this post was submitted on 08 Jul 2026
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He's mentioned in the third paragraph of the link. But yes, it is. In order for it to be "worth" burning a trillion dollars every year on AI, then there has to be a time in the near future, 2030 or so, where AI will be making unimaginable trillions. If the datacentres aren't being built, then that money can't possibly be coming in as planned. That makes the massive investment in NVidia's GPUs look extremely shaky - why buy them if they'll never be turned on? - and it means Oracle will be completely in the shit.
Ed's arguments have been, "if any link in the chain fails, the whole thing falls down". I think he'd been leaning towards "banks being unwilling to keep financing datacentre builds on debt" as the most likely stumbling block, but just being unable to power the damned things for want of infrastructure and skilled engineering, as here, is a problem he talks about frequently too.
He thinks it's likely it'll bring down the entire tech industry, since they're now full of idiotic MBAs with no other big ideas. And frankly, it's about time.
This wouldn't be the first bubble popping do to a failure to consider the vertical infrastructure build. Heck, some analysts blame the sinking of the Titanic on substandard bolts (that is, building a ship too big and too fragile for the technology available.)
This would be a great opportunity to pump a lot of money into renewable energy and maybe even fusion R&D. (Yes, fusion often looks like a dead end, but that's been something of a self-fulfilling prophecy, since pessimism has been slowing funding even to the best and brightest leads.)
They could have also started investing in developing cooler memory and processing units, or better systems to cool them. Instead, the data center companies just bribed officials to let them use up water (and fuck the supplies for their neighbors) thinking that the people were just going to roll over and die.
I'm all here for the green energy. I think it's worth investing in "both sides of the coin", though. Now that I've replaced all the energy-wasting bulbs in the house with LEDs, and the house is well-insulated enough that there's just no need to run a three-bar electric fire to keep warm, then I'm at the point where solar panels would be sufficient for nearly all my energy requirements. That's partly because solar has got better, but mainly because I'm just using loads less
On that note, the secret to not having power and cooling issues running tens of thousands of super-hot GPUs in the desert, is not to build them. Which as they're not being built, might be enough ;-) But investing in more effort processing units and more efficient models would do it too. They wouldn't have their "no one else can afford this" moat if it was all made more affordable, tho.
They wouldn’t have their “no one else can afford this” moat if it was all made more affordable, tho.
In a functional capitalist society (yes, those can exist, even if Marx says they're temporary), the point would be not to provide a computing service but appliances that can perform that service. There are AI hobbyists who run open source LLM engines and retain their own dataset and bunches of LORAs. Granted it's only terrabytes of data rather than exabytes (zettabytes? yottabytes?) and sometimes they have to let their home system brew for hours instead of minutes or seconds on a given task.
But an example of this kind of model appears in the 1970s and the invention of the personal computer, itself, before which there were only mainframes that were held by large companies (and similarly, the first PCs were hobbyist DIY kits).
I see this as a sea change driven by the same motivation that has turned large companies (who have out competed all their peers) towards enshittification. Now that we're into the rental economy, where even software is a service rather than an appliance, the AI companies don't want to make AI machines that they can sell, but to provide an AI service that will force their ~~consumer base~~ customers to keep buying and keep paying.
I don't think that model can scale up. What we need to do is the same thing we did when we upgraded our secretaries from a typewriter and a Rolodex to a PC with an office software suite. Right now we're seeing that even when we replace or reduce the human workforce with AI tools, the cost is greater than the original workforce (though for now, that cost is borne by the AI companies at a loss, rather than their downstream clients).
Instead we should be developing AI computer systems at the mainframe and PC level as tools to facilitate workers, which would (we hope) increase their productivity.
But again, our conglomerate corporations are trying to shore up their dominant positions in the economy, and so, as Cory Doctorow observed, are trying to do a blanket replacement of their workforce, which is failing spectacularly.
RANT: And since our ownership class and C-suite management have demonstrated they refuse to engage in commerce in good faith, seeking to replace competitive production with rent, lobbying government and financial shenanigans, the public needs to recapture government -- by force ~~as~~ if necessary -- to go back to regulating commerce and protecting workers and consumers alike. History has shown that this can create an economic environment that is fecund for benevolent innovation, e.g. better stuff for everyone.