Google Just Broke AI's Biggest Bottleneck, and the Street is Watching

Earlier this week, Google Research dropped an algorithm called TurboQuant.

By Wednesday, Micron had shed roughly $40 billion in market cap.

Sandisk and Seagate cratered. The internet started calling TurboQuant "Pied Piper," after the fictional compression startup from HBO's Silicon Valley. Cloudflare's CEO called it Google's DeepSeek moment.

MU dropped from around $449 to $350 in less than a week. A 22% peak-to-trough move. Then it caught a bid this morning.

But here's the thing.

Everybody focused on who gets hurt. Almost nobody asked the better question: what happens when AI gets 6x cheaper to run?

THE INSIDER EDGE

CHEAPER AI MEANS MORE AI

Quick version for the non-engineers.

When an AI model generates text, it stores a running memory of the conversation called the KV cache. The longer the conversation, the bigger the cache, the more GPU memory it eats.

For a large model serving 512 users at once, that cache alone can consume 512 GB of memory. Four times more than the model itself.

TurboQuant compresses that cache to 3 bits per value, down from 16. Zero accuracy loss. Up to 8x speedup on NVIDIA H100s. No retraining required.

That's why memory stocks got hammered. If AI needs 6x less working memory, maybe the market doesn't need as much HBM as everyone assumed.

Clean logic. But incomplete.

We've seen this movie before.

DeepSeek did the same thing in early 2025. Cheaper training triggered a selloff in compute stocks. Then the market realized cheaper AI just meant more AI, and infrastructure spending didn't shrink. It accelerated.

This week alone: Meta announced a 1-gigawatt data center expansion in El Paso. Microsoft's building a 900-megawatt AI campus in Abilene through Crusoe.

TurboQuant doesn't change that buildout. It might actually accelerate it.

So while everyone was selling Micron this week, we were following the physical supply chain downstream. Because if you trace "more AI" to its logical conclusion, you don't end up at memory chips. You end up at a choke point almost nobody is watching.

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THE BLUEPRINT

$USAR — USA RARE EARTH

The physical supply chain nobody's watching

What they do: USAR is building a vertically integrated rare earth magnet supply chain across the U.S., UK, and Europe. They mine at Round Top in west Texas (15 of 17 rare earth elements), process through Less Common Metals in the UK, and manufacture finished permanent magnets in Stillwater, Oklahoma. Mine to magnet, outside China.

Market Cap: ~$3.3B  |  Price: $15.15  |  52W: $5.56 – $43.98

Why now: Three things landed in March.

March 5: closed a $73M acquisition of the Round Top deposit.

March 23: signed a distribution deal with Arnold Magnetic.

March 26, yesterday: commissioned Phase 1a of commercial magnet production at Stillwater. Customer orders begin Q2.

The U.S. government holds a 10% equity stake. And under 10 U.S.C. §4872, the Pentagon is banned from using Chinese-origin rare earth magnets in weapons systems effective 2027. That deadline is 9 months away.

8 out of 10 on the Risk Meter. We'd look to build in the $13.50–$15.50 range with a hard stop at $11.00. Discipline first.

THE WATCHLIST

$MP  |  $52.37  |  ~$9.3B  |  ▲ LONG
Mountain Pass, California. Only active rare earth mine in the Americas. Revenue-generating, Pentagon-backed. Lower risk, lower upside.

$GOOGL  |  $274.21  |  ▲ LONG
They built TurboQuant. If deployed across search, YouTube, and Gemini, it could shave billions off compute costs. Down 2.4% today on broader weakness, not fundamentals.

$MU  |  $358.40  |  Contrarian ▲
TurboQuant only compresses inference memory, not training. HBM demand for training is still massive. Wells Fargo flagged the selloff as disproportionate. The dip from $449 to $350 could be a gift if you're patient.

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THE BOTTOM LINE

TurboQuant is real. The compression is real. The memory selloff was real.

But the conclusion Wall Street drew this week, that AI needs less stuff, is exactly backwards.

Cheaper AI has never meant less AI, it has always meant more.

The first-order trade was selling MU on Tuesday, the second-order trade is the one we just showed you.

Stay locked in, but also enjoy your weekend.

— The Lead Editor, Main Street Betz

DISCLAIMER

We are a bunch of apes who figured out how to use a Bloomberg Terminal and a group chat at the same time. That combination is either genius or a liability, and we honestly aren't sure which one yet.

Nothing here is financial advice. Seriously. Do your own research. Talk to an actual licensed professional before you YOLO your savings into something you read in a newsletter written by an ape in a hoodie.

Past performance doesn't guarantee future results. The market doesn't care about your feelings, your conviction, or your "diamond hands." It will humble you. It humbles us too. That's the game.

We may hold positions in securities mentioned. Trading and investing is risky. Trade at your own risk. Eat Cookiez responsibly.