Apple hikes prices as AI fuels inflation

Today’s hottest gadget is a time machine that will take you to an Apple Store before the company raised prices on its laptops and tablets yesterday.

Conceding that it’s “not welcome news,” Apple announced it has to charge shoppers more as the cost of memory and storage chips skyrockets amid Silicon Valley’s AI data center boom. In a statement, an Apple spokesperson said that the company has “never seen a component price increase this much, this quickly.”

Apple’s stock dipped more than 6% yesterday as investors learned that you’ll now hate yourself even more when you spill coffee on your MacBook:

• Apple’s budget laptop, the MacBook Neo, is now $699, up from $599 (for 256 GB).
• A MacBook Air (512 GB) is now $1,299, up from $1,099.
• An iPad Air (128 GB) is now $749, up from $599.

While iPhones are spared for now, analysts expect Apple to charge as much as $200 more for iPhone 18 models coming out this fall.

When ‘AI’ stands for ‘accelerating inflation’

Some factories that make components for consumer devices are now busy producing the computer chips that power AI data centers, giving them greater pricing power. For instance, Micron, a major supplier of Apple’s memory chips, celebrated blockbuster quarterly earnings this week.

The cost of memory chips has spiked “more than fourfold” since Q4 of last year, one expert told TechCrunch. The MacBook maker isn’t alone in passing these costs onto consumers: Computers and other electronics prices rose around 6% from December to May, per government data.

The other Cook is watching. Fed Gov. Lisa Cook recently noted that AI companies plan to keep spending on data centers, meaning prices for electronics and other products could continue to spike. This could strengthen the case for the central bank to keep interest rates elevated—or raise them higher.

Meanwhile…Fed Chair Kevin Warsh is hopeful that the AI boom will boost productivity, leading to tamer prices—though many economists caution that this could take years.—SK