Meet Ricky, a 14 year old who had been saving years worth of money racked up from Christmas gifts, birthdays, and hours and hours of painstaking chores for one dream: building a gaming computer. Ricky planned this build meticulously. He knows exactly what parts to get, budgeted down to the last penny. Yet, when Ricky finally gets that last bit of money he needs, he’s met with something unexpected: a 400% increase in Random Access Memory (RAM) prices. Suddenly, a dream that was so close within reach has been set back. The culprit? Hungry data centers and mega corporations fueling the generative Artificial Intelligence (AI) boom.
Ricky and his story are technically fictional, but also a growing reality for too many across the nation. Countless aspiring PC (Personal Computer) builders are met with outrageous RAM prices due to the AI boom. RAM is essential to almost all aspects of technology: TVs, computers, consoles, phones, you name it. It’s the short term memory computers use that allows for multitasking and application speed. When a computer is used, all the active data is stored in the RAM so the Central Processing Unit (CPU), essentially the brain of the computer, has fast, easy, access to data. RAM is the backbone of countless online applications. Photoshop, Google Chrome, Instagram, Discord, and a host of other platforms require RAM to store data from tabs, images, messages, and other data.
It’s the same story with AI. When you send a prompt into an AI platform, all the calculating, messaging, and generation take place in RAM. With the current AI boom taking place, people’s dependence on AI continues to skyrocket. Demand is increasing, and new advancements are being made every day in pursuit. OpenAI continues to improve in software engineering. Google continues to make Gemini faster. AI is getting smarter and faster, and to meet demand, giant data centers are being built. It’s all a domino effect from there. More data centers, more servers, more RAM needed, and so on. The result is massive price increases that are shocking, yet also astonishingly simple. More prompts demanded, more RAM needed, higher prices.
As of right now, AI is a lucrative market. Nearly every major company has hopped on the AI train, promoting new AI-powered chatbots and devices.Hopping on this train, Micron, one of the only three main RAM manufacturers, announced that it will stop producing RAM for the consumer market, solely investing into AI. Since then, DDR5 has risen over $100.
Prices will only increase from here, and not just for RAM sticks. The entirety of the electronics market will face major price hikes. Consoles, phones, and TVs will all become more expensive, ultimately pricing out small businesses and lower-income consumers from the market.
The current state of the AI market is a textbook example of a bubble, an unsustainable surge in the price of assets that exceeds their fundamental value, driven by speculative investment. Historic trends show that when there is a bubble, whether it be the 2008 housing market or the dot-com industry, they pop, and it’s immediately followed by a recession. With how big this bubble has gotten, and considering how much people rely on AI now, the economic consequences can be unimaginable.
It’s undeniable that AI has impacted society positively in countless ways. It’s been the driving force behind new innovations, improvements to productive efficiency, and aids to personal life. However, demand for AI is growing at an unsustainable rate, ultimately resulting in major price hikes across the electronics and technology industry, ultimately positing the question: “What good is this progress in new technology if it’s too expensive for anyone to use?”
