Chip demand from data centres is tightening global supply chains, raising costs for phones, routers, consoles and consumer electronics

The artificial intelligence boom is beginning to reshape the consumer technology market, with growing warnings that the global rush to build AI data centres could drive up the price of smartphones and other electronic devices.

BT chief executive Allison Kirkby warned on Thursday, May 21, 2026, that surging demand for semiconductors used in AI infrastructure is creating pressure across chip supply chains. According to The Guardian, she said major technology companies are buying large quantities of memory chips for AI data centres, reducing available capacity for consumer electronics such as smartphones, broadband routers and connected devices.

The concern is that artificial intelligence is no longer just a software story. Behind every chatbot, coding assistant and AI search engine is a vast physical infrastructure: servers, graphics processors, high-bandwidth memory, cooling systems and power-hungry data centres. As companies race to expand that infrastructure, the same semiconductor ecosystem that supports phones, laptops and gaming devices is coming under pressure.

The effect is already visible in some areas of the technology market. The Guardian reported that companies including Microsoft, Samsung and Dell have responded to higher component costs by raising prices or removing cheaper models from their product ranges. Gaming hardware has also been affected, with Sony and Nintendo announcing price increases in the United States and Europe.

Smartphones may be next. Premium handset makers such as Apple have not yet broadly raised prices in response to the latest supply pressures, but industry executives expect costs to rise if chip demand remains tight. Memory chips are especially important because modern smartphones increasingly rely on more powerful processors and larger memory capacity to support on-device AI features, advanced photography, translation tools and personal assistants.

The pressure comes at a delicate time for the mobile industry. Smartphone makers have spent years trying to persuade consumers to upgrade more frequently, but higher prices could make that harder. If manufacturers pass rising component costs directly to buyers, mid-range devices may become less affordable, while flagship phones could move further into luxury territory.

The AI sector, meanwhile, continues to attract massive investment. Reuters reported this week that major technology companies are still pushing aggressively into artificial intelligence, with Google using its developer conference to promote new AI tools, coding systems and scientific research platforms.

That investment is intensifying competition for advanced chips. Data centres need huge quantities of high-performance semiconductors, and demand is increasingly concentrated among a small number of powerful technology firms. The result is a market in which AI infrastructure can outbid consumer electronics for scarce components.

There is also a strategic dimension. Governments in the United States, China, Europe and Asia are trying to secure domestic chip supply chains, seeing semiconductors as essential to economic power and national security. But building new fabrication plants takes years, meaning supply cannot easily adjust to sudden demand from the AI sector.

For consumers, the consequences may appear gradually: fewer budget devices, more expensive upgrades, and longer gaps between major price reductions. For manufacturers, the challenge will be balancing AI innovation with affordability. Many companies want to market the next generation of phones as “AI smartphones,” but the same technology trend that makes those devices more advanced may also make them more expensive.

The wider message is clear: artificial intelligence is no longer confined to apps and cloud platforms. It is now influencing the cost, availability and design of everyday technology. The next smartphone price rise may not come from a new camera or a better screen, but from the global race to power AI.