Abstract Optical materials with high dielectric constant are essential for intensifying electromagnetic interactions in next‐generation nanophotonic systems, yet surpassing the intrinsic permittivity boundary, particularly in the infrared (IR) regime, remains a formidable challenge. Herein, a Bi‐Ag mixture with 26 vol% Ag is reported that exhibits an ultrahigh real permittivity (≈104, average across 2–20 µm) spanning the mid‐to‐long IR region. In addition to the optical/electronic property contribution of Ag, structural and spectral analysis reveal atomic‐scale interactions between Bi and Ag that induce lattice contraction in Bi crystals, widen its optical bandgap, and eventually enhance effective permittivity. Furthermore, this Bi‐Ag mixture possesses thermally responsive infrared modulation, with a reversible 10%@10 µm transmittance reduction near the material's melting point (255 °C). By elucidating the electron configuration change, microstructure interaction, and temperature‐sensitive optical property, this work establishes a pathway for engineering high permittivity materials with tunable, memory functionality for infrared sensing, optical switching, and adaptive optoelectronics.