AI is a bubble, but it’s a very, very big bubble. Strip AI out of the GDP and we’re doing kinda meh. The Fed saw to that, of course, as housing in particular has been dormant.
Anything to stop Trump, dontchaknow?
AI needs juice. Lots and lots and lots of juice. Juice of two kinds: electricity and water, at a scale that dwarfs current supply. We’re not talking about windmills or solar any more. No, no. We’re talking about — NUKES!! This is because to get to 25GW from 7GW today, you need something more than natural gas and coal—although they, too, will be suddenly sanctioned. You need the Big ‘N’. It’s almost comical how the dreaded ‘N’ word has made a comeback in the media. Not at the forefront, at least yet, but definitely bubbling beneath the surface.
To build upon existing data center infra, whole swaths of real estate (Manhattan island-sized data center sites, and many of them) are required. And power plants and water supplies must be paired with the data center, not just piped in. Residents in VA, PA, MD will bear the brunt as, necessarily, the current grid will need to be tapped for supply. True for agua, too, which will require … gasp! … dams. Both utilities will be maxed out for years until supply catches up with demand — if a giant bubble-bursting reset doesn’t come first.
That I don’t see, however. While there is clearly a bubble in AI stocks (take away AI stocks and the NYSE is meh, so-so), the underlying demand for the new technology will live on. It’s eerily reminiscent of the dawn of the internet. Anyone remember the dot-com bubble of the early 90s?
Separately, but related, our genius leadership class has made us hostage to China’s rare earth supply chain. It’s not that we don’t have access to rare earths—we do, either domestically or from friendly sources. Rather, it’s environmental regs that prevent us from tapping into our own supply.
Kinda like nukes.
Kinda like dams.
But the Tech Bros run the show now, not smelly tree huggers. Watch for reg after reg to be waived.
This illustrates, of course, that the whole environmentalist movement was never based on a core need to save Gaia, but was ideologically-driven, agenda-driven, Leftist poppycock. Now that their ideologically like-minded Tech Bros are running the show, they’ll switch on a dime and it’ll be like the environmental wacko-ism of the past decades never happened.