The next AI battleground is memory

Welcome to The Prompt, your Monday dive into the world of AI that puts Asia front and center. From Big Tech’s power players to the region’s scrappy disruptors, we cover it all. Want full access to all our AI reporting? Subscribe to us here.

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Hello reader,

For much of the AI boom, the story has been about compute. Nvidia became the world’s most valuable company by supplying the GPUs that power today’s AI models.

But GPUs do not work alone. They rely on memory chips to move massive volumes of data fast enough to keep AI systems running at full speed.

That made what happened in Asia this past week particularly revealing.

CXMT, China’s leading memory-chip maker, surged 466% in its Shanghai debut on July 27, becoming the country’s most valuable listed company. Just two days later, South Korea’s stock market suffered a sharp chip-led selloff, with Samsung Electronics and SK Hynix falling despite the large profits AI memory has brought them. It has since rebounded, climbing 17% on Friday.

It’s not hard to see the connection. Samsung and SK Hynix dominate the market for the advanced memory chips that have become essential to modern AI. CXMT is not yet on par with the South Korean giants, but its blockbuster listing can give it a much larger pool of capital to expand its memory-chip ambitions.

The timing is also worth noting. Reports emerged that a Chinese state-backed company had begun producing key lithography equipment used to make these chips. What rattled investors was the possibility that China could close its gap with the US faster than expected.

For the past year, China’s AI progress has largely been judged by its models. From DeepSeek to Moonshot AI, Chinese companies have emerged as serious challengers, forcing a fresh debate over open vs. closed AI in the US.

But its advances in hardware may prove to be the bigger story in the months ahead.

That shift is also playing out in Southeast Asia. My colleague Glenn’s latest map of the region’s physical AI ecosystem shows that local startups are focusing less on frontier AI models and more on putting AI to work in the physical world.

Later in this edition, we speak with Zuzanna Stamirowska, co-founder and CEO of Palo Alto-based AI lab Pathway, about an alternative to today’s compute-heavy model architecture – one that also puts memory at its center.

Pranav Balakrishnan, AI reporter

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