Data centers are vast warehouses filled with specialized chips that convert energy into computation to run AI models. Investment into AI infrastructure has surged to levels that risk broader economic stability. Economic accounting for data centers is opaque because enormous construction spending obscures true costs; one state revised private data center fiscal projections from $130 million to $1 billion within two years. Genuine lifecycle costs include rapidly obsolete chips, intermediate systems requiring replacement about every decade, and long-lived facility shells. When replacement cycles and hardware failure are factored, the effective economic lifespan shrinks, creating risks of capital misallocation and an investment bubble.
I've watched as AI went from an interesting parlor trick for making memes, to something that's increasingly integrated into my daily workflow,
I am not here to belittle AI, it's the future, and I recognize that we're just scratching the surface in terms of what it can do.
I also recognize massive capital misallocation when I see it,
I recognize an insanity bubble, and I recognize hubris.
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