I read a very interesting YouTube post from Mark Malek of ‘Wall Street Truth Bombs’. The title is sensationalized so don’t take it at face value, I’ll explain further. Here’s the video…
TEXAS SHUTS DOWN AI: Why Texas Just Blocked 90% of Big Tech Data Centers!
Well, kind of, the substance is that the state has put a temporary break on the formal requests for power delivery from the data center companies, because it is simply impossible to fulfill them given the physical limitations on the power grid.
The background, based on my reading and Malek’s thoughts, is that the AI industry hypes its stock by claiming that the golden age of super-intelegence is just around the corner as long as they have an unlimited ability to expand their computing capacities to match the demand from AI. Thus, datacenters cover the earth and extend on into outer space.
The fly in the ointment is that, as Malek puts it,
“Physical infrastructure doesn’t care about your valuation model, giga-watts are not software, you can’t push an update and double your electrical capacity overnight … you can’t code your way around a transformer shortage.”
Malek: “This looks like a long-term fight between residential rate payers and the biggest companies on earth over who gets the electricity first”.
This is bad news for the AI providers and good news for the companies that sell power and build the equipment. Malek suggests that the tech companies are already attempting to get around this by building their own private power generating infrastructure. Amazon, for example, is investing in small nuclear reactor technology.
If you want more about the economics of AI I refer you to Ed Zitron and his blog Better Offline.
I always do some background checking on commentators I encounter on YouTube. Malek is in fact a big-shot Wall Street financial professional. I still caution you about commentators you find online and I still don’t know much about this guy. But seems that he is not just another self-appointed “influencer.”
I am currently reading “The Nerd Reich”, The Nerd Reich: Silicon Valley Fascism and the War on Democracy, by Gil Duran, and just finished Jill Lepore’s “The Rise and Fall of the Artificial State“. This behavior aligns well with their picture of the tech giants’ wild ambitions and deranged philosophies. Reviews coming soon.