Dell Technologies is implementing significant price increases across its commercial product lines starting December 17, 2024, driven by an industry-wide shortage of memory and storage chips caused by surging AI infrastructure demand. According to internal documents obtained by Business Insider, the price hikes will affect Dell’s commercial business, which accounts for approximately 85% of the company’s annual revenue in its Client Solutions Group (CSG) division.
The price increases are substantial and vary based on configuration. Dell Pro and Pro Max notebooks and desktops with 32GB of memory will cost between $130 and $230 more, while top-tier systems with 128GB memory will see increases of $520 to $765 per device. Storage upgrades are also affected, with 1TB configurations adding $55 to $135 to the overall cost. A Dell sales employee, speaking anonymously, indicated that percentage increases would range between 10% and 30% depending on the contract.
AI-specific hardware is also experiencing price jumps. AI laptops containing Nvidia Blackwell GPUs will become more expensive, with systems featuring an Nvidia RTX PRO 500 Blackwell GPU with 6GB costing $66 more, and 24GB GPU configurations increasing by $530. Even monitors are affected, with the Dell Pro 55 Plus 4K Monitor set to rise by $150 from its current $1,349.99 price point.
The root cause is unprecedented AI demand for chips. Tech companies are purchasing massive quantities of DRAM (dynamic random-access memory) and NAND (non-volatile flash memory) chips to power AI models and cloud services, creating severe shortages for consumer devices. The three companies dominating the DRAM market—Samsung, SK Hynix, and Micron—have raised prices in response. DRAM prices are expected to rise 30% in the final quarter of 2025, having already increased by 50% throughout the year, according to Counterpoint Research.
Dell’s COO Jeff Clarke called the situation “unprecedented,” stating during the company’s third-quarter earnings call that “we have not seen costs move at the rate that we’ve seen.” The company is attempting to mitigate impacts by absorbing some costs internally through margin reductions and limiting sales discounts. Dell warned its sales teams that “global memory and storage supply are tightening fast” and that suppliers are “signaling further increases and allocation constraints driven by AI demand.” The shortage is expected to continue throughout 2026, affecting all PC vendors including Lenovo and HP.
Key Quotes
Global memory and storage supply are tightening fast. The price of contracts for DRAM and NAND chips has already risen significantly this quarter, and suppliers are signaling further increases and allocation constraints driven by AI demand.
Dell warned its go-to-market sales teams in an internal email on November 25, emphasizing the severity of the chip shortage and directly attributing it to AI infrastructure demand, signaling that the situation would worsen before improving.
We have not seen costs move at the rate that we’ve seen. Demand is way ahead of supply. And as we wade our way through that, we’re going to lean on the things that we’ve always done.
Jeff Clarke, Dell’s COO and vice chairman, made this statement during the company’s third-quarter earnings call on November 25, characterizing the price increases as unprecedented in his experience and acknowledging the fundamental supply-demand imbalance.
The entire supply chain simply can’t meet the demand that is now required and that inevitably leads to these kinds of challenges.
Bob O’Donnell, president and chief analyst at Technalysis Research, explained the structural nature of the shortage, noting that these price increases will likely have a noticeable impact for all types of PCs from every vendor and that the shortage is expected to continue throughout 2026.
It’s impacting everyone, and there’s no way around it currently, so customers will just have to pay more if they want the products.
An anonymous Dell sales employee described the situation as beyond anyone’s control, reflecting the reality that both Dell and its customers face unavoidable cost increases due to the AI-driven chip shortage.
Our Take
This development reveals a critical inflection point in the AI revolution’s economic impact. While much attention focuses on AI’s potential to transform industries, this story exposes the hidden infrastructure costs of AI advancement. The competition for chips between AI data centers and traditional computing represents a resource allocation crisis that will force businesses to make difficult choices about technology investments. Dell’s situation is particularly telling because it affects enterprise customers who typically have more negotiating power and longer-term contracts. The fact that even these customers must absorb 10-30% price increases demonstrates AI’s overwhelming influence on supply chains. The 2026 timeline for continued shortages suggests this isn’t a temporary disruption but rather a structural shift in the technology market. Companies building AI infrastructure are essentially crowding out traditional computing needs, creating a two-tier technology economy where AI-related hardware commands premium pricing and availability.
Why This Matters
This story represents a concrete example of how AI’s explosive growth is creating ripple effects throughout the entire technology ecosystem. The chip shortage illustrates the zero-sum competition between AI infrastructure and consumer computing, where the insatiable demand for AI data centers is directly impacting everyday business technology costs. For enterprises, this means significantly higher IT budgets and potential delays in hardware refresh cycles, affecting productivity and competitiveness.
The broader implications extend beyond Dell. As an industry-wide phenomenon affecting major manufacturers like Lenovo and HP, these price increases signal a fundamental shift in the technology supply chain. Companies that control chip manufacturing—Samsung, SK Hynix, and Micron—now wield enormous pricing power as AI demand continues accelerating. The 30% projected price increase for Q4 2025, following a 50% rise throughout the year, demonstrates that AI’s infrastructure requirements are reshaping market dynamics in ways that will persist through 2026 and potentially beyond. This creates strategic challenges for businesses planning technology investments and highlights the growing tension between AI advancement and traditional computing needs.
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Source: https://www.businessinsider.com/dell-price-hikes-memory-demand-ai-chip-race-computer-2025-12