Seagate Shares Drop 4% After Google’s TurboQuant AI Compression Announcement
Seagate Technology shares slid 4% after Google introduced TurboQuant, a 3-bit AI compression algorithm aimed at reducing memory requirements. Lynx Equity Strategies analyst KC Rajkumar argued that the technique won’t curb three-to-five-year DRAM and flash demand and maintained a buy rating on major memory stocks.
1. Stock Reaction
Seagate Technology shares fell 4% on Wednesday as memory stocks declined despite gains in the broader technology sector, reflecting investor concern over potential reduced memory needs.
2. Google's TurboQuant Algorithm
TurboQuant employs a 3-bit vector quantization method to compress AI model data, with claimed efficiency gains compared to legacy 32-bit architectures, though the improvement vs current 4-bit inference models is contested.
3. Analyst Perspective
Lynx Equity Strategies analyst KC Rajkumar noted that vector quantization is not new and disputed claims of an 8× improvement, emphasizing that existing 4-bit inference models already deliver significant compression.
4. Demand Outlook
Rajkumar argued that advanced compression will ease bottlenecks but will not eliminate DRAM or flash demand over the next three to five years due to supply constraints, underpinning a bullish long-term view.