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SanDisk Stock Slides on Google AI Chip Threat
25 Mar
Summary
- Google's new TurboQuant algorithm may reduce AI system memory needs.
- SanDisk invested $1 billion in Nanya Technology for DRAM supply.
- SanDisk shares surged nearly 196% year-to-date before the decline.
SanDisk's stock dropped 5% on Wednesday, primarily due to Google's introduction of TurboQuant, a new compression algorithm designed to decrease memory requirements for artificial intelligence systems. This announcement coincided with SanDisk's subsidiary making a significant strategic equity investment of $1 billion in Nanya Technology Corporation.
This $1 billion outlay secured approximately 3.9% of Nanya's outstanding shares and established a multi-year supply agreement for DRAM products. However, the investment raised concerns among investors regarding capital deployment, particularly given SanDisk's stock had already experienced a substantial rally, increasing by nearly 196% year-to-date.
