By 
AI Hardware Shortages to Redefine Global Markets in 2026 — Nigel Green
AI hardware scarcity will become one of the defining forces shaping global financial markets in 2026, according to Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory firms.
RELATED: Which AI hardware will rise above in the wake of competing AI models?
Green warns that the accelerating AI boom is shifting from a pure-growth narrative to a supply-shock story, with far-reaching implications for pricing power, market volatility, and investment returns.
AI Infrastructure Demand Hits Physical Limits
Green explains that the rapid expansion of AI data centres, cloud infrastructure, and computing power is now clashing with the physical limits of global supply chains.
“The pace of AI infrastructure expansion is colliding with physical limits in global supply chains,” he says. “This imbalance is pushing up prices, concentrating market gains, and increasing volatility. In 2026, this will move from background noise to centre stage for investors.”
Critical components — including advanced chips, high-bandwidth memory (HBM), specialised silicon, networking hardware, and power systems — are already in short supply.
Manufacturers are prioritising major AI hyperscalers, forcing up component prices and intensifying competition among enterprise buyers.
Pricing Power Shifts to Component Suppliers
With scarcity biting harder, the balance of pricing power is shifting rapidly.
“When scarcity appears, pricing power moves instantly,” Green notes. “Companies that control essential components can protect margins and dictate terms. Everyone else absorbs the pressure.”
This shift is reshaping corporate behaviour.
Hyperscalers and large enterprises are locking in long-term supply agreements, securing future capacity years ahead. This strengthens revenue visibility for key suppliers but exposes companies without such contracts to heightened risk.
Equity Markets Becoming Increasingly Concentrated
Equity markets are already responding to this realignment.
A small cluster of hardware, semiconductor, and infrastructure firms is capturing a disproportionate share of returns.
Index performance looks stronger on the surface, but underlying market breadth is weakening.
“Markets look strong, but underneath they’re becoming increasingly fragile,” Green warns.
Ripple Effects for Consumer Tech and Manufacturers
The impact is extending beyond AI.
Consumer electronics manufacturers — including smartphone and laptop producers — rely on many of the same components now being diverted to AI systems.
This creates a double pressure point:
- Higher input costs for manufacturers
- Higher retail prices for consumers
These pressures distort economic signals. While headline inflation appears to be stabilising, rising component costs are squeezing margins and slowing upgrade cycles across consumer sectors.
2026: A Year of Divergence and Hidden Inflation Pressure
Green expects the divergence between macroeconomic indicators and sector-specific inflation to widen in 2026.
Even as broader inflation trends support expectations of easier financial conditions, AI-driven demand will keep pricing pressure elevated in the tech hardware ecosystem.
“AI demand is scaling, but supply constraints are not easing. Investors may face an environment where inflation looks under control overall, yet is intense in the very sectors driving market leadership.”
Winners and Losers in the Age of AI Scarcity
The long-held assumption that innovation cycles lift all tech players no longer applies.
“AI is not lifting all boats,” Green stresses. “It is selecting winners and losers.”
Companies with strong positions in AI supply chains — particularly those securing long-term component agreements — stand to benefit. Others, lacking supply visibility or dependent on volatile hardware markets, face greater operational and earnings risks.
Global capital expenditure commitments for AI infrastructure, already running years ahead, will further amplify this divide.
Volatility Expected to Rise as Supply Constraints Deepen
Volatility is likely to increase as 2026 approaches.
Stock movements will be increasingly driven by:
- Delivery delays
- Component shortages
- Pricing adjustments
- Capacity expansions
- Shifts in contract structures
“The days of vague AI exposure are over,” Green says. “Precision matters.”
A New Market Narrative Driven by Scarcity
Nigel Green concludes that demand for AI is durable, but the market narrative has shifted.
“AI demand is real and durable, but scarcity — along with factors such as performance over hype — will define the next phase. Investors who ignore this shift do so at their own risk.”
