The artificial intelligence boom is straining the very infrastructure meant to bring more people online.
A report released this week by the GSMA, the trade group representing the global mobile industry, warns that soaring costs for memory chips and other smartphone components — driven largely by demand for AI data centers — are making entry-level phones less affordable just as they were becoming attainable for the world’s poorest populations.
Memory prices more than doubled between the third quarter of 2025 and the first quarter of 2026, then rose another 80 to 90 percent in the second quarter of 2026, according to data from Counter Point Research cited in the report.
The timing is brutal. The same components that power AI’s growth are pulling the ladder up from under people trying to get online for the first time.
The Scale of Who’s Left Out
Roughly 4.8 billion people now use mobile internet on their own device. But growth is slowing sharply — only about 160 million people came online in 2025, down from 190 million the year before.
More striking: 3.1 billion people already live within reach of mobile broadband networks but still don’t use the internet. They’re covered. They just can’t afford a device. The GSMA calls this the “usage gap,” and it’s the group the AI transition threatens to leave behind entirely.
For the poorest fifth of people in low- and middle-income countries, an entry-level smartphone already costs 44 percent of their average monthly income. In Sub-Saharan Africa, that figure jumps to 76 percent — nearly three-quarters of a month’s earnings for the cheapest available device.
Why Chip Prices Are Spiking
The culprit isn’t a shortage tied to smartphones at all. It’s AI. Data centers building out capacity for AI workloads have driven demand for memory chips to levels that manufacturers weren’t planning around, and that demand is now competing directly with the low-margin components used in budget handsets.
The consequences are already visible. Smartphone shipments are forecast to post their steepest annual decline on record, driven by a collapse in the sub-$100 segment — the price band that matters most for first-time buyers in emerging markets.
Before this price spike, the GSMA estimated that pushing entry-level phones down to $30 could make them affordable to 1.6 billion more people, and $20 devices could reach 2.2 billion. Those targets, the group now says, are effectively out of reach.
A Cost Beyond Connectivity
The GSMA frames this as more than an access problem. It’s an economic one. The group has previously estimated that closing the mobile usage gap entirely would add $3.5 trillion to global GDP between 2023 and 2030, with more than 90 percent of that benefit landing in low- and middle-income countries.
As AI-powered services expand into healthcare, education and financial systems in those same countries, the report argues that a basic internet connection is becoming a prerequisite for participating in the economy at all — not a convenience.
Vivek Badrinath, the GSMA’s director general, put it directly: the risk isn’t a divide between countries, but between people who can afford to participate in the digital economy and those who cannot.
What the GSMA Is Asking For
The GSMA is calling on chip and memory manufacturers to prioritize supply for affordable handsets, and is urging governments, mobile operators and financial institutions to coordinate on solutions — including easing device reuse and revisiting import taxation on entry-level phones.
