I just purchased a new M1 Macbook Pro last week and the only applications I have downloaded are Photoshop, Illustrator, and Premiere Pro. As I started running Premiere Pro and started to edit my second edit of my AVI videos, averaging around 250 MB, of my video I got this message: "Your system has run out of application memory." I'm not sure how or why this is happening as I have almost nothing on my computer. I also got a message before I downloaded the app, I attached the messages below
Editing, Error or problem, Formats, Hardware or GPU, Performance
I am having the same issues. My configuration is the same as yours. With Photoshop as the only app, editing a single photo rapidly leads to 20gb memory usage and the application full error. I am now updating to Big Sur latest version in the hope that it fixes things.