Data centers are forcing up computer prices

I feel like if there was a month that brought home how the data center buildout is pushing up the price of consumer electronics, it was June 2026.

Valve announced its Steam Machine would start at $1049, though many buyers will end up paying more than that, while Microsoft hiked prices of Xbox consoles by another $100-150. Those are staggering prices, but they only affect a certain segment of video gamers. The real blow came when Apple finally gave into increasing component costs, increasing the prices of Macs, iPads, HomePods, and Apple TV by up to 20%. iPhones were left out of this round, but that’s unlikely to remain the case when new models are announced in the fall.

Outgoing CEO Tim Cook had signaled price increases were coming, telling the Wall Street Journal on June 17 that price increases were “unavoidable.” But the amount of the hike and how soon they came seemed to take people by surprise. And this will not be the end. Industry analysis suggests memory and chip prices are going to keep going up for the next few years, and that will force up the prices of all manner of electronics with it. The sub-$500 laptop is already disappearing as cheaper computers becoming completely uneconomical.

When Valve finally disclosed the Steam Machine price, Valve engineer Pierre-Loup Griffais helped explained how much things have changed in a short period of time. “Things that were a year ago, two years ago, commodity things, you’d just pay the normal price for it and it’s all good,” he said, “now you have to negotiate really hard just to secure a few thousand. And there's so many more people in line in front of you.” He suggested the company doesn’t even have long-term contracts, but essentially has to see what it can buy month by month.

Why? It’s all so a bunch of unimaginably wealthy tech companies can try to force us to use their chatbots and image generators regardless of whether we want to, and build massive data centers that are needed to power the technology. All those data centers need a specific kind of memory, and with all the demand major manufacturers are shifting production to the products that the data centers need instead of those that go into consumer electronics.

There are already ample reasons to oppose their project: from the harmful effects of chatbots to the ways data centers are forcing up energy prices and throwing climate targets to the side. But now they’re even making our computers, game consoles, and our phones more expensive all in the name of their pursuit of power and profit.

Where does it all end? And how far will we let the industry go before we force governments to rein it in?

I actually talked about this with Chris Person over on Tech Won’t Save Us, if you want to listen to our conversation. It’s one of many fascinating conversations I had on the show last month. I also discuss the issue in my forthcoming book Hyperscale that’s out in October.

In this month’s recap, the top stories look at how Huawei has thrived despite US efforts to constrain it, how the US sanctioned Chilean officials assessing an undersea cable to China, and how the FSB took over the Russian internet. Plus, plenty of other great reads, labor updates, and news you might have missed from the past month.

Have a great summer! (Or an enjoyable winter, for those of you on the other side of the equator.)

— Paris