🤖 AI Just Taxed Your Laptop

Good morning, laptop shoppers.

Your next one is going to cost more, and AI is the reason.

Today we cover the squeeze nobody labeled, and who is getting rich off it.

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Nvidia's CEO Jensen Huang sat down with Axios last week and made a big claim.

The entire semiconductor industry, he said, needs to get 5 to 10 times bigger this decade.

Chips used to be built for people. Roughly a billion of us, poking at phones a few hours a day.

Now they are built for machines. Huang's number: a hundred billion AI agents and billions of robots, all pulling on the same supply chain.

And they never sleep.

The catch is that the industry cannot grow that fast.

Chipmakers can roughly double capacity every year.

Push past that and you hit the physical world, because land, electricity and construction crews do not scale the way electronics do.

The squeeze is already here.

Nvidia cannot get enough HBM, the fast memory stacked next to an AI chip, or enough LPDDR, the low-power kind that goes in phones and laptops.

So it locked supply down, signing a partnership worth more than $500 billion with South Korea's SK Group to reserve years of memory from SK Hynix.

There was almost nowhere else to go.

Three companies make more than 95% of the world's memory: SK Hynix, Samsung and Micron.

SK Hynix alone holds about 60% of the HBM market.

All three are essentially sold out through 2026, and SK Hynix's CEO called 2027 potentially the worst supply year the industry has ever had.

AI is about to raise the price of things that have nothing to do with AI. And it will never show up on the price tag.

Here is how.

Picture a memory factory as a bakery with a fixed number of ovens.

AI memory is a much harder loaf: one gigabyte eats roughly three to four times the space of the regular memory in your laptop.

Same ovens. Far fewer loaves. And the bakery sells to whoever pays most, which right now is Nvidia.

So the three companies making 95% of the world's memory aimed their factories at AI, and the memory inside ordinary electronics got scarce.

The numbers are already ugly.

Gartner expects memory prices up about 130% by year end, pushing PC prices up 17% and smartphones up 13% against 2025.

One detail shows how strange this is.

DDR4, a memory standard from 2014, now costs more per gigabit than HBM3e, the cutting-edge stuff going into AI chips.

Decade-old technology is pricier than what replaced it.

So what does this mean for you?

As a shopper, you are paying an AI tax on your next phone, laptop, TV and car. Nobody will label it that way.

As an investor, this is the cleanest pricing power in the market.

Memory makers spent thirty years getting crushed every cycle.

Now three of them control supply, the order book is full for years, and their biggest customer just prepaid $500 billion.

We covered that turn in Micron Breaks the Cycle.

It also explains why the buildout keeps hitting walls. Google is renting capacity it cannot build fast enough.

These cycles end the way this one is starting: shoppers stop paying.

If Dell, HP and Apple swallow the cost instead of passing it on, the pain lands on their margins rather than your wallet.

We remain bullish on memory.

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