Cook's Farewell Warning: ‘Tidal wave coming once a century’

The huge investments in artificial intelligence are starting to be felt more and more clearly by consumers. Tim Cook warned shortly before his departure as Apple CEO that the costs of important computer components are running at an unprecedented rate.

Apple can no longer fully absorb this increase and is therefore raising prices. Elon Musk is also concerned about the development.

Cook stepped down as Apple's CEO on September 1 after fifteen years. He handed over the reins to John Ternus, who was responsible for the technology company's hardware for years. Cook will remain involved with Apple as executive chairman.

One of the biggest problems for Apple right now is the explosive demand for memory chips. Technology companies worldwide are building huge data centers for artificial intelligence and need large quantities of chips and other computer components to do so.

This demand puts pressure on the available production capacity and drives up prices. Cook described the situation as exceptional several weeks before his departure to The Wall Street Journal.

“This is a tidal wave that only occurs once every hundred years. I've never seen anything like it in more than forty years, in any field,” Cook said.

For a long time, Apple did not try to fully pass on the higher costs of memory and storage to customers. According to Cook, this can no longer be sustained.

“Unfortunately, price increases are inevitable,” he said during his last presentation of the quarterly figures as Apple's CEO.

The consequences are now visible. Apple has increased the prices of various Mac and iPad models. Other major technology companies, including Microsoft, Hewlett Packard, Dell and Nintendo, have also raised prices.

Elon Musk also warns of the unusual price increases. The Tesla and SpaceX CEO even called the current development “the biggest price increase of anything I've ever seen.”

Musk shared an article from The Wall Street Journal about the consequences of the global construction of AI data centers. It warns that the huge investments in artificial intelligence infrastructure could trigger a new wave of inflation.

This is not limited to computers. The strong demand for chips, electricity, storage capacity and other components can ultimately increase the costs of all kinds of products and services.

One of the cited figures shows how fast the movement is now going. Consumer prices for computer software and accessories were about fifteen percent higher than a year earlier.

The warnings from Cook and Musk show a downside of the billions invested in artificial intelligence. Large technology companies are rapidly trying to build up sufficient computing power to train their AI models and offer new services.

This not only requires advanced chips. Data centers use large amounts of memory, storage space, and electricity. When demand grows faster than supply, the prices of these parts increase.

For companies like Apple, this creates a difficult choice. They can cover part of the higher costs themselves, but when the price increases become too large, they eventually end up with consumers.

The higher prices of Macs, iPads and devices from other manufacturers show that this process has already begun. As a result, the AI boom, which is best known for enormous investments and rapid technological progress, can increasingly be felt in consumers' wallets.