AI Hypetrain Might Just Kill GoPro as Chip Prices Soar and Bankruptcy Looms
While tech bros spend billions teaching chatbots how to write bad poetry, the physical world is running out of silicon. GoPro just admitted they might go bust because the AI bubble is eating up all their camera parts.
The action-camera pioneer is actively hunting for cash or a buyer to avoid total default after a brutal financial quarter. GoPro has already defaulted on some loan terms, secured a temporary hall pass from its lenders, and watched its stock price plummet by 14% overnight.
At the heart of this disaster is a massive supply-chain betrayal. Memory manufacturers are shamelessly ghosting consumer tech brands to build high-end server chips for AI data centers. Because of this artificial intelligence gold rush, memory prices for regular gadgets have skyrocketed by up to 115%. To make things worse, suppliers formally warned GoPro that chip deliveries are getting slashed, which completely trashes their production plans.
Meanwhile, Chinese rivals like DJI and Insta360 are eating what's left of their lunch. The launch of the new GoPro Mission 1 camera lineup did absolutely nothing to rescue the balance sheet. In a desperate bid to survive, management has already fired nearly a quarter of its global workforce this spring, which follows another massive 15% layoff round from last year.
Now, the company's board is desperately looking for any way out, even considering abandoning the consumer market entirely to pitch military and aerospace defense contracts.
It turns out that capturing extreme skateboard stunts is no match for the endless hunger of large language models. The ultimate irony of the AI revolution might be that before we get super-intelligent robots, we will first lose the ability to film ourselves doing stupid things in 4K.
Source: Bloomberg
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