RAM Just Rewrote Your Hardware Budget

The Situation

Unless you’ve been living under a rock for the past couple of years, you would be hard pressed to have missed the incredible and rapid rise of Artificial Intelligence around the world, turning up in everything from your fridge to your car. While the quality of responses and reasoning from these AI models has undoubtedly gotten far better, the primary reason for this improvement has been the unprecedented spending on some major hardware components that appear in almost any device sold today, namely RAM, SSDs, and GPUs.

These three major components that are central to the abilities of AI have become a hot commodity in world markets. As with any finite resource, supply and demand dictate pricing and with AI datacentres now consuming approximately 70 per cent of the world’s supply, up from 32 per cent in 2020 and 50 per cent in 2025, pricing has risen rapidly. This has had large flow on effects for all technology, but especially workstations and servers.

J.P. Morgan Global Research estimates DRAM prices will have risen more than 400 per cent between the start of 2024 and the end of 2026 with the bulk of the damage occurring at the end of 2025, but unlike during the pandemic, the cause is not a manufacturing shortage. AI data centre construction is absorbing a disproportionate share of global memory capacity, with hyperscalers locking in supply through long term agreements that in some cases run five years or more.

That leaves memory manufacturers with far less capacity to serve everyone else, which means us.

It is now showing up in what you pay

While memory suppliers continue to build substantial additional manufacturing facilities to meet the new demand, even that is not enough to quell the AI beast as even future capacity is already purchased and allocated, driven by the current race between world superpowers to win AI supremacy.

This is not a forecast. J.P. Morgan notes the consumer price index for software and accessories and the producer price index for storage devices have both risen 23 per cent since the end of 2024, with the import price index for computers, peripherals and parts up 37 per cent. Analysts covering the sector expect the shortage to persist for multiple years rather than months.

Whatever your device refresh plan looked like previously, the goal posts have moved dramatically and barring a monumental event, are not returning to what they looked like previously any time soon.

You cannot solve it by buying less memory

The obvious move is to specify machines with less RAM however the floor has moved in the opposite direction at exactly the wrong moment, especially for business laptops and desktops.

Microsoft’s Copilot+ PC specification requires a minimum of 16GB of RAM and 256GB of storage. Even outside that certification, the practical baseline for a business machine running Teams, a browser with multiple tabs, an AI assistant and a line of business application is no longer 8GB. It has not been for a while and as IDC puts it, just as the industry needs to add more RAM, it has become prohibitively expensive to do so. The vendors are not absorbing it and you can see the pass-through in the numbers.

In its third quarter results published on 26 August 2026, HP reported Personal Systems revenue up 18 per cent year on year while total units were down 16 per cent. In commercial terms specifically, revenue rose 22 per cent on units down 14 per cent. Fewer machines, but considerably more revenue. HP’s own risk disclosures name increasing memory and storage costs, supply constraints and component shortages among the factors affecting its business, and its CFO described navigating “a challenging cost environment”. This has shown up in quote validity periods for hardware being slashed from the usual 30 days down to sometimes a mere 72 hours.

It is also not just one vendor. IDC reported in December 2025 that all the major OEMs (Original Equipment Manufacturers) such as Lenovo, Dell, HP, Acer and ASUS had warned clients of tougher conditions ahead, confirming increases of 15 to 20 per cent and contract resets as an industry wide response. These numbers are all on the supply side and by the time the change reaches a business wishing to purchase, they are often many times higher again, with servers being disproportionately affected due to the amount of RAM typically installed in them to run multiple workloads.

RAM alone now typically comprises a whopping 50 per cent or more of the total cost of a server, up from a mere 10 per cent 12 months earlier.

Where the real risk creeps in

When budgets are tight and prices are up, cheap hardware starts looking sensible. Unbranded devices, grey market stock, marketplace listings well under the going rate. This is where it stops being a budget conversation and becomes a security one.

In June 2025 the FBI issued a public service announcement warning about the BADBOX 2.0 botnet, which compromises internet connected devices including TV streaming boxes, digital projectors, aftermarket vehicle infotainment systems and digital picture frames. The mechanism is the part worth reading twice. The FBI states that criminals gain access “by either configuring the product with malicious software prior to the users purchase” or “infecting the device during setup”. Most of the infected devices were manufactured in China.

Machines arriving with malware already on board is not hypothetical. It is a documented, federally reported supply chain technique.

To be precise about scope, the devices named in that alert are consumer IoT products rather than business laptops. But the same channels sell cheap unbranded kit into small businesses every day, and the principle carries: if you do not know who assembled a device and who touched its firmware, you cannot vouch for what is on it.

The Australian Signals Directorate makes the same point in its cyber supply chain guidance, which asks organisations to consider the risks attached to suppliers, manufacturers, distributors and retailers, not just the product itself. Grey market hardware often carries no valid warranty, no manufacturer support path, and no firmware update entitlement. A device that cannot be patched is a liability regardless of what it costs and dramatically increases the risk of exposure to cybercrime.

What to do about it

Lift the hardware line in your budget deliberately rather than discovering the gap at purchase order stage. A flat budget is now a real terms cut.

• Specify 16GB as your minimum and treat it as a floor, not a target.
• Buy through authorised channels and keep the paperwork. If a price looks impossible, there is usually a reason.
• Extend device lifecycles on purpose, with security support and warranty status checked, rather than by accident.
• Standardise your fleet. Fewer models means fewer firmware baselines to track and a much easier patching story.

How Diamond IT can help

We can help you plan and budget for hardware in a market that has changed, including what to specify, when to refresh, and where to buy it from so you are not carrying unnecessary risk. We can also assist you in evaluating where to invest your valuable IT budget so as to ensure it meets your business needs in the most efficient and cost effective manner available, whether that be on-premises, cloud, or a hybrid of both.

If you would like to talk through what your refresh should look like in this market, get in touch with our team on 1300 307 907, send an email to enquiries@diamondit.com.au or fill out the form below.