AI is driving US inflation higher: Consumer prices for computer software and accessories surged +14.5% YoY in May, the biggest annual increase on record in data going back to 2000. Producer prices for electronic components soared +27% YoY, also the biggest increase on record. To put this into perspective, before 2026, prices for software and electronic components fell in almost every year since 2000. Memory prices alone have more than doubled, with DDR5 and DDR4 RAM prices up +290% YoY, as AI data centers absorb the vast majority of global chip supply. RAM price shocks are will likely keep inflation elevated well into 2027, adding to existing pressures from the Iran War. The AI boom is fueling technology inflation.(The Kobeissi Letter)