Moore's law is stalling so cloud chips are being customized for AI problems and memory intensive data crunching

An important challenge is brewing for traditional chip makers: the cloud, or Internet-based computing. Driven by the need to analyze massive amounts of data, the Goliaths of the Internet— Alphabet (aka Google), Facebook, Amazon.com, and Microsoft—are altering the very nature of computing. In the process, they are pressing at the boundaries of chip technology and forcing a major change.

* faster and smarter memory chips are needed
* 100 to 1000 times performance gains from custom hardware chips to solve particular algorithms
* current approaches to advanced AI are memory intensive

One major beneficiary could be Micron Technology. Its memory chips could play a key role in cloud chips, which will rely less on processing power than on vast amounts of memory

Once the domain of videogames and scientific computing, GPUs excel at crunching clusters of data simultaneously. Alphabet and the rest are buying them like they’re going out of style. As a result, shares of the primary supplier of GPUs, Nvidia, are up 50% in the past 12 months, although shares of another supplier, Advanced Micro Devices (AMD), have fallen sharply due to company-specific problems. If demand plays out as we foresee, it could lift the fortunes of both. They might even become takeout targets of companies such as Qualcomm and Broadcom, or the cloud giants.

Artificial intelligence is cracking language translation and advanced image recognition problems by cranking through millions of samples and determining patterns.

A Chip Remembers. One of many cutting-edge chips, Micron’s prototype “Automata” is striking for its rigid symmetry. Unlike most computer chips, its circuitry is made up of vast fields of memory, with lots of wires to connect them, and just a little bit of logic circuitry squeezed in between.

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