Thank you for this post! I am a business communication teacher and I often struggle with helping students understand the complexities of AI and how it affects them academically, professionally, and personally. The way you've explained things here seems more attuned to the way my students think, so I'm excited to use this post (and your future posts!) to help them learn more about this technology. Appreciate your work!
As a young person passionate about technology for it's 'cool' factor since age 7, this is very depressing. Grassroot organizations like mine suffer and eventually die out due to lack of funding. To rework this entire technocapitalist system we need to focus on grassroot initiatives more.
Very interesting! I am from Germany, an old investor in stocks, using the profits for educational projects for the poor.
Regarding AI I always was skeptic. Here I found some good help to understand more, including the consequences of the concentration of wealth and power in the billionaire class.
Meh. Exxon's net profit in 2023 is dwarfed by Google's and Microsoft's.
Each of these 2 tech companies made something like 3 to 4 times the profit of Exxon - so invoking the fossil fuel industry bugbear is off base.
The AI "revolution" is 100% driven by the hyperscalers, period. Bill Gates and Satya Nadella visited North Dakota in September 2024 to push a new fiber optic line from Montana to Minnesota, through North Dakota, in conjunction with Microsoft building a massive new AI data center to take advantage of the pending Bakken natural gas glut.
They in turn were no doubt lured in by Applied Digital's new data center in North Dakota. This was not because of natural gas per se, but rather takes advantage of a transmission bottleneck and its resulting low electricity prices (on one side of the bottleneck).
To your first point: If I had only mentioned Exxon, that might be a fair point! But as I lay out: the fossil fuel industry itself has made hundreds of billions of dollars since 2022 and their extraction buildout is continuing full speed despite all the hot air about sustainability. So why wouldn't tech firms keep offering last generation's oil cloud contracts AND push for glitzy gAI products for oil & NG to emerge as a stable use case, especially when they've abandoned their sustainability commitments? To dismiss that as a bugbear is a bit silly.
To your second point, I hear you but I don't think its 100 percent driven by hyperscalers. In the next half I'll talk about the financial actors that have helped proliferate data centers by driving capital into a new asset class. And, sure, Microsoft's play there isn't about natural gas per se but it's pretty clear it's using fossil fuel infrastructure to exploit a bottleneck that'll let it dominate connectivity, markets, and future policy and shape them to further compel this overbuild/overinvest/overvalue cycle—the problem I'm laying out!
The fossil fuel industry's income is all over the world.
The AI buildout is pretty much only in the US.
As for the financial: this is even weaker. Microsoft, Google and Amazon are not borrowing money to build out data centers - they are spending profit. Even the pending stage where Softbank and Stargate are coming in - have nothing to do with banksters.
Or put in direct terms: just because the fossil fuel industry *may* benefit from the AI buildout, does not mean the fossil fuel industry is driving it. In fact, this is exceedingly unlikely because of the fact that fossil fuel is so critical to the function of modern society. They don't need to drive demand, whatever morons say.
I don't know if this is deliberate, but this attempt to lump all the "bad people" together - that in turn dilutes the responsibility of the hyperscalers - is flat out wrong.
Are we pretending hyperscalers are the only ones with compute capacity? Other tech firms? Colocation? Enterprise? That they all don't have utilize different financing models and instruments? That REITs haven't played a role in breathing life into the data center asset class?
Are we pretending Blackrock doesn't have a $100bn data center partnership? That Blackstone doesn't have $70bn in data center assets? That SoftBank isn't going to have to borrow $18 billion from "banksters" to make its Stargate and OpenAI investments happen?
The hyperscalers have spent $200 billion for AI already, and were planning to spend $500 billion.
Do you not actually understand how much investment this is in terms of existing cloud capacity?
Clearly you do not.
Clearly you have not read the Zitron piece, because that piece notes that Microsoft's entire cloud capacity in April 2024 was 4 Gigawatts, and that this was set to rise to 7.5 gigawatts by June 2025. Even then, some part of that 4 gigawatts is also AI spend since Microsoft entered into its OpenAI relationship, replete with billions of Azure cloud credits and Azure cloud discounts, in 2016.
Equally, the Stargate and Softbank are clearly end game rug pulls on the taxpayer and Masayoshi Son, respectively.
I don't know of a single a tech scam in the last decade that did not leave Softbank holding the bag.
Do you not understand the difference between drivers and followers?
Softbank has been the bag holder for every POS tech scam outfit for a decade now, so not at all clear what is the incisive point that you are trying to make.
