Prices for computer software and accessories surged 14.5% in May compared with the previous year, marking the highest increase on record for this category according to data in the Consumer Price Index report released Wednesday. Federal Reserve economists attribute the spike primarily to flash memory chip prices, which more than doubled over the past year due to massive data storage requirements for AI training in data centers. The May surge represents the latest in a series of increases since a 25-year deflationary trend for the category ended last November.
The CPI category includes software, mobile apps, video games, and media storage devices like flash drives, but excludes peripherals such as mice, keyboards, and webcams.
Federal Reserve Attributes Surge to Flash Memory Chip Prices
Federal Reserve economists published an analysis late last month identifying flash drives and other blank media as key contributors to the recent surge in the computer software and accessories CPI. The analysis states that global prices for flash memory chips found in flash drives more than doubled over the past year.
The Fed economists conducted searches on multiple e-commerce platforms and found that the average price for the 20 best-selling flash drives increased about 70% since November 2025. They noted little to no increase in flash drive prices in the year prior to November 2025.
According to the Fed analysis, the price rises are largely a byproduct of the data center investment boom, as massive data storage requirements for AI training are largely met by solid state drives (SSDs) containing flash memory.
Memory Stocks Record Strong Performance Over Past Year
Memory stocks including Sandisk, Micron, Seagate Technology, and Western Digital have been among the best-performing shares in the market over the last year. The companies' prices and profits are soaring, driven by the surge in flash memory demand from AI data centers.
FAQ
What caused computer software and accessories prices to jump 14.5% in May?
Federal Reserve economists attribute the May surge primarily to flash memory chip prices, which more than doubled over the past year. The price increases are largely a byproduct of the data center investment boom, as AI training requires massive data storage met by solid state drives containing flash memory.
How much have flash drive prices increased since November 2025?
Federal Reserve economists found that the average price for the 20 best-selling flash drives increased about 70% since November 2025, based on searches conducted on multiple e-commerce platforms. They noted little to no increase in flash drive prices in the year prior to November 2025.
