If you have been considering upgrading your business hardware, the time to act is now. A perfect storm of artificial intelligence (AI) demand and memory shortages is driving price increases across the technology sector and small businesses stand to be hit hardest.
The AI boom is reshaping the hardware market
While the AI revolution promises exciting possibilities for businesses, it is creating an immediate and tangible impact on something far more basic: the cost of the hardware your business depends on every day.
The explosive growth of AI data centres has created an insatiable demand for memory chips. Tech giants like OpenAI, Google and Microsoft are purchasing memory components on a scale never seen before.
According to recent industry reports, OpenAI's Stargate project alone has reportedly secured contracts for up to 900,000 DRAM wafers per month, representing nearly 40% of global production capacity.
The price shock hitting business hardware
The numbers tell a stark story. DRAM prices have surged by approximately 171% year-over-year, with some memory kits more than doubling in price within just a few months. What was once one of the most affordable components in business technology has become one of the most expensive.
This isn't just affecting specialised AI hardware. The ripple effects are spreading across the entire technology ecosystem:
Server hardware price increases
Major manufacturers including Dell, Hewlett Packard Enterprise (HPE) and Lenovo have begun notifying clients of significant price adjustments:
- Dell is implementing price increases of 15-20% on servers, potentially taking effect as early as mid-December 2025.
- HPE has confirmed it's experiencing "constraints and pricing increases on certain memory components".
- Lenovo has warned that all current pricing quotes will become obsolete from 1 January 2026.
Dell's Chief Operating Officer, Jeff Clarke, described the situation as "unprecedented," noting that "demand is way ahead of supply" and that the company has never seen memory-chip costs rise this fast.
PC and laptop price hikes
Desktop computers and laptops aren't immune either. According to industry sources, major manufacturers are planning price increases of approximately 5% for PCs alongside the steeper server increases.
With AI workloads driving record demand, suppliers have gained significant pricing power. HP's CEO has indicated that the second half of 2026 could see further PC price increases if DRAM conditions don't improve.
Why this matters for your business
These aren't just numbers on a spreadsheet. For small and medium businesses planning technology upgrades or expansions, this translates into significantly higher capital expenditure:
- A server that cost $10,000 in early 2025 could now cost $11,500-$12,000.
- A batch of 20 business laptops that would have cost $30,000 might now run $33,000 or more.
- Routine hardware refresh cycles could consume 15-20% more of your IT budget.
The situation is particularly challenging because these aren't temporary spikes. Industry analysts suggest the memory shortage could persist until at least 2027-2028, as new manufacturing facilities won't come online quickly enough to meet demand.
What small businesses should do now
Given these market conditions, here is our practical advice:
1. Accelerate planned hardware purchases
If you have been planning hardware upgrades or replacements for the next 12-18 months, consider moving those purchases forward. Current pricing, while elevated, is likely to be more favourable than what you will encounter in 2026.
2. Review your hardware inventory
Conduct a thorough assessment of your existing systems. Identify equipment that is approaching end-of-life or showing performance issues. Prioritise replacements before prices climb further. Here’s a guide on how to choose the best computer for your business.
3. Consider leasing options
Some leasing arrangements may provide pricing protection against market volatility. Discuss with your IT provider whether leasing could offer better value than outright purchases in the current climate.
4. Optimise what you have
Work with your IT services provider to maximise the lifespan and performance of existing hardware. Proper maintenance, strategic upgrades and software optimisation can extend the useful life of your current systems.
5. Plan for higher IT costs
Update your 2026 budget projections to account for 15-20% increases in hardware costs. This will help avoid unwelcome surprises and ensure you have adequate funding for necessary technology investments.
The bigger picture
This situation highlights a critical reality: decisions made in the AI sector are having far-reaching consequences for everyday businesses. While data centres compete with virtually unlimited budgets for memory components, small and medium enterprises are left managing the fallout.
With new manufacturing capacity years away from production, businesses should prepare for an extended period of elevated hardware costs.
If you need any assistance with hardware needs or planning your technology investments, reach out to Netway for more information.