TNB Tech Minute: Apple Plans Price Hikes Due to Soaring Chip Costs

**SPEAKER_1** (0:00)
Many companies are struggling to scale their AI deployments or even move them past the pilot stage. Often the problem isn't technology, but organizational misalignment around goals, processes and incentives. At the break, join Caroline Roach, a senior partner, IBM Consulting, to learn why.

**Imani Moise** (0:16)
Here's your morning TNB Tech Minute for Thursday, June 18th. I'm Imani Moise for The Wall Street Journal.
We exclusively report that Apple plans to raise device prices because of soaring costs for memory and storage chips. CEO Tim Cook told us that skyrocketing demand from AI companies has quadrupled the cost of chips, making consumer price hikes unavoidable.
Analysts estimate that Apple would need to add about $270 to the price of the next iPhone Pro model in order to keep its profit margin steady. Morgan Stanley estimates smartphone and computer prices across the US will increase by 15% this year. Intel stock got a boost this morning after President Trump said in a True Social Post that Apple has agreed to work with Intel to design and build chips in the US. Spokespeople for Intel and Apple didn't respond to a request for comment. Since the federal government announced a 10% stake in Intel last August, the company shares have surged fourfold. Over the past year, Commerce Secretary Howard Lutnick has met with leaders at Apple, SpaceX, and NVIDIA to try and convince them to go into business with Intel. With the Apple deal, Intel has now signed partnerships with all three.
And in another exclusive, we report that Baseten, an AI infrastructure startup, is raising $1.5 billion to meet demand for cheaper alternatives to AI models from companies like OpenAI and Anthropic. Baseten says some investors are putting in money at an $11 billion valuation and others at $13 billion. The company helps businesses run open-source AI models by providing the computing power and software needed to deploy them at scale. And that's your TNB Tech Minute. We'll be back this afternoon with more.

**SPEAKER_1** (1:55)
Scaling AI successfully requires more than the right technology. Here again is Caroline Roach, senior partner, IBM Consulting.

**Caroline Roach** (2:01)
The biggest thing that we were talking about a year ago is what model to use. And the biggest thing that I'm talking about with my clients now is how do I drive change within my organization.

**SPEAKER_1** (2:13)
Companies able to identify correct and then avoid misalignment will be best positioned to deliver meaningful business value from AI.

**Caroline Roach** (2:19)
The organizations that are the most successful set very clear targets and have several priorities that are very clear across the enterprise. The technology is really good, but if you're not changing your organizational alignment, not incentivizing your people correctly, not looking at workflows, you're not going to see real value with it.

**SPEAKER_1** (2:40)
Visit ibm.com/think/leadership to learn how building organizational alignment can help deliver AI deployments that scale and drive growth.

**SPEAKER_4** (2:49)
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