<p>Google sent shockwaves through a small corner of the artificial intelligence (AI) market when it released new research that could significantly impact certain chipmakers. The <strong>Alphabet</strong> <span class="ticker-mention inline-flex items-center font-bold">(GOOG <span class="ml-1 text-red-900">0.15%</span>)</span> <span class="ticker-mention inline-flex items-center font-bold">(GOOGL <span class="ml-1 text-red-900">0.57%</span>)</span> subsidiary shared the results of its TurboQuant algorithm, which shrinks memory usage for large language model inference more than six-fold, the researchers said.</p>
<p>Memory chipmakers have seen demand surge over the past year as the amount of data that graphics processing units (GPUs) and other AI accelerators have immediate access to proves to be a significant bottleneck in improving generative AI responses. With Google's breakthrough, it might not be such a bottleneck after all. But investors' buying and selling behaviors may be misplaced after the news. One stock could end up being a surprising winner of Google's AI development.</p>
<div class="image"><img width="880" height="587" class="h-auto max-w-full rounded object-contain" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NjMzNTIvZ2V0dHlpbWFnZXMtY2hhdGJvdC1zbWFydHBob25lLXZvaWNlLmpwZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NjMzNTIvZ2V0dHlpbWFnZXMtY2hhdGJvdC1zbWFydHBob25lLXZvaWNlLmpwZyZ3PTM4NDA"/>
<p>Image source: Getty Images.</p>
</div>
<h2>Did memory chipmakers deserve a price cut?</h2>
<p>Shares of <strong>Micron</strong> <span class="ticker-mention inline-flex items-center font-bold">(MU <span class="ml-1 text-red-900">0.49%</span>)</span>, the leading U.S. memory chipmaker, and its Korean competitors <strong>SK Hynix</strong> and <strong>Samsung</strong>, all fell on the news of Google's TurboQuant. If AI chips can produce better results with less memory, the demand for memory won't grow nearly as quickly, the thinking goes.</p>
<p>But improving efficiency shouldn't cause such alarm. TurboQuant opens the door for more advanced models using larger context windows to further improve responses and user experiences. Overall, the net effect should be relatively neutral in the long run. We saw a similar response in the market when DeepSeek unveiled its reasoning model a year ago. In fact, <strong>Cloudflare</strong> CEO Matthew Prince called TurboQuant &#34;Google's DeepSeek.&#34;</p><div class="my-8 lg:hidden"><div id="foolcom_sidebar_top_container" class="pitch-container"></div></div>
<section><div class="flex flex-wrap place-content-between"><div class="flex w-full place-items-center lg:w-3/4"><div class="p-[8px] text-center" style="width: 95px"><small><div class="flex flex-col items-center gap-2">Expand</div></small></div><div class="py-4 pr-4"><img alt="Micron Technology Stock Quote" width="64" height="64" class="w-full flex-none object-contain" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL01VLnBuZyZ3PTEyOA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL01VLnBuZyZ3PTEyOA"/></div><div class="pr-[16px]"><h2>NASDAQ: MU</h2><div class="text-md leading-[1] font-medium text-gray-800">Micron Technology</div></div></div><div class="flex w-full place-items-center lg:w-1/4"><div class="h-full w-5/6 px-4 py-2.5 lg:text-right bg-red-200"><div class="mb-[2px] text-[10px] text-gray-800">Today's Change</div><div class="mb-6 text-[18px] leading-none font-medium text-red-900">(-0.49%) $-1.82</div><div class="mb-[2px] text-[10px] text-gray-800">Current Price</div><div class="text-gray-1100 text-[18px] leading-none font-medium">$366.03</div></div><div class="flex h-full w-1/6 items-center justify-center py-2.5 bg-red-900"></div></div></div><div class="flex flex-wrap overflow-hidden transition-all duration-300 h-0"><div class="w-full border-t border-gray-300 p-2 lg:w-3/4 lg:border-r lg:p-6"></div><div class="w-full p-2 lg:w-1/4 lg:p-4"><h3>Key Data Points</h3><div class="text-gray-1100 my-[14px] grid grid-cols-2 text-sm"><div class="border-b border-gray-300 py-[14px] text-gray-800">Market Cap</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$413B</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Day's Range</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$340.50 - $366.90</div><div class="border-b border-gray-300 py-[14px] text-gray-800">52wk Range</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$61.54 - $471.34</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Volume</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">2M</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Avg Vol</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">41M</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Gross Margin</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">58.54%</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Dividend Yield</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">0.14%</div></div></div></div></section>
<p>In other words, investors shouldn't fear the impact of TurboQuant on long-term demand for memory chips. Google isn't the only company working to solve this challenge, and it's unlikely it'll stop trying to optimize for memory usage going forward. That said, there are reasons to be wary of Micron stock at its current share price, even after the recent pullback. The cyclical nature of the memory chip market can lead to significant drops in earnings, and Google's release certainly won't help.</p><div class="mb-8 flex justify-center"></div>
<h2>The surprise winner from Google's AI advancement</h2>
<p>Improving the memory efficiency of AI algorithms won't have much impact on the most advanced frontier models driving artificial intelligence forward. However, it could have a noticeable impact on models used on consumer devices like smartphones and laptops, which are much more constrained by their hardware. As such, <strong>Apple</strong> <span class="ticker-mention inline-flex items-center font-bold">(AAPL <span class="ml-1 text-green-900">+0.11%</span>)</span> could be a surprise winner from Google's TurboQuant.</p><div><div id="in_line_article_pitch_container" class="pitch-container"></div></div>
<p>Apple has struggled to develop a large language model capable of handling significant tasks on the iPhone. The company values data privacy and security, so it wants to send as little user data as possible to a remote server. But that severely limits the AI capabilities it can include in the iPhone. That has resulted in multiple delays of the long-promised Siri update with new generative AI features.</p>
<section><div class="flex flex-wrap place-content-between"><div class="flex w-full place-items-center lg:w-3/4"><div class="p-[8px] text-center" style="width: 95px"><small><div class="flex flex-col items-center gap-2">Expand</div></small></div><div class="py-4 pr-4"><img alt="Apple Stock Quote" width="64" height="64" class="w-full flex-none object-contain" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FBUEwucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FBUEwucG5nJnc9MTI4"/></div><div class="pr-[16px]"><h2>NASDAQ: AAPL</h2><div class="text-md leading-[1] font-medium text-gray-800">Apple</div></div></div><div class="flex w-full place-items-center lg:w-1/4"><div class="h-full w-5/6 px-4 py-2.5 lg:text-right bg-green-200"><div class="mb-[2px] text-[10px] text-gray-800">Today's Change</div><div class="mb-6 text-[18px] leading-none font-medium text-green-900">(0.11%) $0.29</div><div class="mb-[2px] text-[10px] text-gray-800">Current Price</div><div class="text-gray-1100 text-[18px] leading-none font-medium">$255.92</div></div><div class="flex h-full w-1/6 items-center justify-center py-2.5 bg-green-900"></div></div></div><div class="flex flex-wrap overflow-hidden transition-all duration-300 h-0"><div class="w-full border-t border-gray-300 p-2 lg:w-3/4 lg:border-r lg:p-6"></div><div class="w-full p-2 lg:w-1/4 lg:p-4"><h3>Key Data Points</h3><div class="text-gray-1100 my-[14px] grid grid-cols-2 text-sm"><div class="border-b border-gray-300 py-[14px] text-gray-800">Market Cap</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$3.8T</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Day's Range</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$250.65 - $256.13</div><div class="border-b border-gray-300 py-[14px] text-gray-800">52wk Range</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$169.21 - $288.62</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Volume</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">1.1M</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Avg Vol</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">48M</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Gross Margin</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">47.33%</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Dividend Yield</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">0.41%</div></div></div></div></section>
<p>But the TurboQuant breakthrough could enable much more on-device AI processing, as memory has been a major bottleneck for Apple's devices. It's the reason older iPhone models haven't received basic Apple Intelligence features like AI-generated emojis in iMessage.</p>
<p>Google could be the key to unlocking generative AI features for the iPhone. Apple has already announced a partnership with Google to use its Gemini frontier model for an updated Siri. It'll likely be able to get much more out of it by integrating Google's memory optimizations on its devices.</p>
<p>That could spur a massive upgrade cycle for the iPhone. Nearly 1 billion iPhones in use at the end of 2025 are incapable of running Apple Intelligence, according to CLSA analysts. If new Siri features convince even a fraction of those users to upgrade earlier than normal, Apple could see a huge surge in iPhone sales this fall. Continued AI improvements driven by efficiencies unlocked by Google could drive more upgrades throughout 2027.</p>
<p>Investors already have high expectations for Apple this year, with the stock trading for nearly 30 times forward earnings expectations. But more advanced AI capabilities on its devices could lead to significant upside for the stock.</p><div id="article_pitch_container" class="pitch-container"></div><div id="promobox_container" class="pitch-container"></div>

