Apple and Xbox are raising prices. Here's one thing you can do about it. 💻🎮

If you can't beat 'em, then join 'em 🤝

In what may be the clearest early example of how AI is negatively affecting ordinary people, Apple and Microsoft are raising prices significantly on some of their most ubiquitous consumer tech products.

On Thursday, Apple raised prices for Macs, iPads, and home devices by roughly 15%-20%.

And effective Aug. 1, the price of Microsoft’s 512 GB Xbox models will increase by $100 (~25%) and the 1 TB models by $150 (~25%-30%).

And the companies are blaming AI for the price hikes. From Bloomberg: “An Apple spokesperson said that ‘the rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage’ and that the company has ‘never seen a component price increase this much, this quickly.’”

“Unfortunately, console storage and memory prices have increased by more than 2.5x, and we expect another doubling by the fall of 2027,” Microsoft said. “The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles.“

It’ll be months and years before we fully understand how AI will affect all of our lives. Will we all benefit from a productivity boom? Or will the costs offset those gains?

For now, we’re learning that companies selling non-AI tech products are competing with the megacap tech hyperscalers, which are spending hundreds of billions of dollars building out AI infrastructure.

And this industry-specific supply-demand mismatch is a microeconomic manifestation of a macroeconomic phenomenon we call inflation.