Warns of Business Crisis

Zoho founder and CEO Sridhar Vembu has flagged a critical problem for tech companies: memory prices have soared 500% in the past 12 months, driven by AI data centre demand. A 128GB DDR5 kit now costs $3,399, roughly 10 times its lowest recorded price of $329. Vembu said Zoho has held prices steady to protect customers, but absorbing these costs is becoming unsustainable. The surge threatens to force software and hardware makers to pass expenses to end users.

Memory costs have exploded as AI demand surges

Computer memory prices have climbed sharply since August 2025. A 64GB DDR5-5600 kit that averaged $191 one year ago now costs $1,118, a 485% increase. A 2x32GB DDR5-5600 kit jumped from $191 to $1,118. Even DDR4 memory has become expensive, with prices rising 120% to 177% across tracked kits. The spike stems from AI data centres absorbing massive amounts of DRAM supply as companies build infrastructure for large language models and other AI workloads.

Zoho and other tech firms face margin squeeze

Vembu wrote on X that “Memory prices, along with AI token prices, have made business very difficult.” Zoho has held back from raising prices to shield customers, but the strategy is becoming harder to sustain. Phone makers including Oppo, OnePlus, Vivo, and Nothing have already raised prices in recent months. The pressure extends across the entire tech supply chain, from hardware manufacturers to software vendors.

Programming must evolve as memory becomes expensive

Vembu argues that the era of treating memory as “free” has ended. For decades, programming languages and compilers were designed assuming memory was abundant and cheap. Vembu called for highly memory-efficient languages and smarter compilers, even for AI systems. He believes software safety and developer productivity should not come at the cost of excessive memory use. This shift could reshape how engineers write code and build systems over the next decade.

Broader market distortions from the AI investment boom

Vembu linked the memory crisis to what he calls “the mother of all credit bubbles” unleashed after the pandemic. The AI investment boom has distorted markets for electric power generation, transformers, cooling systems, CPUs, and GPUs. He noted that while technology can be real and transformative, past bubbles like telecom in 1995-2000 led to widespread bankruptcies in 2001-03. The current cycle carries similar risks if demand cools or supply eventually catches up.

Final Thoughts

Memory price inflation is forcing tech companies to choose between absorbing costs or raising prices. Vembu’s warning signals that software and hardware makers may soon have no choice but to pass expenses to customers, reshaping the economics of the entire industry.

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