GoPro warns 'substantial doubt about the company’s ability to continue' in regulatory filings — AI memory shortage hits action camera maker

GoPro, the creator of the modern action camera, warned in a regulatory filing on June 1 that it faces “substantial doubt about the company’s ability to continue.” According to Digital Camera World, the news report comes as the camera manufacturer is pummeled on both sides by declining sales and increasing costs, particularly memory chips driven by a global AI shortage.

These action cameras do not have internal memory, meaning buyers must purchase their own microSD cards. So, even though these have skyrocketed in price, the only direct impact they would have on the company would be reduced sales because buyers are balking at the thought of buying a separate storage card. On the other hand, even though camera specifications do not list them, these cameras' processors require RAM.

GoPro, as a niche action camera maker, isn’t in a good position as smartphones have become better at photography and videography. Furthermore, it has faced stiff competition from the likes of DJI and Insta360, which also offer products such as drones and gimbals. While the FCC has banned the former from the U.S. market, the latter is still widely available.

The action camera company suffered a net loss of $432.3 million in 2024, while it managed to shrink this to $93.5 million last year. Unfortunately, GoPro saw reduced sales in April and May this year. When you pair that with the memory chip crisis, which has driven up RAM prices and made supply harder to find, it seems that GoPro is in real trouble.

This filing does not mean the company is in deep trouble just yet, but it publicly signals that it needs to address its situation — otherwise, it could lead to a complete disaster. “Without obtaining additional sources of financing or consummating a strategic transaction, the Company’s ability to continue as a going concern would be materially and adversely impacted,” GoPro said in its regulatory filing. “The Company may be required to significantly reduce, restructure, cease operations, or seek protection under the Federal bankruptcy laws, although no specific plans to file for bankruptcy protection have been initiated or considered.”

Since GoPro is a publicly traded company, it’s required by law to make notifications like this. Still, it does not mean the company cannot turn itself around before it runs out of cash. We’ve seen a few firms turn themselves around before they had to declare bankruptcy. However, because GoPro is focused on such a niche product, vagaries in the direction of its only market will have an outsized impact on its sales and revenue.

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