Micron believes that AI will shape its destiny -- and is putting its money where its mouth is.
At Micron's (MU) - Get Report inaugural Insight conference in San Francisco, the Micron executives, as well as executives from Amazon (AMZN) - Get Report , Microsoft (MSFT) - Get Report and elsewhere, explained artificial intelligence as the central trend driving an explosion in memory and storage needs, and announced a $100 million fund for venture investments in the areas of AI and machine learning.
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"Over the course of the last several years, the technology has advanced such that hardware is becoming the essential disruptor," said Micron's CEO Sanjay Mehrotra. "This is what we mean by intelligence accelerated: the data center, devices at the edge, and AI and algorithms creating new worlds that we never would have imagined. Data and data storage is very much at the heart of these trends."
The $100 million will be deployed through Micron Ventures, the strategic investment arm of the 40-year-old memory giant, and will focus on boosting promising startups in AI by providing capital and/or memory and storage support for emerging technologies. In a related piece of news, Micron also announced a $1 million grant to universities and nonprofits studying how AI can advance social good.
Colm Lysaght, Micron's VP of corporate strategy, said that the $100 million fund was Micron Ventures' first fund focused explicitly on AI. "I think that part of it is understanding the ecosystem, being able to enable companies and startups by providing memory and storage to help bring a product to market, and part of it is also understanding where the market is moving," he said.
Micron's business segments include computer and networking, storage, mobile and 'embedded business', which encompasses areas like automotive, industrial and IoT. The computer and networking segment makes up roughly half of its overall business, at 42% in fiscal 2017.
After more than doubling last year, Micron's stock has jumped up and down throughout 2018 and now trades at just over $40 per share. Over the past few weeks, a combination of light earnings guidance, inventory adjustments and tariff worries have led some investors and analysts to cool on Micron's stock. Given manufacturing and operational footprint in China, it's among the tech stocks believed to be hardest hit by the tariffs.
Alongside a broader tech sell-off on Wednesday, Micron's stock was down 1.56%.