{"id":652374,"date":"2026-05-06T02:34:10","date_gmt":"2026-05-06T02:34:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/652374\/"},"modified":"2026-05-06T02:34:10","modified_gmt":"2026-05-06T02:34:10","slug":"ai-costs-are-coming-to-consumers-ai-artificial-intelligence","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/652374\/","title":{"rendered":"AI costs are coming to consumers | AI (artificial intelligence)"},"content":{"rendered":"

Hello, and welcome to TechScape. I\u2019m your host, Blake Montgomery, US tech editor at the Guardian. Today, we examine how a slew of tech earnings predict an expensive future for everyday electronics buyers and two big developments in the UK tech world: workers at Google DeepMind<\/a>, headquartered in London, petitioned to unionize to stop their employer\u2019s military work. And UK police are increasingly adopting live facial recognition, with considerable consequences.<\/p>\n

How the AI boom will force you to spend more money<\/p>\n

Last week, a slew of tech heavyweights reported their quarterly financial results. The earnings demonstrated that the dominant financial trend of the AI boom isn\u2019t stopping: spend, spend, spend. It\u2019s what the tech giants are doing, and you\u2019ll probably be doing it soon, too. Colossal demand for computer memory is driving up costs for electronics, from vast arrays in datacenters to the smartphone you\u2019re using to read this email. Chip makers are raking in profits, and judging by ominous predictions from executives, consumers will pay higher prices very soon.<\/p>\n

Google, Microsoft<\/a>, Amazon and Meta all disclosed their earnings on the same day, beating Wall Street\u2019s expectations on most topline metrics. Three of those \u2013 Google, Microsoft and Meta \u2013 revised their projected capital expenditures upwards by tens of billions, indicating to investors that their spending on physical assets like property, buildings and equipment \u2013 datacenters, essentially \u2013 will rise significantly in the coming fiscal year. Amazon\u2019s spending, about $200bn projected this year, could hardly go any higher.<\/p>\n

When investors heard the news from Google<\/a> and Microsoft, they were thrilled. Both companies reported double-digit growth in cloud revenue. Meta, not being in the business of cloud computing, took a beating in its stock price after noting rising spending on AI infrastructure. Even though the company\u2019s advertising business has grown with the adoption of AI and its overall revenue topped expectations, investors seem to see a clearer through-line from AI infrastructure investment to cloud computing than to ads.<\/p>\n

The soaring cost of computer memory is one of the main reasons why tech giants\u2019 spending is increasing. Both Microsoft and Meta<\/a> said that the rising prices of memory chips, driven by demand and constrained supply, is having a significant impact on their spending. Microsoft\u2019s finance chief said the company will spend $25bn more than it anticipated on computer components because of increasing prices.<\/p>\n

Consumers will not be so enamored with tech giants\u2019 spending as Wall Street. The next device you buy will probably be more expensive. Three more companies\u2019 earnings reports can tell us why.<\/p>\n

Apple\u2019s CEO, Tim Cook, speaks on stage during an announcement of new products at Apple Park in Cupertino, California, on 9 September 2025. Photograph: Godofredo A V\u00e1squez\/AP<\/p>\n

When Apple<\/a> reported its earnings last week, they were stellar. Everyone, especially everyone in China, is buying an iPhone. Apple is not spending even a quarter as much as the other tech giants on AI, but that may be about to change. Apple needs memory chips as much as the other tech giants, not for datacenters but for its phones, tablets, watches and laptops.<\/p>\n

Tim Cook spelled things out plainly: \u201cWe believe memory costs will drive an increasing impact on our business.\u201d He\u2019s not alone: personal computer makers such as Lenovo, Dell, and HP warned of 15% to 20% price hikes back in January. There is a world where Apple eats the higher component costs to retain consumer demand. It did with Donald Trump\u2019s tariffs, which caused electronic component prices to rise. It seems more likely, though, that Apple will pass these higher prices to consumers, as Trump\u2019s ire poses significantly more regulatory risk than consumers\u2019 grumbling about an extra $100 for a laptop.<\/p>\n

Memory chip makers are cashing in on the increased spending. Samsung, the world\u2019s biggest memory chip maker by sales, reported record quarterly profits last week, driven by a 49-fold jump in chip income, saying it expects a severe supply shortage to deepen next year as its buyers spend on AI, driving up prices of its memory chips.<\/p>\n

\u201cOur supply falls far short of customer demand,\u201d said Kim Jaejune, a Samsung memory chip business executive. \u201cBased solely on the demand currently received for 2027, the supply-to-demand gap for 2027 is set to widen even further than in 2026.\u201d<\/p>\n

