Memory loss due to diabetes is often a result of uncontrolled blood sugar levels. High levels of glucose in the blood can damage blood vessels in the brain, which can lead to a condition called vascular dementia. Vascular dementia is a type of dementia that is caused by reduced blood flow to the brain. In addition, diabetes can also affect the functioning of the hippocampus, which is the part of the brain responsible for forming and storing new memories. When the hippocampus is damaged or not functioning properly, it can lead to memory problems.