Juggling Dynamite

Amid all the talk about the economic, stock and credit market risks that have been magnified by the AI spending frenzy, very few mention the unsustainable environmental costs. This discussion offers a taste of the implications for all of us.

Since a famous case against a California utility, the name Erin Brockovich has become synonymous with a fighter taking on big polluters. Earlier this year, Brockovich began receiving e-mails from people worried about the construction of A.I. data centers, which is happening at a frenetic rate all over the country. People expressed concerns about the loss of farmland and natural areas; disruptions to the water table; deleterious noise; and substantial usage of electricity and water, leading to rising utility bills. She speaks with David Remnick about her to document data-center construction and environmental complaints. “In my thirty years,” she tells Remnick, “I’ve never really seen the people show up like they are at a very local level.”

Here is a link to Brockovich AI Data Center Reporting website and below is the the map showing community complaints to date about AI data centers.

Different cycle, similar Enron-esque financial tricks and behaviours have compounded financial and contagion risks. The segment below connects some important dots.

AI infrastructure is being financed by some of the world’s most conservative pools of capital, including life insurance companies and pension funds. In this video, I examine the risks of AI data center debt, rapidly depreciating GPUs, and whether this could create a financial crisis reminiscent of the 2008 “Big Short.” Here is a direct video link.

Many good observations in this segment. If you have money in the stock market, you should understand what you are betting on.

AI-linked stocks account for a record 45% of the S&P 500’s total market capitalization and drive nearly all of the gains it’s had for the year so far. Note that’s the S&P, the general market. These companies make up an even higher percentage — nearly 70% — of the NASDAQ 100’s market cap. Here is a direct video link.

Also, this one:

There are fresh signs that the AI boom is wobbling. Again. In recent weeks, a much-vaunted AI focused hedge fund run by Valley wunderkind Leopold Aschenbrenner lost $35 billion dollars. South Korea saw its largest-ever stock market collapse as investors pulled bets on AI chips. Due to a fresh series of moratoria and political opposition, the future of the massive data center buildout has never looked more uncertain. The US markets have dipped and boomed, dipped and boomed. Where does all of this leave us? Everybody agrees we are in some kind of a bubble. How big? When will it burst? How? This week, I dive into all these questions with noted AI skeptic, analyst, and industry scapegoat Ed Zitron, the author of the Where’s Your Ed At newsletter and CEO of EZ PR. Here is a direct video link.