AI explosion is stealing chips, making cars more expensive, GM says

Every time someone asks ChatGPT for a recipe or triggers Gemini to write a text, the demand for artificial intelligence grows a little. Multiply that by billions of people and the result appears in an unexpected place: the price of your next car.

The reason is the skyrocketing cost of memory chips. DRAM components, responsible for temporary data storage, today cost six times more than they did a year ago. And automobiles are increasingly relying on them, as everything from advanced driving assistants to basic dashboard functions uses the same kind of silicon.

GM already designs more expensive cars

In an interview with Nikkei Asia, GM Chief Financial Officer Paul Jacobson said the automaker expects a $1.5 billion to $2 billion increase in input costs this year. He did not detail how much of that comes specifically from chips, and the figure does not include import tariffs. According to the executive, the tightening should worsen in the second half of the year.

The consultancy AlixPartners estimates that the automotive industry consumes about 10% of all DRAM produced in the world. AI already accounts for 32%, the largest single share, ahead of smartphones, computers and any other category. This rate is projected to reach 48% by 2028 — and when data centers and AI are swallowing up half of global production, all the rest, automakers included, will foot the bill.

In addition to rising prices, there is also shortages: chipmakers cannot keep up with the pace of demand.

What automakers are doing

According to Nikkei Asia, the scenario forces manufacturers to anticipate. GM and Ford, as well as seven major auto parts suppliers, including Denso and Asemo, recently signed long-term supply agreements with Micron. Automakers are also trying to secure DRAM stockpiles ahead of shortages expected next year.

GM has already revised its price forecast for North America: it now projects an average increase of 0.3% in the value of new vehicles this year, instead of the stability or slight drop of 0.3% that it had previously expected. The automaker itself named the phenomenon “chipflation” — the inflation of chips.

Those who feel the blow the most are the Chinese manufacturers, since the country’s advanced electrified vehicles use more chips than most Western alternatives. Huayuan Securities calculated that the cost of memory in cars produced in China exceeded $70 per unit in November 2025, compared to about $30 for Japanese models. Some Chinese brands have already begun to pass on this cost, raising the price of optional driving assistance packages.