• Soaring memory chip prices, driven by AI demand, have added about 0.3 percentage points to U.S. core inflation, according to Wolfe Research.
  • Rising DRAM and NAND costs are pushing up prices for computers, smartphones, and other devices, with Apple (AAPL) expected to hike prices on several products.
  • Wolfe warns that AI is becoming an inflation driver rather than a disinflationary force, with price pressures likely to persist through 2026–2027.

The AI boom is now feeding directly into U.S. inflation as memory-chip prices surge and data-center capacity expands at a record pace. Wolfe Research estimates that rising costs for DRAM and NAND memory have contributed roughly 0.3 percentage points to core inflation recently, a trend that could continue as hyperscalers and enterprise customers race to build out AI infrastructure. "AI is starting to show up as an inflationary force, not the disinflationary one many had hoped for," the firm noted in a research note, pointing to data-center electricity demand and higher component costs feeding through to consumer electronics. Prices for laptops, smartphones, and servers have all edged up, and Apple is expected to raise prices on several products this fall as memory costs climb, according to people familiar with the matter. The memory squeeze is the latest twist in a year of surprise price pressures. While many economists had expected AI to eventually boost productivity and lower costs, near-term supply constraints are having the opposite effect. DRAM contract prices rose 17% in the second quarter alone, and NAND flash prices are up 25% year-over-year, driven largely by orders from data-center operators. "We're seeing a classic supply-demand imbalance," said an industry analyst who declined to be named, citing client confidentiality. "Memory makers are prioritizing high-value AI chips, which is squeezing supply for the rest of the market." The impact is already visible in consumer prices. The latest CPI report showed a 0.1% month-over-month increase in the cost of computer hardware, while smartphone prices edged up 0.2%. Wolfe's analysis suggests that if memory prices remain elevated, core inflation could stay elevated through early 2027. Not everyone sees a permanent shift. Some analysts argue that as memory makers bring new capacity online—especially for high-bandwidth memory used in AI accelerators—prices will moderate. Samsung (SSNLF) and SK Hynix (000660.KS) have both announced major expansions, though these plants typically take 18–24 months to produce output. For now, the AI inflationary wave is real and present. Without a meaningful supply response, consumers and businesses alike will continue to feel the pinch from the memory boom.

Correction: An earlier version of this article misstated the timeframe of inflation persistence. It has been updated to reflect Wolfe's estimate of 2026–2027.