Nutanix, VMware Heads On Memory And CPU Shortage Impacts

VMware and Nutanix are making moves to combat the memory and CPU shortages and get a leg up in the industry as both companies don’t see the shortages being solved anytime soon.

Software stars and competitors VMware and Nutanix say the industry’s memory and CPU shortage issues are not significantly impacting business as both companies are making strategic decisions to avoid customer supply and demand problems.

Nutanix has formed a blockbuster partnership with AMD to develop new AI infrastructure offerings for customers, along with AMD investing a whopping $250 million in Nutanix’s future.

“We are bringing in more and more AMD SKUs to market, so that we can actually offer both AMD and Intel to ameliorate the [CPU shortage] situation,” said Nutanix CEO Rajiv Ramaswami (pictured above left) during the company’s recent earnings report.

VMware, for its part, has created a unique private cloud offering with its VMware Cloud Foundation 9.0 platform that the company says solves the hardware shortages in the market.

“We have essentially solved the hardware shortage and the hardware cost issues with a software solution,” VMware’s Krish Prasad (pictured above right), who leads Broadcom’s VMware Cloud Foundation (VCF) Division, tells CRN.

“Memory costs are skyrocketing. With VCF 9.0, we introduced something called advanced memory tiering,” VMware’s Prasad explained. “What that allows you to do is to solve this exact problem of skyrocketing cost of DRAMs and availability of DRAMs by saying, ‘Hey, you don’t need to use as much DRAMs. You can tier DRAMs with NVMe storage. And then once you do that, ESX through software, will make sure that you’re not seeing a significant performance penalty.”

Nutanix And VMware Blame Hyperscalers’ AI Thirst For Industry Shortages

Both Nutanix’s and VMware’s leaders said the market shortages around CPUs and memory stem from public cloud hyperscalers spending billions on building new data centers to power their AI ambitions worldwide.

“This is being driven by the massive uptick in AI spending across some of these bigger hyperscaler providers that’s causing this big supply issue overall in the industry,” Nutanix’s Ramaswami said.

“People are building out these massive—and spending massive amounts of money—building out these AI data centers that’s consuming all the capacity in the market,” he said.

VMware’s Prasad agreed that the memory and DRAMs shortages, as well as rising costs for servers, are due to hyperscalers buying up all the supply for their AI goals.

“Because of all the huge investment that is happening in the AI space, there’s a shortage of hardware,” Prasad said. “Everybody is building out big data centers and all that kind of stuff.”

Prasad said memory and server costs are “going through the roof” because of it.

“And not only that, you have to be in line to get access to servers because there is a capacity crunch because they cannot meet the demands that AI is driving across the world,” Prasad said.

VMware said the supply shortages are causing customers to rethink the value of virtualization, which is the underpinning of VCF 9.0.

Hyperscalers Gobbling Up All Capacity

Hyperscaler cloud providers like Amazon Web Services, Microsoft and Google are spending billions of dollars each year on building and equipping large data centers to power their AI solutions.

For example, Google says it plans to spend between $175 billion to $185 billion on CapEx investments, with a focus on data centers in 2026.

Amazon, owner of AWS, committed to spending $200 billion in CapEx investments this year.

As of the end of 2025, there are now approximately 1,300 large data centers operated by hyperscale providers across the globe with AWS, Google and Microsoft leading the way—as the three currently own more than half of all data center capacity, according to market data from Synergy Research Group.

Shortages Not ‘Very Short Term’; Public Cloud Costs May Climb

Both Nutanix and VMware don’t believe the memory and CPU hardware shortages will go away soon.

“I don’t think this is a very short term [issue],” Nutanix CEO said. “So I do expect it’s going to take some time to play out for the supply situation to normalize. The suppliers there—both the CPU folks as well as the memory folks—are working hard to go get more supply online, and this is an industry-wide phenomenon.”

VMware’s leader said the shortages are “not going to go away real fast.”

“Because the demand and the shortages and all of that is driven by AI. And AI is not going away anytime soon,” VMware’s Prasad said.

“And by the way, that also is going to drive up the cost of the public cloud, because the public cloud vendors are the ones who are building out these mega data centers and all of that for AI,” Prasad said. “When you do that kind of investment, you have to at some point, it will reflect in the pricing across the board.

Nutanix’s Ramaswami said the hardware shortages in the industry should be “normalized” over the “next couple of years.”

“So it depends on two things: on the demand side of the equation, it depends on how long the AI demand continues. On the supply side, it depends on how quickly the memory providers can bring up supply,” he said.