Micron Technology (MU) shares plummeted 5.03% in Wednesday's intraday trading session, following comments from the company's CEO about inevitable increases in AI-related capital expenditures. The statement has raised concerns among investors about the potential impact on the chipmaker's profitability.

The sharp decline comes amidst a broader context of shifting dynamics in the memory chip industry. A recent report from Counterpoint Research suggests that Nvidia's move to smartphone-style LPDDR memory for AI servers could potentially double server-memory prices by late 2026. This shift is expected to create sudden demand that the industry may struggle to absorb, potentially benefiting memory chip manufacturers like Micron in the long term.

Despite the positive outlook for memory chip demand, investors appear to be focusing on the short-term implications of increased spending. The CEO's comments about "inevitable" spending increases for AI initiatives have triggered worries about near-term profit margins and cash flow. As the AI race heats up in the semiconductor industry, companies like Micron are under pressure to invest heavily in research and development to stay competitive, which could strain financial resources in the short run.