Marketplace · Wednesday, July 15, 2026
Companies are reallocating significant capital towards AI, leading to reduced spending on software and an increased demand for chips. Peter Cohen, a management practice professor at Babson College, notes that while the payoff of AI investment is uncertain, the trend is continuing. Michael Smith, a professor at Carnegie Mellon University, highlights that this surge in demand for chips is driving up prices.
“And since they're spending so much money on that, they are finding themselves not spending so much money on software, that's sort of going by the wayside.”
“So capital is finite, but so is the stuff that these AI investors are investing in.”
“And so the prices of chips are going up faster.”