Tech firms are blaming AI for mega device and console price rises

Apple, Microsoft, and Nintendo are raising prices on devices and consoles that are years old, blaming a surge in memory-chip costs driven by the artificial intelligence boom. The price hikes, some exceeding 20%, have sparked consumer backlash and accusations of corporate greed. Apple has raised the prices of its tablets and laptops by nearly 20%, while Microsoft announced a third price increase in just over a year for its five-year-old Xbox Series S and X consoles, adding at least $100 [1]. The cost of a new Xbox is now 30% to 40% higher than it was a year ago [1]. Nintendo also confirmed it would raise the Switch 2's price globally from September [1]. Valve cited spiking component costs for the higher-than-expected price of its new Steam Machine gaming PC and had already raised the cost of its handheld Steam Deck by 40% in May [1]. The companies attribute the increases to a severe shortage of memory chips, particularly DRAM and NAND flash, which are essential for both consumer electronics and the data centers powering artificial intelligence [1]. James Bull, a senior tech analyst at RSM UK, said the four largest US tech firms are expected to spend hundreds of billions of dollars on data centers and AI equipment in 2026 [1]. "Essentially, the MacBook on consumers' desks is now competing for the same Dram as the data centres powering ChatGPT and is losing," Bull said [1]. Data from Counterpoint Research shows the price of 32GB DDR5 components for PCs jumped from $94 in the three months to September 2025 to $127 in the next quarter, then soared 122% to $282 in the first quarter of 2026 [1]. Yang Wang, principal analyst at Counterpoint Research, called the memory crisis "the most disruptive supply-side event the smartphone industry has ever faced" [1]. This supply crunch is unfolding as the technology industry consolidates around a small number of dominant firms. Big Tech, most commonly defined as Microsoft, Apple, Alphabet, Amazon, and Meta, accounts for about a quarter of the S&P 500 [11]. These companies are also major investors in the AI infrastructure that is driving chip demand. The broader economic context includes sustained global inflation and supply chain crises that have marked the 2020s, alongside an escalation in military conflicts [4]. Some analysts note that geopolitical factors are compounding the memory shortage. Danni Hewson, head of financial analysis at AJ Bell, said recent price hikes could "go even higher as chip makers deal with increased costs resulting from the blockade in the Strait of Hormuz" [1]. She added that while there is renewed optimism about the situation in the Middle East, "the impact of the last couple of months means some inflation is now baked in" [1]. The price increases have drawn sharp criticism. US Senator Bernie Sanders called Apple's move "corporate greed" in a post on X, noting the company reported a 16% revenue increase to $144 billion in the last quarter of 2025 [1]. Micron, an American chip maker, reported that its quarterly revenue had quadrupled amid the AI boom [1]. Micron's boss, Sanjay Mehrotra, told investors the company does not have "line of sight as to when memory supply will be able to catch up with increasing demand" [1]. Counterpoint Research expects the constrained supply situation to last for as long as two years [1].