The prices of Nvidia AI servers are set to increase by over 15% starting early next year.

      Nvidia's major customers have been informed that the price of servers equipped with its AI chips will increase by over 15% in many instances starting early next year, primarily due to rising memory costs. The company is set to announce its quarterly earnings next week.

      Nvidia's largest clients have been advised on the implications of the memory shortage. Servers featuring its AI chips are expected to see price hikes exceeding 15%, particularly for systems scheduled for delivery from early next year.

      These price increases also affect the latest hardware. Systems utilizing the Vera Rubin and Grace Blackwell chips will experience price adjustments, with the extent of the increase varying based on the chip generation and memory configuration.

      The notifications were relayed through intermediaries. Firms that assemble servers under contract for companies like Microsoft, Google, and Oracle have communicated this information to their clients, while Nvidia did not respond to inquiries for comment.

      What makes this situation significant is the identity of those passing on the costs. Nvidia has a gross margin of roughly 75% and is the most valuable publicly traded company globally, yet it is not absorbing these additional expenses.

      The leverage lies with three companies: Samsung, SK Hynix, and Micron, which produce the majority of the world’s DRAM. Although their output is increasing, it has not yet met the demand from AI infrastructure.

      Consumers were the first to experience this issue. Both Apple and Qualcomm have indicated that rising component costs are increasing prices, Nvidia raised its gaming card prices this month, with AMD following suit shortly thereafter, while Amazon Web Services has already raised GPU prices by 20%.

      Europe's involvement involves both public and private funding. The EU has allocated around €20 billion for a series of AI gigafactories, and a French consortium has made a $10 billion bid for one site.

      These bids and budgets were based on hardware prices from last year. A 15% increase in the price of servers needed for such facilities represents a significant shift from plans that were formulated prior to the tightening of the memory market.

      Commercial operators in Europe are also entering the same market. Nebius is expanding its Nvidia capacity at its Finnish data center, amid shifting economic conditions.

      The expansion was already facing challenges. Project delays, labor shortages, stricter capital markets, and local opposition have complicated data center initiatives, and this adds costs to the entire process.

      Nvidia's quarterly earnings will be announced next week, at which point a crucial question will arise: not whether demand is sustained, but who will ultimately bear the cost of memory, as it currently seems to be everyone further down the supply chain.