Jun 8, 2026
While attempting to buy an airline ticket during a stay in Botswana, Jay L. Zagorsky, an associate professor at Boston University’s Questrom School of Business, learned a first-hand lesson about AI-enabled customized pricing.
“The price on my computer was about $200,” Zagorsky wrote. “Unfortunately, before booking I was called away to dinner. After dinner my computer showed the cost was $1,000 — five times higher.”
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The reason? Post-dinner he’d connected via his university VPN, which “told the airline I was located in a rich American neighborhood. Before dinner I was located in a poor African town.” The algorithm adjusted accordingly.
While the ideal AI scenario involves artificial intelligence simplifying our lives and lowering the costs of goods and services, the reality is far more harsh — and expensive. At least for the time being, AI is boosting inflation as well as prices for goods and services across the board.
“We are going through this period of pain,” Barclays U.S. senior economist Pooja Sriram told the Washington Post recently, adding that the tradeoff for better tech is having “to grapple with slightly higher prices.”
The major ways AI is making life more expensive
The suggestion of grappling with “slightly higher prices,” however, downplays the reality of AI’s impact on American pocketbooks.
AI data centers, for example, are among the drivers of skyrocketing energy costs across the country. In a March 2026 year-over-year comparison, Americans paid 7.2% more per kilowatt-hour this year than last, while research suggests that data centers could increase electricity costs 29% by 2030 — with consumers in areas concentrated with data centers getting hit with a possible 57% rate rise.
Still, you may not have many electronics to power if the AI boom keeps upping the cost of memory chips. Morgan Stanley says memory chip prices “spiked six-fold in the past year” due to data center demand, with Reuters reporting that such demand could bump them another 63% this quarter. The scarcity-driven costs to electronics makers, meanwhile, are already being passed on to buyers of everything from video game consoles to smartphones and computers, which have seen anywhere from $50 to $500 price spikes.
“I think what most people have been surprised at is how this AI spending has really soaked up all the demand and created shortages,” Harvard Business School professor Willy Shih told CBC. “That takes some time to correct.”
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Even so, correcting overall price points could prove moot if AI is watching — and even controlling — what you pay. AI-powered surveillance pricing allows companies to use your personal data to, as Maryland lawmakers put it, “calibrate price increases to extract maximum profits on the backs of consumers.”
That could look like anything from price discrepancies between what you and another shopper pay for the same items at a grocery store, to paying hundreds more for hotels and flights — as Professor Zagorsky experienced first hand.
All of which means that consumers will have to be more savvy when it comes to protecting their pocketbooks against AI-induced price increases.
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How to combat AI-induced price hikes
The next time you go to buy anything from groceries to gadgets to tickets for a getaway, consider these tips for saving as much money as possible.
Plan ahead and buy in bulk: Consumer Reports advises that meal-planning to avoid waste, and shopping at bulk stores like Costco, can help keep prices down in general and reduce the impact of any AI-related price jumps.
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Use paper money and clear your cache: Paying with paper money leaves no electronic trail for AI to exploit, Professor Zagorsky noted. And if you have to shop online, he added that clearing your cache gives AI algorithms less personal info and history on which to adjust its prices for you.
He also said turning off his VPN dropped the price of the airline tickets that skyrocketed when the algorithm thought he was in “a rich American neighborhood.”
Turning on incognito mode while online shopping may also limit the personal information sites can glean.
Stay flexible: When it comes to purchasing flights, some suggest being flexible with your itinerary to allow you to take advantage of discounted ticket prices — like midweek bookings, which tend to cost less than weekend travel.
Compare prices: The Wall Street Journal explained that using comparison travel sites to shop ticket prices “avoids triggering demand signals on a single site, which may keep prices from rising before you are ready to book.”
They also noted that comparing prices for any goods on multiple browsers and devices could also yield unexpected savings.
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Mike Crisolago is a Sr. Staff Reporter at Moneywise with nearly 20 years of experience working as a journalist, editor, content strategist and podcast host. He specializes in personal finance writing related to the 50-plus demographic and retirement, as well as politics and lifestyle content.
