AI is driving up consumer prices. That won't stop anytime soon.
Surging AI investment is pushing up the cost of smartphones and other gadgets, according to analysts. Here's why.
August 13, 2026 / 5:49 PM EDT / CBS News
The torrent of corporate spending on artificial intelligence in the U.S. is driving up consumer prices , working against efforts to cool inflation.
AI requires enormous computing power, driving demand for the semiconductors that enable it. Rising chip costs are also prompting electronics manufacturers to raise prices on smartphones, computers, software and other tech accessories.
Consumers are sensitive to cost changes for the devices they use daily, so they notice when prices climb, experts said.
"Consumers track prices for things like phones," Eric Johnson, a professor at the Columbia Business School in New York who focuses on AI and consumer behavior, told CBS News. "The old line is that the price of milk influences what you think the cost of living is. Phones are the new milk."
This week's Consumer Price Index , which tracks changes in the price of a typical basket of goods and services over time, showed that inflation in July rose at a 3.4% annual pace, in line with economists' expectations . Core goods, which exclude volatile food and energy prices, increased 0.2% from the previous month.