Power is Knowledge

In the movie Scarface, Tony Montana famously explains, “In this country, you gotta make the money first. Then when you get the money, you get the power.” It turns out that in the age of AI data centers, even money can’t always buy one power. The existing grid doesn’t have enough supply to keep up with demand. That’s forcing many deep-pocketed tech companies to get high on their own power supplies as they add more and more data centers. “Most tech titans would be happy to trade their DIY sourcing for the ability to plug into the electric grid. But supply-chain snarls and permitting challenges are complicating everything, and the U.S. isn’t building transmission infrastructure or power plants fast enough to meet the sudden surge in demand for electricity. America should be adding about 80 gigawatts of new power generation capacity a year to keep pace with AI as well as cloud computing, crypto, industrial demand and electrification trends, according to consulting and technology firm ICF. It’s currently building less than 65 gigawatts. That gap alone is enough electricity to power two Manhattans during the hottest parts of summer.” WSJ (Gift Article): AI Data Centers, Desperate for Electricity, Are Building Their Own Power Plan. “Planning and building large-scale power plants or expanding grid infrastructure takes years. The process, normally gummed up, is even more difficult lately. Projects of all kinds face hurdles obtaining permits, equipment shortages, a labor crunch and rising costs, exacerbated by Trump’s tariffs on steel and aluminum, as well as some copper products.”

+ The new and growing demand on our aging energy grid isn’t just a challenge for tech power players looking to add more computers to their racks. It’s also limiting supply and jacking up prices for consumers. “Each state has unique energy needs, with a variety of factors contributing to costs. But common factors include rising supplier rates, consumer demand, regional regulations and a lag in clean-energy solutions. One major contributor is the growth of A.I. data centers, which use a huge amount of electricity to power nonstop computing. Energy providers have responded by seeking more energy at higher prices and transferring the costs to consumers.” NYT (Gift Article): This Summer’s Stunning Electric Bill: For at least a fifth of U.S. households, the increases have likely been financially burdensome. The richest companies are finding a way around their energy challenges. The poorest Americans are footing the bill. Reminds me of another Tony Montana quote: “You know what capitalism is? Getting f**ked.”