Computers and their graphics processing units are becoming hot commodities, with prices poised to worsen rather than improve.
Demand for processors is set to impact everything from gaming devices to basic memory sticks, delivering a pincer attack on consumer wallets.
“AI demand is driving up the price,” noted Auron MacIntyre. A product that has been on the market for about four years—the handheld gaming device Steam Deck—saw its price jump by $300 in May alone.
MacIntyre explained: “Over the entire history of video games, systems went down in price as they get older. You might say ‘who cares it’s a child’s toy’ and fair enough—but it’s a signal of a wider trend. The price is skyrocketing because AI demand is driving up costs on all physical computing hardware from video processors to RAM.”
The surge has been driven by tech and AI companies aggressively purchasing GPUs—typically used in phones, laptops, and gaming consoles—to power their data centers.
Just a few years ago, having a few thousand GPUs in a single facility was considered cutting-edge. Today, facilities now house upwards of 100,000 GPUs “interconnected through high-speed networking systems designed to operate as a single computational unit,” industry data shows.
While the mind may imagine an all-powerful energy source or unseen technology at the core of these sprawling data centers, photos inside reveal they are literally thousands of computers plugged together, powering search engines and AI agents.
The writing has been on the wall since at least 2024. Microsoft purchased 485,000 Nvidia Hopper GPUs that year, Meta acquired an estimated 224,000, ByteDance bought around 230,000, and xAI secured 200,000.
Last November, industry analysts warned manufacturers that price hikes would unfold as memory costs rose over 170% year-over-year.
This prediction proved accurate: GPU pricing has risen between 5% to 20% or more. Shortages in high bandwidth memory, graphics double data rate, and dynamic random-access memory have contributed to the situation.
The result is product lead times stretching an additional three to seven months.
Consumers may find themselves better off hoarding GPUs for themselves. The heightened demand not only drives up prices but also slows depreciation rates.
A company selling refurbished GPUs noted that in the second year of a processor’s life, it loses only 15 cents on the dollar. By the third year, the same GPU retains 84 cents of its value.