Google’s latest TurboQuant reduces large model KV cache to around 3-bit, enabling about 6× memory savings along with performance gains, directly weakening AI inference’s reliance on high-capacity storage. For leading companies in the storage sector (such as HDD, flash memory, and cloud storage providers), this could bring pricing pressure or margin compression.Do you think Google’s new technology will truly impact the investment value of the storage sector? Is it a short-term fluctuation or a long-term structural shift? Feel free to share your thoughts!

<p>Google’s latest TurboQuant reduces large model KV cache to around 3-bit, enabling about 6× memory savings along with performance gains, directly weakening AI inference’s reliance on high-capacity storage. For leading companies in the storage sector (such as HDD, flash memory, and cloud storage providers), this could bring pricing pressure or margin compression.</p><p>Do you think Google’s new technology will truly impact the investment value of the storage sector? Is it a short-term fluctuation or a long-term structural shift? Feel free to share your thoughts!</p>

Google’s new technology is coming—will the storage sector cool down?

GOOGL

GOOG

<p>Google's new TurboQuant algorithm significantly reduces memory usage for AI models, impacting memory chipmakers like Micron, SK Hynix, and Samsung, whose stocks fell post-announcement. However, the long-term demand for memory chips may remain stable. Conversely, Apple could benefit from this development, as it may enhance on-device AI processing for iPhones, potentially leading to a surge in iPhone sales. Investors are optimistic about Apple's future, with expectations of advanced AI capabilities driving stock growth.</p>

- Google's release of the TurboQuant algorithm has the potential to significantly reduce memory usage for large language models, impacting memory chipmakers like Micron and its competitors.  
- Although some investors reacted negatively by selling memory chip stocks, the overall long-term effect on memory demand is expected to be neutral as TurboQuant could enable advanced AI models on consumer devices.  
- Apple's partnership with Google and the integration of TurboQuant may enhance on-device AI processing, potentially leading to a surge in iPhone sales as the company improves Siri's functionalities.

Google's Newest AI Development Could Produce a Surprising Winner