Remember the pre-dawn chaos of Black Friday 2022, hunting for a Playstation 5? Or maybe you waited months for a new iPhone, only to see “out of stock” plastered across the screen. Feels like limits are the new normal, and now whispers suggest your next car might be next.
The culprit this time isn’t just economic instability but ravenous demand from a source you might not expect: artificial intelligence. AI’s insatiable appetite for processing power is straining global chip supplies, potentially hitting automakers hardest.
Carmakers Face The AI Squeeze
Data centers, the engines driving AI, are popping up everywhere. And they require staggering numbers of specialized chips—sucking resources from the supply chains that provide chips for appliances, phones, and even voice assistants. For automakers, this couldn’t come at a worse time.
Bloomberg reported this week that the auto industry’s growing dependence on high-end chips—not just for infotainment, but for advanced driver-assistance systems (ADAS), navigation, and the future promise of autonomous vehicles—makes them especially vulnerable.
Think of it like this: the global chip supply is a reservoir, and AI is a new, massive pipeline diverting water away from established users.
How Long Will The Chip Shortage Last?
According to S&P Global analysis, the AI data center boom could drive chip prices up by 70% to 100% over the next two years. At CES 2026, Samsung also warned that a chip shortage could impact prices across the electronics market, according to PYMNTS. Add in tariffs and rising material costs, and manufacturers are increasingly likely to pass those expenses on to you.
The Software-Defined Car Problem
New cars are expensive. This is a fact. They’re increasingly reliant on complex software and sensors for everything from ADAS to infotainment. In other words, they need more chips. But the more chips a car requires, the more vulnerable it becomes to supply chain disruptions and the more the final sticker price reflects those conditions.
What Are Car Companies Doing About The Chip Shortage?
Some automakers are already exploring ways to “decontent” new cars. In other words, remove features to keep prices down. Fiat CEO Olivier François told Autocar that he’d be open to limiting the speed of its small European cars to 117 km/h to avoid the need for expensive ADAS systems mandated by the EU—since those cars are primarily used for slow city driving.
This is a bit like a chef removing premium ingredients from a dish to keep the price the same. Is it still the dish you wanted?
Will Car Prices Go Down In 2024?
While some analysts predict a slight easing of inflationary pressure on new cars, the underlying chip shortage driven by AI demand suggests that prices are unlikely to plummet anytime soon. This means automakers will likely have to balance innovation with affordability, potentially leading to some tough decisions about which features to include—and which to leave out.
So, as AI permeates every aspect of our lives, are we prepared to accept a future where our cars are slower, less capable, and more expensive?