Thank you for this post! I am a business communication teacher and I often struggle with helping students understand the complexities of AI and how it affects them academically, professionally, and personally. The way you've explained things here seems more attuned to the way my students think, so I'm excited to use this post (and your future posts!) to help them learn more about this technology. Appreciate your work!
As a young person passionate about technology for it's 'cool' factor since age 7, this is very depressing. Grassroot organizations like mine suffer and eventually die out due to lack of funding. To rework this entire technocapitalist system we need to focus on grassroot initiatives more.
Very interesting! I am from Germany, an old investor in stocks, using the profits for educational projects for the poor.
Regarding AI I always was skeptic. Here I found some good help to understand more, including the consequences of the concentration of wealth and power in the billionaire class.
Meh. Exxon's net profit in 2023 is dwarfed by Google's and Microsoft's.
Each of these 2 tech companies made something like 3 to 4 times the profit of Exxon - so invoking the fossil fuel industry bugbear is off base.
The AI "revolution" is 100% driven by the hyperscalers, period. Bill Gates and Satya Nadella visited North Dakota in September 2024 to push a new fiber optic line from Montana to Minnesota, through North Dakota, in conjunction with Microsoft building a massive new AI data center to take advantage of the pending Bakken natural gas glut.
They in turn were no doubt lured in by Applied Digital's new data center in North Dakota. This was not because of natural gas per se, but rather takes advantage of a transmission bottleneck and its resulting low electricity prices (on one side of the bottleneck).
To your first point: If I had only mentioned Exxon, that might be a fair point! But as I lay out: the fossil fuel industry itself has made hundreds of billions of dollars since 2022 and their extraction buildout is continuing full speed despite all the hot air about sustainability. So why wouldn't tech firms keep offering last generation's oil cloud contracts AND push for glitzy gAI products for oil & NG to emerge as a stable use case, especially when they've abandoned their sustainability commitments? To dismiss that as a bugbear is a bit silly.
To your second point, I hear you but I don't think its 100 percent driven by hyperscalers. In the next half I'll talk about the financial actors that have helped proliferate data centers by driving capital into a new asset class. And, sure, Microsoft's play there isn't about natural gas per se but it's pretty clear it's using fossil fuel infrastructure to exploit a bottleneck that'll let it dominate connectivity, markets, and future policy and shape them to further compel this overbuild/overinvest/overvalue cycle—the problem I'm laying out!
Nice try, but still wrong.
The fossil fuel industry's income is all over the world.
The AI buildout is pretty much only in the US.
As for the financial: this is even weaker. Microsoft, Google and Amazon are not borrowing money to build out data centers - they are spending profit. Even the pending stage where Softbank and Stargate are coming in - have nothing to do with banksters.
Or put in direct terms: just because the fossil fuel industry *may* benefit from the AI buildout, does not mean the fossil fuel industry is driving it. In fact, this is exceedingly unlikely because of the fact that fossil fuel is so critical to the function of modern society. They don't need to drive demand, whatever morons say.
I don't know if this is deliberate, but this attempt to lump all the "bad people" together - that in turn dilutes the responsibility of the hyperscalers - is flat out wrong.
Are we pretending hyperscalers are the only ones with compute capacity? Other tech firms? Colocation? Enterprise? That they all don't have utilize different financing models and instruments? That REITs haven't played a role in breathing life into the data center asset class?
Are we pretending Blackrock doesn't have a $100bn data center partnership? That Blackstone doesn't have $70bn in data center assets? That SoftBank isn't going to have to borrow $18 billion from "banksters" to make its Stargate and OpenAI investments happen?
Let's chat again when the next piece is out!
The hyperscalers have spent $200 billion for AI already, and were planning to spend $500 billion.
Do you not actually understand how much investment this is in terms of existing cloud capacity?
Clearly you do not.
Clearly you have not read the Zitron piece, because that piece notes that Microsoft's entire cloud capacity in April 2024 was 4 Gigawatts, and that this was set to rise to 7.5 gigawatts by June 2025. Even then, some part of that 4 gigawatts is also AI spend since Microsoft entered into its OpenAI relationship, replete with billions of Azure cloud credits and Azure cloud discounts, in 2016.
Equally, the Stargate and Softbank are clearly end game rug pulls on the taxpayer and Masayoshi Son, respectively.
I don't know of a single a tech scam in the last decade that did not leave Softbank holding the bag.
Do you not understand the difference between drivers and followers?
Let's chat again when the next piece is out!
Are you saying you don't know that Softbank is having to raise (borrow!) Billions to fund Stargate and OpenAI's expansion? "spending profit"??
Eish man, you should read more and spout less
Softbank has been the bag holder for every POS tech scam outfit for a decade now, so not at all clear what is the incisive point that you are trying to make.