Nvidia AI server prices rise over 15%

Nvidia has notified some of its largest customers that prices for servers containing its AI chips will rise by more than 15% in many cases, according to a Bloomberg News report. The price hikes will take effect on systems shipped early next year and will impact systems featuring the flagship Vera Rubin and Grace Blackwell chips. The increases will vary depending on the chip generation and memory configuration. Contract manufacturers building servers for major data center operators such as Microsoft, Alphabet's Google, and Oracle have informed their customers of the upcoming increases. The price surge is driven by soaring memory chip costs, as Samsung Electronics, SK Hynix, and Micron Technology dominate global DRAM production and have gained greater pricing power amid surging AI infrastructure demand. Nvidia's AI accelerators rely heavily on high-performance memory, making memory supply and pricing critical to overall server costs. Nvidia, which has a gross margin of about 75%, continues to benefit from strong demand for its AI processors. The company has also raised prices for gaming-oriented graphics cards. Major customers like Amazon (company), Microsoft, Google, and Meta are developing proprietary AI chips to reduce reliance on Nvidia but still depend heavily on Nvidia hardware for ongoing data center expansion. Higher hardware costs could further complicate the global AI data center boom, which is already facing project delays, labor shortages, and tighter capital markets.