Nvidia has reportedly told some of its largest customers that servers built around its AI chips are getting more expensive. 

Increases top 15% on systems shipping early next year, people cited by Bloomberg said. The size of each increase varies by chip generation and memory configuration. 

Why Memory Makers Now Set the Price

Bloomberg, citing people familiar with the process, reported that the increases cover systems using the flagship Vera Rubin and Grace Blackwell chips.

Server builders that assemble hardware for data center operators, including Microsoft, Alphabet’s Google, and Oracle, passed the notice along. 

Nvidia accelerators depend on how much dynamic random access memory (DRAM) is paired with them. Samsung, SK Hynix, and Micron produce most of the world’s supply.

Output has climbed, yet demand still runs ahead of it. This gap has pushed prices for the commodity-like components sharply higher and handed the three producers rare influence over the sector.

Micron chief executive Sanjay Mehrotra has described memory as the strategic infrastructure of the AI era.

“Today there is no AI without memory. AI systems need more memory. They need higher performance memory. They need lower power memory,” he said.

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Cost Pressure Builds Before Nvidia Earnings

Nvidia runs a 75% gross margin and charges tens of thousands of dollars per chip. Its decision to pass costs on rather than absorb them shows how tight the supply chain has become. Apple and Qualcomm have also raised product prices due to chip shortages. 

Amazon, Microsoft, Google, and Meta all run in-house chip programs. However, they still buy Nvidia hardware and still compete for the same memory supply.

The timing matters. Nvidia reports fiscal second-quarter results on Wednesday after a six-session losing streak, its longest since 2022, that left shares at $214.7 on Friday.

Investors will now weigh whether rising input costs read as a margin threat or as further proof of AI demand.

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Source: BeInCrypto