Global Economics Comment: AI Inflation: A Large Mismeasured Boost in the US, Limited Impact Elsewhere

Research evidence excerpt

Global Economics Comment: AI Inflation: A Large Mismeasured Boost in the US, Limited Impact Elsewhere

Goldman Sachs Global Economics Comment

Global Economics Comment, we estimate these impulses for other DMs and find much

smaller effects on core inflation elsewhere.

First, memory prices have surged globally due to outsized demand from data centers,

with prices for some types of memory up more than tenfold since the start of 2025. In

the US, we expect the software and accessories price index (which is exposed to

memory prices) to grow by a peak of about 30% year-over-year in November—

reflecting our equity strategists’ view that the bulk of memory price increases are now

behind us—adding 36bp to year-over-year core PCE inflation.

Although memory price increases are global—Exhibit 1 (left) shows that prices have

climbed across DMs in CPI categories that are directly exposed to memory—the impact

of higher memory prices in other countries will be much smaller given significantly lower

inflation weights than in US PCE, which our US team has previously documented likely

reflects measurement biases that overstate the memory weight in core PCE.1 We

estimate the peak impact on core inflation from directly-exposed categories will range

from 1 to 9bp and average around 5bp in non-US DMs (Exhibit 1, right).

Exhibit 1: Memory Costs Have Surged, Directly Boosting Inflation (Especially in Mismeasured US PCE)

Source: Haver Analytics, Goldman Sachs Global Investment Research

There will also be broader spillovers from memory to other global electronics prices.

Exhibit 2 (left) documents some of the price increases that have recently been

announced by major manufacturers of smartphones, PCs, and gaming consoles in

response to the sharp rise in memory costs.