NextFin News - AMD and Nvidia, two leading GPU manufacturers, have announced plans to significantly increase the prices of their graphics processing units starting in early 2026. This development was reported on January 5, 2026, by TechNave and corroborated by TrendForce, highlighting that flagship GPUs such as Nvidia's GeForce RTX 5090, which launched at approximately USD 1,999 (~RM8,100), could see prices soar to as high as USD 5,000 (~RM21,250). The price hikes are expected to affect the Nvidia GeForce RTX 50 series and AMD Radeon RX 9000 series, both already positioned in the premium segment.
The primary driver behind this price escalation is the explosive demand for artificial intelligence (AI) technologies, which require exponentially greater computational power. Nvidia's CEO has indicated that next-generation AI models may demand up to 100 times more processing power than previous iterations. This surge in AI workloads has led to a dramatic increase in demand for high-performance GPUs, which are critical for training and running AI models.
Compounding the issue is a severe supply crunch in memory components, particularly GDDR6, GDDR7, and HBM3E memory types used in GPUs. According to industry sources cited by TrendForce, memory costs now account for over 80% of the total bill of materials (BOM) for GPUs, with prices having increased several hundred percent in recent months. This has forced AMD and Nvidia to adjust their pricing strategies to maintain profitability amid rising input costs.
Moreover, Nvidia is reportedly considering a 30% to 40% production cut for midrange GPUs such as the RTX 5070 and RTX 5060 Ti, further tightening supply and potentially driving prices higher. Add-in-board partners like ASUS and MSI have already raised prices on custom RTX 5090 cards to between USD 3,000 and USD 3,500, reflecting the upstream cost pressures.
This price adjustment also extends to Nvidia's AI-focused GPUs, such as the H200 series, which currently retail between USD 30,000 and USD 40,000. The increased cost of HBM3E memory stacks, which have risen by approximately 20%, is expected to push these prices even higher in 2026.
The implications of these developments are multifaceted. For consumers and gamers, the steep price increases may limit access to cutting-edge GPU technology, potentially slowing adoption rates in the short term. For AI researchers and enterprises, the higher costs could increase the capital expenditure required for AI infrastructure, possibly impacting project budgets and timelines.
From an industry perspective, the memory supply bottleneck highlights vulnerabilities in the semiconductor supply chain, emphasizing the need for expanded production capacity and diversification of suppliers. The pricing trends also underscore the growing importance of GPUs as foundational hardware for AI workloads, shifting the market dynamics from traditional gaming-focused demand to enterprise and data center-driven growth.
Looking ahead, the GPU market is likely to experience continued volatility in pricing and supply throughout 2026. Manufacturers may pursue further price adjustments as memory prices fluctuate and AI demand evolves. Additionally, the high cost of flagship GPUs could stimulate interest in alternative architectures or specialized AI accelerators that offer cost-effective performance.
In conclusion, the planned GPU price hikes by AMD and Nvidia reflect a confluence of surging AI-driven demand and escalating memory costs, reshaping the economics of GPU production and consumption. Stakeholders across the technology ecosystem will need to navigate these changes carefully, balancing innovation ambitions with cost constraints in an increasingly AI-centric computing landscape.
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