The world has a memory problem, thanks to artificial intelligence.

The explosion in AI-related cloud computing and data centers has led to so much demand for certain types of memory chips that now there's a shortage. The imbalance is expected to start affecting prices of all sorts of products powered by technology.

"I keep telling everybody that if you want a device, you buy it now," said Avril Wu, a senior research vice president at TrendForce, a Taiwan-based consultancy that tracks markets for computer components. "I myself bought an iPhone 17 already,"

The chips are known as RAM, or random access memory, and are crucial to making sure that things like smartphones, computers and game consoles run smoothly. Chips allow you to keep multiple tabs open in browsers, for instance, or watch videos without them being choppy.

Wu said TrendForce's data indicates that demand for RAM chips exceeds supply by 10% – and it's growing so fast that manufacturers are having to shell out a lot more to buy them each month.

Wu said this quarter alone, they're paying 50% more than the previous quarter for the most common type of RAM, known as DRAM – dynamic random access memory. And if producers want the chips sooner, they're paying two to three times more.

Wu expects DRAM prices to rise another 40% in the coming quarter, and she doesn't expect the prices to go down in 2026.

How AI is gobbling up memory

AI data centers require huge amounts of memory to accompany their cutting-edge graphics processing unit (GPU) microprocessors that train and operate AI models.

"AI workloads are built around memory," said Sanchit Vir Gogia, CEO of the tech advisory firm Greyhound Research.

What's more, AI companies are spending billions of dollars constructing data centers at warp speed around the world. It's the reason why Gogia says the demand for these chips isn't just a cyclical blip.

"AI has changed the nature of demand itself," he said. "Training and inference systems require large, persistent memory footprints, extreme bandwidth, and tight proximity to compute. You cannot dial this down without breaking performance."

More chips for AI means fewer  chips for other products

Idaho-based Micron Technology is one of the world's top makers of RAM and it's benefited from this increase in demand. It reported better-than-expected quarterly earnings last week on the back of higher memory chip prices.

CEO Sanjay Mehrotra said the company expected the market to remain strong, as the AI boom continues apace. "We believe that the aggregate industry supply will remain substantially short of the demand for the foreseeable future," he said on a webcast after the earnings report.

Chipmakers like Micron have shifted production to meet as much of the lucrative AI-related demand for high-end memory as they can, according to analysts. That translates into fewer chips for other segments of the market – personal computers, mobile phones, games and consumer products like TVs.

And that means higher costs. Dell Technologies Chief Operating Officer Jeff Clarke noted the higher costs on an earnings call on Nov. 25. For PC's, he said "I don't see how this will certainly not make its way into the customer base."

Analysts say there is no short-term fix.

Tech consultant Wu said the memory chip industry faces a significant bottleneck. By the end of 2026, she said, chip makers will have maxed out how much they can expand production in their current facilities.

She said the next new factory expected to come online is being built by Micron in Idaho. The company says it will be operational in 2027.

Expect suppliers to keep raising prices for the foreseeable future, Wu said.