Ericsson second-quarter profit tops expectations, warns on AI costs

Ericsson expects the increase in component costs due to the AI build-out to put pressure on the company to raise prices.

"The whole AI build-out is putting quite the pressure on the whole industry, including us," CFO Lars Sandström told Reuters.

Apart from memory prices, it is also affecting custom chips the company uses in building telecom infrastructure, he said.

Memory makers have in recent months prioritised orders from AI chipmakers, leaving little supply for electronics makers that have been forced to increase prices.

Outgoing CEO Borje Ekholm said the company would continue to pursue internal measures and pricing actions to help offset the effect in the coming quarters.

"We are taking near-term actions across the businesses, including commercial measures, for example, product substitution, as well as supply chain actions and targeted cost initiatives," Ekholm said on a conference call.