A MULTI-BILLION deal between some of the world’s largest tech giants and the AI behemoth, OpenAI, could push up the price of your laptop, consoles and other tech by potentially hundreds of pounds, experts claim.
A computer memory chip that cost £100 in August now costs over £400 after OpenAI locked up 40% of the world’s memory supply in the deal.
In October, OpenAI’s Stargate project secured agreements with Samsung Electronics and SK Hynix for 900,000 memory chips monthly, roughly 40% of everything the world produces.
Manufacturers are reported as having anticipated the move, with many tech companies stockpiling memory before the crunch so that prices stayed stable.
Others did not, and retail prices have jumped accordingly.
Framework, a self-build laptop manufacturer, pulled its memory kits entirely over fears of profiteering.
It said it had to delist standalone memory to head off scalpers — people looking to resell to consumers and cash in — and said it will likely have to increase its memory pricing soon.
Phone manufacturers face the same squeeze with reports that Android carries 8GB of memory minimum, often 12GB or 16GB for premium models.
Those component costs either get passed to you at the till or squeeze manufacturers’ already-thin margins.
Budget and mid-range phones get hit hardest since their buyers can least afford sudden price hikes.
Infrastructure imperialism
Colette Mason, author and AI consultant at London-based Clever Clogs AI said the public has been told for years that AI will “democratise everything”.
She continued: “But then OpenAI hoovers up 40% of global memory supply and your laptop costs £300 more. That’s not democratisation.”
Colette said the people getting hammered hardest are those that need affordable tech the most.
She added that small and micro-business owners, students and pensioners on fixed incomes needing a working laptop in our increasingly digital world were set to pay the cost.
Colette continued: “Meanwhile, OpenAI gets priority access whilst everyone fights over scraps at triple the price. Manufacturers won’t boost output. They’d rather protect profits than serve humans. This is automation’s ugly cousin: infrastructure imperialism.
“Build your AI empire, let ordinary people absorb the cost and call it progress. When will the public realise ‘advancing AI’ also prices regular humans out of basic computing?”
Who’s footing the bill?
Rohit Parmar-Mistry, founder of Burton-on-Trent-based Pattrn Data said the “democratisation of AI” actually means OpenAI monopolising 40% of the hardware supply we all need.
He added: “This is the classic disconnect between Big Tech ambition and the reality for UK businesses. While Silicon Valley builds ‘Stargate’, professional services firms in Britain are about to foot the bill.
“A 300% hike in memory costs isn’t just a headache for gamers, it’s a direct hit to overheads for every small business trying to upgrade their fleet.”
He said manufacturers are terrified of overproducing, which changes the equation entirely.
Rohit continued: “If the basic hardware to run a business is becoming a luxury item, the software running on it can’t just be a gimmick. If the tools of our trade are going to cost three times as much, the AI running on them better be doing serious heavy lifting.
“Right now, we’re paying premium prices for potential, not performance. We need to stop applauding these massive projects until they actually deliver a return for the people footing the bill.”
Ordinary people priced out
Patricia McGirr, founder at Burnley-based Repossession Rescue Network said ordinary people were being priced out.
She added: “A basic memory upgrade now costs more than a month’s rent for some households. One project locked down a massive share of global supply and the rest of us are left scrambling for what’s left.
“There were no checks, no scrutiny, no thought for the people being priced out of basic computing. If AI needs this level of hardware, why is the public paying for it while everyone else cashes in?”
Kate Underwood, founder at Southampton-based Kate Underwood HR and Training said the potential for a steep memory price hike feels like a bad joke.
She continued: “The reality is staff are stuck on slow, knackered laptops that take forever to load a spreadsheet. They quite rightly moan about the systems and it makes the business owner look tight, when in truth you cannot upgrade everything without basically selling a kidney.
“Seems we now have an AI tax on top of everything else Rachel from Accounts handed out in the Budget last week.”
Not totally powerless
Mitali Deypurkaystha, human-first AI strategist and author at Newcastle upon Tyne-based Impact Icon AI, said consumers can beat the price hikes, but they would need to stop buying newer tech.
She added: “This tiny group of manufacturers have also artificially tightened supply but what gives me hope is that consumers represent only 30% of RAM purchases. However, most chip companies operate at a mere 10%-25% profit margin.
“Most of us don’t need the latest memory to benefit from AI as it runs in the cloud, not on our laptops. If we refuse inflated prices and choose older or second-hand components, we send a clear signal by decimating their profit margins. We’re not as powerless as they think.”
Newspage asked OpenAI for comment on the above – it referred us to a comment made by OpenAI CEO Sam Altman in October.
Altman said: “Korea has all the ingredients to be a global leader in AI—incredible tech talent, world-class infrastructure, strong government support, and a thriving AI ecosystem.
“We’re excited to work with Samsung Electronics, SK hynix, and the Ministry of Science and ICT through our global Stargate initiative to support Korea’s AI ambitions.”
Photo by Sean Stone on Unsplash
