AI is Making Life More Expensive

When new AI data centers are built, companies often promise new jobs and tax revenue, but those promises are typically short-lived. After a data center’s initial construction, they don’t need to employ many people to keep it running. Instead, communities are paying the price, and the cost spike is rippling out across the economy.

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The sheer scale of AI investment is big enough to lift inflation across the board — and that’s exactly what’s happening. 

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While AI is a small contributor to inflation (~0.2%), there are no signs of slowing, so this percentage is expected to rise. There are some spending categories in particular where we’re seeing AI’s impact driving prices up faster and more quickly. 

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AI is making electricity more expensive

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Hyperscale data centers span thousands of acres and use as much energy as a small city or at least 100k households. And their energy use is expected to nearly double from last year to 2028. 

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While tech giants are profiting off these data centers, they aren't footing the full power bill. While energy prices are rising for many of us, folks living in areas with a high concentration of data centers saw their power bills go up 267% over the past 5 years. 

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Prices go up for residents for a couple of reasons. The first reason is that demand goes up. Data centers’ high energy consumption drives up demand and, therefore, prices across the region. 

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The other reason prices are going up for residents is that when a data center comes to town, it requires major updates to energy infrastructure like transmission lines and power plants. And the costs of those infrastructure updates are distributed to all the energy companies' customers. 

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In Northern Virginia, home to “Data Center Alley,” nearly three-quarters of voters blame data centers for the rise in their electricity costs. Some cities are facing the prospect of losing power altogether. In Lake Tahoe, the local utility told customers that it’s going to cut off power to homes after May of 2027 to meet the demand of data centers. 

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AI is making tech more expensive

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Data centers’ appetites demand more than just electricity — they also need memory. Memory chips are a crucial part of data centers’ operations, and demand has constrained supply. As a result, chip costs have skyrocketed 26% this year. 

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Even if you’re not buying hard drives and memory chips, manufacturers need them to build your phones, laptops, and other tech. 

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So when chip costs go up, so does the cost of those devices. Apple hiked the prices for some of its most popular products by roughly 20%. Sony and Microsoft have also increased the price of the PlayStation and Xbox consoles by around 25%. 

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How to Navigate the Wild West of AI

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Our world moves fast and it can feel like we’re too far gone with data centers, but that’s not the case. Communities are pushing back every month, keeping data centers from being built and forcing accountability and transparency on future and current builds. 

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We talk about how to push back on data centers on this episode of Second Nature, The Data Center Next Door. Find out the real-life effects of AI infrastructure and hear how it's affecting folks in our community. 

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We get the stats on this booming industry and what's at stake. We hear from Abre' Conner, the civil rights attorney leading the NAACP's lawsuit against Elon Musk's xAI — a data center that's now running 59 methane gas turbines in a Mississippi community, breaking a law that's been on the books since the 1970s.

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And we ask the uncomfortable question: Could all this energy hunger actually accelerate the renewable transition? Is the AI revolution happening to us or for us? And what can we do about it?