The PC Market Prepares for an AI Revolution

The personal computer has shown remarkable durability over the last 15 years. Despite Apple’s claims of a “post-PC” era with the iPad in 2010, the PC market has remained strong. Even as smartphones surpassed laptops in internet connectivity a decade ago, millions continue to purchase PCs annually. However, this resilience is about to face new challenges this year.

Recent months have seen a spike in RAM and NAND/SSD prices due to shortages driven by the demand from AI data centers. Some retailers are treating memory like a luxury item, leading to increased costs for prebuilt PCs, with some manufacturers even offering systems without RAM.

Now, we’re about to witness the impact of this shortage on mainstream laptops and PCs from brands like Lenovo, Dell, HP, Asus, and Acer. TrendForce forecasts that memory prices are expected to “rise sharply again in the first quarter of 2026.” This could further strain laptop and PC pricing, and early indicators suggest that manufacturers are already adjusting prices at CES this week.

Asus has informed its partners of impending price increases across its product lineup due to the current memory market conditions. Dell also modified the launch prices of its XPS 14 and XPS 16 just hours before their announcement, signaling that laptop pricing is becoming increasingly volatile. Lenovo is stockpiling PC memory to navigate the challenges throughout 2026, while HP has indicated it will need to raise prices and offer lower RAM configurations later this year. Like Lenovo, HP has a memory reserve but anticipates that rising costs will start to erode PC product margins by May.

There’s no quick solution for PC manufacturers. Reducing RAM in laptops will be a tough sell, especially below the 8GB mark. Windows 11 requires a minimum of 4GB, but performance suffers significantly under those conditions. While TrendForce suggests some smartphones may revert to 4GB this year, “for budget notebooks, DRAM cannot be reduced quickly due to processor pairing needs and operating system limitations.”

The timing of this memory shortage is particularly challenging for Microsoft and its PC partners. With Windows 10 reaching its end of life in October, many businesses are transitioning to Windows 11, often necessitating a PC refresh cycle. There were strong signs throughout 2025 that PC shipments were picking up due to this refresh, but that momentum could falter later this year as RAM supplies dwindle.

Moreover, the issue isn’t just timing; the rising prices of RAM and SSDs may become a permanent fixture rather than a temporary supply issue. “This is not just a cyclical shortage driven by a mismatch in supply and demand, but a potentially permanent, strategic reallocation of the world’s silicon wafer capacity,” warns IDC. “For decades, the production of DRAM and NAND Flash for smartphones and PCs was the primary driver for production. Today, that dynamic has inverted.”

The demand from major tech companies like Microsoft, Google, Meta, and Amazon has led manufacturers like Samsung, SK Hynix, and Micron to shift focus toward high-bandwidth (HBM) and high-capacity DDR5 memory. “Every wafer allocated to an HBM stack for an Nvidia GPU is a wafer denied to the LPDDR5X module of a mid-range smartphone or the SSD of a consumer laptop,” IDC explains.

This situation will significantly affect the DIY market and PC gaming. “PC gaming is thriving at a time when overall consumer PC shipments have declined by 14 percent in the last five years… annual gaming PC shipments are up 50 percent,” noted Henry Lin, director of product management at Nvidia, in a recent briefing.

The surge in PC gaming has enabled smaller builders to offer custom prebuilt systems at competitive prices. However, these smaller assemblers lack the ability to stockpile RAM or SSDs and “will bear the greatest burden of the shortage,” IDC warns. This scenario presents an opportunity for larger OEMs to capture market share from smaller builders by promoting prebuilt systems as offering greater value.

Memory demand is also likely to influence GPU prices. There are rumors that Nvidia may require GPU partners to adjust pricing to account for increased memory costs. “The demand for memory in the market is at record levels, and this does mean supply will be tight,” admitted Ben Berraondo, director of global PR for Nvidia GeForce, in a recent briefing. “There have been no major changes in how we manage memory with our customers. There are no major supply chain changes to GeForce,” Berraondo stated.

Despite no significant changes to GeForce memory management, prices are already on the rise. Newegg has begun listing various RTX 5090 cards at prices exceeding $4,000, making it increasingly difficult to find one for under $3,000, especially after they were close to the $1,999 retail price in September.

Berraondo didn’t directly address the rumors of $5,000 pricing for the RTX 5090, but he did mention that Nvidia’s Founders Edition model is still listed at $1,999 at Best Buy. However, it’s frequently out of stock, making it unrepresentative of the actual retail pricing for the RTX 5090.

If the costs of building a gaming PC don’t stabilize in 2026, Microsoft may face increased pressure regarding its next-gen Xbox plans. The company is aggressively shifting towards PC for the future of Xbox consoles, with the handheld Xbox Ally devices being just the beginning. Rising component costs could push the price of the next-gen Xbox even higher, impacting Sony’s PS6 plans and Valve’s upcoming Steam Machine.

The memory shortage also poses a threat to Microsoft’s AI PC ambitions. Microsoft has set a surprising minimum of 16GB of RAM for its Copilot Plus PCs to support local small language models. Qualcomm has been working to bring Windows on Arm (Copilot Plus PCs) down to the $600 price range, but this effort may be hindered by memory costs.

It increasingly feels like we’re witnessing a pivotal moment for the future of the PC, where component prices and AI features are significantly influencing computing. If AI demand prevails, traditional computing tasks may increasingly shift to the cloud, prompting businesses to consider virtual machines instead of refreshing laptops and gamers to explore cloud streaming services rather than investing in expensive gaming PCs.

This doesn’t signal the end of the PC anytime soon. It seems more like another chapter in Big Tech’s journey toward an uncertain AI future. I believe the PC will endure, adapt, and reaffirm its importance in the tech landscape.