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Republicans are warning that their ability to deliver on everyday spending cuts, one of their campaign promises heading into the 2026 midterms, is being hampered by a shortage of AI-powered chips widespread in consumer markets.
“When you have as big a competition as we have with AI, there are secondary consequences that we need to be more concerned about,” former President Patrick McHenry, who served as chairman of the House Finance Committee, told Fox News Digital, adding, “It hurts Republicans.”
Tech industry reports have been warning of a global chip shortage for months. In January, a report predicted that this year, 70% of the high-end memory chips produced will go to data centers, which store AI memory, preventing all other technologies from going downhill and raising prices, directly harming the Republicans’ agenda of accessibility.
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President Donald Trump delivers remarks at the “Winning the AI Race” AI Summit at the Andrew W. Mellon Auditorium in Washington, DC, on July 23, 2025. (Andrew Caballero-Reynolds/AFP)
“We’re seeing this from our mobile devices to our computers, to our TVs,” McHenry, a North Carolina Republican congressman turned policy consultant, said in an interview. “Even cars are affected, even things like what we think of as normal everyday things that aren’t high-tech, like the things we use to mow our lawn are affected by the rising price of chips, so there are a lot of secondary effects on all consumer goods and it should be a big concern.”
Starting in 2026, President Donald Trump set up the midterms as a poll on the cost of living, saying in a Politico interview that the election “will be about prices.”
Historically, the ruling party loses seats during midterms. One Republican strategist told Fox News Digital that AI’s well-documented dominance of the chip market should be viewed as hurting voters’ pockets. The strategist called on the three major chip companies to increase production, which he said would help reinforce the GOP’s campaign message.
“America must win the intelligence race. Companies like Samsung, SK Hynix, and Micron understand that,” said the strategist. “At the same time, we cannot forget about consumer goods. Memory chip manufacturers need to increase production to increase both American AI and reduce the cost of consumer goods. If not, it will undoubtedly hurt the Republicans politically during the terms. How can the Republicans campaign on ‘low cost’ in 2024, but look at the production of 20 computers for the lack of 20 cars?”
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The OpenAI logo appears on a mobile phone in front of a computer screen showing the ChatGPT exit in Boston on March 21, 2023. (Michael Dwyer/AP)
The AI boom is increasing demand for memory chips, which are semiconductor components used in data centers, laptops and smartphones.
That use of the chip has increased in all industries. Microsoft this month attributed its laptop price hikes to “recent increases in memory and component costs.” The smartphone market remained “under pressure,” with shipments down 6% this year, largely due to chip shortages, Counterpoint Research found.
Sen. Bernie Moreno, R-Ohio, a former auto shop owner, warned in a letter this month that his state is seeing the “immediate and severe” effects of rising chip prices and that automakers said they could begin shutting down assembly lines as early as next month.
While affordability has been a priority for Republicans seeking to maintain control in Washington, AI development is also a pillar of Trump’s agenda. The White House announced last year in a sweeping statement that the country is “in a race to achieve global dominance in artificial intelligence” and expressed the need for a “revived US chip industry.”
Asked about AI-driven concerns, White House spokesman Kush Desai told Fox News Digital in a statement that the White House recognizes the contradictions and balances the economic plan “absurdly”, including Trump’s signing of global tariffs, which the president reorganized after the Supreme Court withdrew his name from the economic start-up.
“The fact that semiconductor chips are so important to everything from advanced AI technology to everyday consumer goods only underscores the importance of President Trump’s push to revitalize America’s semiconductor industry,” Desai said. “Hundreds of billions in investment in semiconductor manufacturing demonstrates how the private sector is responding enthusiastically to the Administration’s agenda of multiple tax cuts, deregulation, and tax cuts.”
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President Joe Biden speaks during a signing ceremony for the CHIPS and Science Act of 2022 on the South Lawn of the White House in Washington, DC, on Aug. 9, 2022. (Saul Loeb/AFP)
The supply crisis also raises new questions about the effectiveness of the bipartisan CHIPS Act, the Biden administration’s bill designed to boost domestic production and prevent precisely the kind of market deficit it is now.
McHenry, who specializes in fintech policy, said the CHIPS Act, a multibillion-dollar effort to pour government subsidies and tax incentives into US chip manufacturing, has been a “huge disappointment.” McHenry said both the White House has “a lot of work” to do to address the supply shortage and that congressional reforms are another way to boost domestic chip production.
“The sad thing is for taxpayers, they paid the first time for the CHIPS Act, and now they are paying for it the second time with the increase in the price of goods,” said McHenry. “Republicans need to address this on Capitol Hill. They need to clean up the CHIPS Act so the president can use these tools to promote and grow chip manufacturing here in the United States.”
Rep. Darrell Issa, R-Calif., who founded a successful auto safety company, said he sees a need to expand chip production, including consumer spending, in a statement to Fox News Digital.
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“America is leading the world in AI — and we’re staying there by freeing up the nation’s industrial base, expanding chip and memory production like never before and lowering consumer costs that people pay every day,” he said.
The congressman said more chips are “critical” to fulfilling the GOP’s promises of “opportunity, prosperity and affordability.”
Fox News Digital has reached out to representatives of Samsung, SK Hynix and Micron for comment.
