Surging AI demand could cause the world’s next chip shortage, research says

Indeed, a recent report shows that surging global demand for artificial intelligence technologies could trigger the next major chip shortage. This is due to AI’s heavy reliance on semiconductors, which form the backbone of several AI functions, from training machine learning algorithms to performing complex computations.

The chip industry is already under strain due to high demand from numerous sectors including automotive, entertainment, and technologies, and the AI boom could exacerbate this further. There are concerns that if the chip manufacturing industry cannot keep up with demand, it could hinder the growth of AI technologies.

All stakeholders globally are urged to make strategic plans, invest in capacity expansion, research and development to prevent potential shortages. Contingency plans like diversifying supply sources and encouraging domestic manufacturing are also essential.

If a shortage does occur, it could impact numerous industries that rely on AI technologies, including autonomous vehicles, healthcare, and more. It could also lead to an increase in prices for chip-dependent goods and services, affecting both businesses and consumers.

Last but not least, governments can play a crucial role as facilitators, being catalysts for investment and fostering a robust, supportive policy environment for semiconductor industry growth with a view to ensuring sufficient global electronics supply in the future.