Processor Prices on the Rise Amid Growing Demand

Computers and their graphics processing units are gaining popularity, but unfortunately, that also means prices are climbing, and not in a good way.

High demand for processors is affecting everything from video games to common memory items, leading to tighter budgets for many consumers.

As one observer noted, “AI demand is driving up prices.”

There’s been a noticeable increase in the price of portable gaming consoles, like the Steam Deck, which has been on the market for around four years. It went for $300 back in May.

Historically, older gaming systems generally see a drop in price over time. It might seem trivial to say “I don’t care about kids’ toys,” but it points to a larger trend. The soaring demand for AI is pushing costs up across the board, affecting video processors, RAM, and other hardware.

The driving force behind this surge is tech and AI companies, which are stockpiling GPUs typically found in smartphones, laptops, and gaming consoles to enhance their data centers.

A few years back, having thousands of GPUs in a facility was considered cutting-edge. Now, more than 100,000 GPUs are connected via high-speed networks, functioning as one computational unit in a single building.

This trend has been visible since at least 2024, when Microsoft purchased an impressive 485,000 Nvidia Hopper GPUs. Meta acquired around 224,000, ByteDance bought about 230,000, and xAI took home 200,000.

In November, reports warned that rising memory costs would inevitably lead to higher prices. Compared to previous years, the price of GPUs has already increased by over 170%.

This prediction proved accurate, as GPU prices have shot up by between 5% and more than 20%. The issues stem from a lack of high-bandwidth memory and other essential components.

Consequently, manufacturing times have lengthened, adding an additional 3 to 7 months to product lead times.

With this escalating demand, consumers might consider securing GPUs for their own use. As demand swells, depreciation slows, making them a worthwhile investment.

Some companies selling refurbished GPUs have noted that they typically only depreciate by about 15 cents on the dollar in the processor’s second year, and in the third year, they lose just one penny more, retaining value at about 84 cents on the dollar.