AI's chip appetite starts showing up in phone prices

A new policy report has put a name to something consumers have started to notice anecdotally: the AI data centre boom is nudging up the price of ordinary electronics. The report warns that everyday technology could become more expensive as chipmakers shift scarce memory-chip capacity toward higher-margin AI uses. Phones, laptops and cars all depend on the same memory chips now being redirected towards training and inference clusters.

Patrick McHenry, the North Carolina Republican who left Congress in 2025 and now advises the investment bank Lazard, was among those reacting to the findings. He contends that less-advanced chips used in household products should be treated differently from the most sophisticated chips, which raise greater national-security concerns. The distinction matters because export controls and reshoring efforts have so far tended to treat chip supply chains as a single undifferentiated national-security problem, rather than separating consumer-grade parts from frontier-model silicon.

“We’re over the hump, I believe, on these costs being borne by the American people.”

That confidence sits awkwardly next to McHenry’s own admission that the transition itself is the source of the pain. He also argues that efforts to de-risk supply chains from China are contributing to higher costs in the short term. Shifting production away from established Chinese capacity into new facilities elsewhere, he suggests, was always going to carry a price, and it is consumers who are footing it now. The concession undercuts his own reassurance: the cost of the AI build-out is no longer confined to power bills and land use. It is arriving in the price of a new phone.