Why are new computers so expensive?

If you’re looking to upgrade your PC or laptop you’re in for a shock. New computers are expensive. Not just a little bit expensive. Scarily expensive.

Say you wanted a bog standard desktop PC for your home, college or office. Nothing fancy but enough to keep you going for a few years.

In August 2025 you’d go onto Amazon or some other marketplace and pick up something like this for £500. Probably about what you’d expect.

But that exact same computer, from the same supplier, today in August 2026 is priced at £920. That’s an 84% price jump with no change in the PC specification. I always thought that as tech got older its price came down to make way for the new stuff.

So what’s happening?

To get a better picture let’s look at the components that make up a PC.

Ignoring the smaller bits such as case and keyboard, you need :

• A CPU or processor
• RAM
• Motherboard
• SSD
• Graphics card

So let’s jump back to August 2025 and price up a mid range gaming PC.

We’ll have an i5-14600K CPU at £190, 64GB of DDR5 RAM at £165, an MSI motherboard at £180, an MSI graphics card for £500 and a 2TB NVMe SSD for £130. All in this comes to around £1165 plus case, PSU etc.

Back to today and the exact same PC.

Our CPU, motherboard and graphics card have all increased a bit.

So far nothing too dramatic.

But look at our SSD. It is now £294 reduced from £502. That’s over double the price.

But the star of the show is our RAM. Up to £690. That’s over 3 times the price in just one year.

Why the Big Prices?

So why have some components jumped so much in price?

You’ve probably heard about the RAM crisis due to the big AI boom. AI companies are buying all the RAM they can get their hands on, and at whatever price they have to pay. The power of AI is now directly linked to how big your data centres are. More computing power equals more powerful AI. Better AI can build even better AI. Winning the AI race has almost come down to who can build the biggest computer the fastest.

Around the world only a handful of companies manufacture the advanced memory chips used across PCs, AI hardware and storage devices. Production levels are limited by what they can get through their fabrication plants. Naturally they are prioritising for the people willing to pay the most with estimates of 70% of production being used for datacentre memory. That does still leave some RAM for us. There’s no problem getting hold of RAM, but why would they sell it cheaper to the general public when demand is so high.

Will this get better soon?

You could argue that all we have to do is make more RAM. Either existing companies can build more, or new players could come into this lucrative market. But new fabrication plants take 3 to 5 years to build and cost of over $15 billion. That’s a big investment to make on the gamble that there will be as high demand for RAM in 5 years time. This risk is currently not one they are willing to make probably due to the uncertainty whether this AI boom will keep going.

At the moment AI companies are borrowing money hand over fist. The borrowing and subsequent spending is massively bigger than the amount of money they actually make. I mean massively bigger.

In normal business you need to invest some money from sales in the growth of your company. But AI companies are currently spending $16 for every $1 they make. You don’t have to be a financial expert to work out that this business model can’t carry on forever.

The big fear in the AI world is that this spending will simply crush the AI companies. You’ve probably heard about the AI bubble and its parallel with the DotCom bubble. The two are quite different but the overall effect could be the same.

If you borrow money you eventually have to pay it back as my mortgage people keep reminding me. The AI giants are using imaginative ways to hide their debt but you can never get away from the fact it’s not your money you just spent. If sales don’t increase fast enough to cover debt repayment demands the current system will collapse. AI companies probably won’t disappear but they will have to drastically cut back on spending.

So I guess there are two possible futures.

AI usage suddenly increases and starts to generate massive incomes for the AI giants. They continue to expand and the rest of us can never afford to buy another new computer.

Or the AI bubble bursts, AI development slows to a sensible pace and we get back to somewhere near normal PC prices.

Conclusion

So if you’ve been thinking PC prices are far too expensive, you’re right. The AI boom is changing the entire computer industry in more ways than I’ve talked about here. As long as AI companies keep up this level of spending prices will stay high. It all depends on whether they can make enough money fast enough to cover the eventual reckoning.

What can you do?

One option is to bite the bullet and say goodbye to your hard earned cash.

The other is to look at what you’ve got and see if you can make do for another couple of years.

I’m currently making videos on how to keep your existing machines going with upgrades, switching to Linux and other options so please make sure to subscribe to the channel so you don’t miss those along with my other gaming, coding, electronics and making projects.