The rapid expansion of artificial intelligence is beginning to put pressure on Apple’s profit margins, as rising demand for advanced components from AI-focused companies drives up costs for critical parts used in iPhones and other devices. Key components such as high-bandwidth memory (HBM), specialized chips, and advanced sensors are becoming increasingly scarce and expensive due to strong demand from AI infrastructure builders like Nvidia, Meta, and Google. These components, essential for powering AI workloads, are now being prioritized by semiconductor manufacturers, leading to tighter supply and higher prices. As a result, Apple, which relies on a vast global supply chain to produce its premium devices, is facing increased input costs. While Apple has historically maintained strong profit margins through efficient supply chain management and premium pricing, the surge in component prices threatens to erode those gains. The situation is particularly acute for memory and processor technologies. HBM, used in high-performance AI accelerators, is now in such high demand that it's being redirected away from consumer electronics, including Apple’s devices. This shift is forcing Apple to either pay more for limited supplies or risk delays in product development and production. Analysts warn that if these cost pressures persist, Apple may be forced to either absorb the higher expenses—reducing margins—or pass them on to consumers through price increases. However, raising prices could be risky in a market where demand for iPhones is already showing signs of stagnation. Apple has not publicly commented on the impact of AI-driven component shortages, but internal discussions are reportedly underway to diversify suppliers, invest in alternative technologies, and strengthen long-term contracts with chipmakers. The company is also accelerating its own silicon development, including next-generation chips designed to be more efficient and less reliant on the most constrained components. As the AI boom reshapes the semiconductor landscape, Apple’s ability to maintain its historically high margins will depend on how effectively it navigates supply constraints and evolving market dynamics. The coming quarters will be a critical test of its resilience in an era where AI demand is no longer confined to data centers but is increasingly influencing the cost and availability of components across the tech industry.