Micron leads the plunge, shedding $70bn in value as investors abandon bets on AI-driven chip scarcity. Shares of Sandisk, Western Digital, and Seagate tumbled, erasing over $15bn combined in a single week. The sell-off reflects newfound confidence in Google's TurboQuant algorithm, which promises to slash AI memory demands without sacrificing performance.

Analysts at Morgan Stanley argue efficiency gains could enable local hardware deployment, reducing reliance on cloud clusters. Critics counter that near-term demand remains robust, with Sony citing memory shortages as a reason for a 20% PlayStation 5 price hike. Despite volatility, tech giants like Nvidia and Microsoft face mounting pressure to justify AI capital expenditures amid shifting market dynamics.