Datacenters are slated to take about 70% of memory chips produced in 2026, according to an analysis by the International Data Corporation<\/a>. SK Hynix, Samsung\u2019s main competitor in memory chips, reported earnings the same week. The company tripled its revenue and quintupled its operating profit from the same period the year before.<\/p>\n

Texas Instruments (TI), a semiconductor company headquartered in Dallas, Texas, likewise reported its best earnings in decades a week before Apple and Samsung, with 90% growth in revenue from datacenters. Americans know the company best as the maker of expensive calculators students are mandated to buy, but the company also makes chips for smart devices, circuits for power management and battery packs, to name a few. The company implemented price hikes ranging from 15% to 85% at the start of April in response to increased demand. The company is shifting its focus to its higher-demand, higher-margin datacenter business, leaving fewer components for consumer devices.<\/p>\n

Facial recognition in the UKAI and war and backlashPete Hegseth testifies during a Senate hearing on 30 April. Photograph: Anadolu\/Getty Images<\/p>\n

Last week, the Pentagon inked a deal with seven AI companies for classified military work.<\/p>\n

The US defense department announced that SpaceX, OpenAI<\/a>, Google, Nvidia, Reflection, Microsoft and Amazon Web Services will be integrated into what it called the Pentagon\u2019s \u201cImpact Levels 6 and 7\u201d network environments to \u201cstreamline data synthesis, elevate situational understanding and augment warfighter decision-making in complex operational environments\u201d, according to a statement.<\/p>\n

The companies agreed to the US military\u2019s deployment of their technology for \u201cany lawful use\u201d, according to the Pentagon. The startup Anthropic, which makes the popular Claude chatbot, had rejected including the lawful use standard in its contract with the defense department in a high-profile feud with the bureau last month.<\/p>\n

The US Department of Defense is budgeting tens of billions of dollars for numerous technology firms\u2019 cutting-edge programs related to intelligence, drone warfare, classified and unclassified information networks, and much more. It has requested $54bn for the development of autonomous weapons alone.<\/p>\n

Days later, workers at Google DeepMind, the heart of Alphabet\u2019s cutting-edge AI research, pushed back on their employer\u2019s work with the US military. Workers developing Google\u2019s artificial intelligence products in the UK requested management to recognize their union, with some staff saying they supported the push in part out of concern with the Pentagon deal. Hundreds of US workers signed a letter opposing the company collaboration as well. Google employs about 187,000 people as of 2022.<\/p>\n

My colleague Alice Speri reports:<\/p>\n

double quotation markIn a letter sent to management on Tuesday and shared exclusively with the Guardian, workers at Google DeepMind requested recognition of the Communication Workers Union and Unite the Union as joint representatives of the lab\u2019s UK-based staff.<\/p>\n

The GoogleMind UK workers had voted to unionize in April. One of the workers told the Guardian they were particularly motivated\/driven by reports that Google was close to reaching a deal with the defense department and pointed to the US\u2019s \u2018capricious Iran war\u2019 and the Trump administration\u2019s feud with Anthropic as indications that the department is \u2018not a responsible partner\u2019. The deal was ultimately announced on Friday.<\/p>\n

\u2018I have joined the union due to concerns about AI being used to empower authoritarianism, whether through military or surveillance applications, both foreign and domestic,\u2019 one worker said, requesting anonymity because of fear of retaliation. \u2018By unionising, we are taking the traditional route for workers to organise and have a say.\u2019<\/p>\n

The wider TechScape<\/p>\n

Families sue OpenAI over failure to report Canada mass shooter\u2019s behavior on ChatGPT<\/a><\/p>\n

Vine video-sharing app is back \u2013 and battling AI slop<\/a><\/p>\n

GameStop makes $55.5bn takeover offer for eBay<\/a><\/p>\n

Fashion\u2019s Faustian pact: the high cost of Jeff Bezos\u2019s Met Gala patronage<\/a><\/p>\n

Will human minds still be special in an age of AI?<\/a><\/p>\n

Meta threatens to shut down social networks in New Mexico over child safety court case<\/a><\/p>\n

Judge cuts off Musk\u2019s AI doomsday talk as his testimony ends in OpenAI case<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Hello, and welcome to TechScape. I\u2019m your host, Blake Montgomery, US tech editor at the Guardian. Today, we…\n","protected":false},"author":2,"featured_media":652375,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":["post-652374","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-au","tag-australia","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/652374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=652374"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/652374\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/652375"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=652374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=652374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=652374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}