The artificial-intelligence boom that has enriched chipmakers is now hitting consumers in the wallet, as two of the world's largest technology companies moved to raise prices and blamed a global shortage of memory chips. Apple chief executive Tim Cook said price increases on the company's devices have become "unavoidable" because of a worldwide shortage of computer memory and storage, while Microsoft announced higher prices for its Xbox consoles.
Cook framed the increases as a direct consequence of surging demand from AI companies, which are buying up memory chips to fill data centers and squeezing the supply available for consumer electronics. With Apple set to launch its iPhone 18 lineup later this year, the timing is conspicuous: the research firm TechInsights estimated that the next iPhone Pro could rise by more than $200, pushing its price to around $1,299.
Microsoft was more specific. The company said that effective August 1, it would raise Xbox console prices worldwide, with 512GB models going up $100 and 1TB models up $150. Microsoft attributed the move to the cost of console storage and memory, which it said has increased roughly 2.5 times since its last price increase in October — a striking jump that lays bare how sharply component costs have climbed.
The price hikes are the consumer-facing edge of a supply crunch that has been building for months. Memory chips — the DRAM and high-bandwidth memory that store and feed data to processors — have been swept up by the AI sector's voracious appetite, with manufacturers prioritizing the high-margin memory bound for AI accelerators over the commodity chips used in phones, laptops and game consoles.
That dynamic was thrown into sharp relief the same week by Micron Technology, whose blowout quarterly earnings revealed record gross margins near 85 percent and high-bandwidth memory sold out for all of 2026. The windfall flowing to memory makers and the rising prices facing device buyers are two sides of the same constrained supply chain: when chipmakers can sell every unit of premium memory they produce to AI customers, consumer-product manufacturers must pay more to compete for what remains.
For shoppers, the practical message from both Apple and Microsoft is that the era of steadily falling — or at least stable — electronics prices may be pausing. Analysts have warned that the squeeze could persist as long as AI demand outpaces the industry's ability to add memory capacity, a process that takes years and billions of dollars in new fabrication plants.
The broader question is how far the cost will spread. Memory is a component in virtually every modern electronic device, from cars to cloud servers, and sustained shortages tend to ripple outward. Apple and Microsoft are among the first major consumer brands to put a number on the impact, but they are unlikely to be the last as the bill for the AI build-out increasingly lands on everyday buyers.