Trends›Technology turns inflationary
Technology turns inflationary
AI-driven compute, memory and software pricing power has structurally reversed forty years of IT price deflation, so the US tech-price line stays non-negative through 2027 and chips become a 1970s-oil-style terms-of-trade shock.
83 confidence, computed 23 Oct 2026
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The evidence, newest first
- Jul 2026
against · observable Electricity prices were up 4.0 percent year-over-year as of June 2026, significantly lower than the 6% inflation rate Goldman Sachs had forecast for AI-driven electricity demand. Consumer Price Index - June 2026 - Jul 2026
for · primary Federal Reserve FEDS Note: Investment-specific technology shocks associated with AI boom are linked to persistent current account deterioration and rising import prices. Technology Shocks, the AI Boom, and the U.S. Current Account - Jul 2026
for · primary Goldman Sachs estimates AI-driven memory prices, software increases, and electricity costs will contribute approximately 50 basis points to core PCE inflation by end of 2026. AI intensifies U.S. inflation? Goldman Sachs: Rising prices of memory, electricity, and software may push core PCE up by 0.5 percentage points by the end of the year - Jul 2026
for · primary Goldman Sachs forecast in February 2026 that electricity prices will rise 6% in 2026 and 2027, with AI-driven demand expected to push utility costs into 2028 or beyond. Massive AI buildout poses latest inflation threat as consumers pay more for laptops and electricity - Jul 2026
for · primary First formal premium-tier pass-through of memory costs to consumers: Cook told WSJ price rises are 'unavoidable', MacBooks/iPads up ~25 Jun (stock's worst day in over a year), analysts expect $150-200 across the autumn iPhone lineup. Apple raises MacBook/iPad prices on memory costs; Nothing cancels CMF Phone (Thursday Four cost-curve issue verification) - Jul 2026
for · primary Conventional DRAM contract prices forecast to rise 13–18% QoQ in 3Q26, NAND Flash 10–15% QoQ, moderating from ~60% Q2 gains but staying positive through 2026. AI Server Demand Continues to Support Memory Prices in 3Q26, but Gains Moderate as Consumer Demand Weakens and High Base Effects Take Hold - Jun 2026
for · primary Jefferies forecasts memory contract pricing +40-50% QoQ in Q3 2026, +30-40% in Q4 and ~40-45% YoY into 2027 on zero wafer capacity growth - a direct silicon-input price shock feeding electronics BOM costs rather than the historic IT deflation. Jefferies: memory +40-50% QoQ on zero wafer capacity growth (via Semi Doped Daily) - Jun 2026
for · primary FOMC June 2026 minutes: Participants noted ongoing strong demand for AI infrastructure would likely sustain upward pressure on prices for technology products and electricity. Federal Reserve flags AI demand as inflation risk in latest minutes - Jun 2026
neutral · observable IT hardware and services index at 100.007 (Dec 2024=100) as of May 2026, remaining essentially non-negative. Consumer Price Index for All Urban Consumers: Information Technology, Hardware and Services (CUSR0000SEEE) - Jun 2026
against · primary IT hardware and services experienced 40 years of cumulative deflation: $20 in 1988 = $1.34 in 2026. Information technology, hardware and services price inflation, 1988-2026 - Jun 2026
for · primary Semiconductor supply is the universal binding ceiling (Earth or space): AI consumes ~60% of TSMC N3 in 2026 rising to ~86% in 2027, DRAM AI-demand share goes 12% (2023) to ~70% (2027) with HBM using ~3x the wafer/bit of commodity… SemiAnalysis — To Boldly Go: The Case for Space Datacenters (Space DC TCO) - Jun 2026
for · primary Conventional DRAM contract prices increased 93–98% QoQ in 1Q26; memory industry revenue surged 81% QoQ to $97 billion, demonstrating structural pricing power. Rapid Contract Price Surge Drives 1Q26 DRAM Industry Up 81% QoQ - May 2026
against · observable The Fed authors estimate 25% to over 50% of the measured surge may reflect CPI/PCE category mismatch and inadequate quality adjustment rather than genuine price increases — tempering the 'structural reversal' read. Fed FEDS Note — measurement caveat (same note) - May 2026
for · primary The category averaged -5.3%/yr deflation over 2000-2025 but ran a 73% annualized increase Nov 2025-Mar 2026 (flash drives +69% since Nov 2025), explicitly tied to AI data-center storage demand — a sharp reversal. Fed FEDS Note — measurement of computer software/accessories inflation - May 2026
against · observable Goldman forecasts core PCE slowing from 3.2% (Dec 2026) to 2.2% (Dec 2027) as 'AI and energy effects wane' — framing the impulse as transitory, not a structural 40-year reversal. Goldman sees inflation cooling by 2027 as AI/energy effects fade (Investing.com) - May 2026
for · observable Goldman estimates AI-related price pressures raised core PCE/CPI by ~0.3pp/0.1pp over the past year and will add a further ~0.3pp/0.1pp over the next year. Goldman: AI raised core PCE ~0.3pp / CPI ~0.1pp (Fortune) - Apr 2026
for · primary Gartner estimates DRAM annual prices will increase 125% and NAND flash 234% in 2026 with no meaningful relief expected until late 2027. Gartner Forecasts Worldwide Semiconductor Revenue to Exceed $1.3 Trillion in 2026 - Mar 2026
for · primary Data centers alone increase headline PCE inflation by 0.05 percentage points in 2026 and by 0.13 percentage points in 2030 through their effect on retail electricity prices. Data center boom expected to raise electricity component of PCE inflation - Feb 2026
for · observable Retail electricity prices rose ~7% in 2025 (~2x headline CPI), part of a ~40% climb since 2021, with data-center demand expected to keep prices rising through the decade. Electricity rising ~2x inflation; data-center demand (CNBC) - Feb 2026
for · primary Conventional DRAM contract prices revised to a record +90-95% QoQ in Q1 2026, with all memory categories hitting record-high QoQ increases on AI demand. TrendForce — DRAM contract prices +90-95% QoQ Q1 2026 - Jan 2026
for · observable Memory effectively 'sold out' with HBM reallocation driving an unprecedented price surge and no new DRAM supply expected until 2027 or later — a durable, not transitory, squeeze. AI memory sold out, unprecedented price surge, no new supply until 2027 (CNBC)
What would move itthe measures watched
- watchBLS CPI — IT hardware & services (and computers/peripherals sub-index). The 40-year deflation reversal is confirmed only if these lines hold non-negative YoY through 2027
- watchDRAM/NAND/HBM contract prices (QoQ). The upstream pressure source; sustained double-digit QoQ increases with no new supply until 2027 is the 'silicon shock' core; a sharp reversal unwinds it
- watchCPI Electricity (and PCE electricity component). The terms-of-trade analogy runs through power; electricity persistently ~2x headline on data-center demand supports the structural framing
- watchGoldman/Fed estimates of AI contribution to core PCE/CPI. Watch the 2027 'fade' forecast — if it fades, the shock is transitory not structural
- watchMeasurement-error / quality-adjustment caveats on tech CPI. If much of the 'reversal' is CPI/PCE category mismatch and missing quality adjustment, the structural claim weakens even as indices turn positive