Big Tech is hyping and overpromising AI benefits as well as overvaluing their corporations’ worth. Half of the total investment so far is using risky private credit after maxing out bank loans. Most U.S. taxpayers don’t realize that 30% of the federal government’s investing is in AI companies! And Texas is already giving a billion-dollar tax break to tech every year.
This loot is used to hype the market for AI and build up fear of missing out (FOMO) in almost every industry. Consultants and training firms are making hay selling seminars for CEOs and for workers to “save your job by learning AI.”
Anything goes
Development and usage of AI requires huge numbers of supercomputers, so tech giants are recklessly racing to build hundreds of enormous data centers, with no regard for the massive amounts of land, power and water needed. Thousands of acres are required for each one. Many supercomputers will be obsolete in three to five years and need replacement by newer more powerful ones. Tech bros are betting they can make enough to cover their debts and still profit.
Builders are using secrecy and lies to get permits and avoid protests over noise, light, traffic and heat impacts on residents. The U.S. electric grid is not prepared to handle their energy transmission and water is already scarce in many regions. Elon Musk even pitches building in space or on the moon, while others are using mini-nuclear power plants or dirty methane burners.
The Trump administration clears hurdles for data center buildout and refuses to regulate AI use. Trump tries to stop all clean energy projects while lifting regulations on fossil fuels and nuclear power. He moves to stop planned shutdowns of five coal-fired plants, keeping his fossil fuel cronies happy and eagerly expecting more AI weapons and surveillance tools.
The “godfather of AI,” Geoffrey Linton, and hundreds of scientists issued serious warnings about AI becoming uncontrollable. The newest levels of agentic AI are able to take independent actions without human instruction. Anthropic’s latest version, Claude Mythos, is termed too dangerous to release. It finds vulnerabilities in software faster than they can be fixed. In the hands of hackers, according to Fortune, the world could see a wave of devastating cyberattacks taking down banking systems, power grids, or water systems.
Resistance mounts
Efforts are growing to halt AI development and data center growth until regulations and safety policies are in place. Many localities are winning moratoriums on planned data centers. A major push is to require that centers be totally self-supporting for power, not subsidized by government or residential consumers, and responsible for remediating any pollution.
About half of the proposed behemoths have been delayed or canceled. The Maine state legislature passed a moratorium on new data centers, but Governor Janet Mills vetoed it. In Festus, Missouri, all four city council members who approved a data center were recalled, and many family farmers are refusing multimillion dollar offers for their croplands.
This bubble will burst
Fed Chairman Powell said the U.S. economy was resilient due to “insatiable demand for data centers.” Musk, Altman, and their ilk may be rolling in money, but working people are suffering. When jobs are replaced with AI and robots, bosses don’t pay wages, pensions, or healthcare, but workers without wages can’t buy many products. And robots don’t buy anything!
Companies that jumped on the AI bandwagon are now finding that the costs are not bringing benefits. An MIT study found that roughly 95% of companies using AI have not yet achieved positive business impact.
Add the loss of millions of immigrant workers to those replaced by AI and there are far fewer consumers, a lower tax base and deepened poverty. Prices continue skyrocketing on fuel, food, and rent and some economists’ estimate 6% inflation by year’s end.
Tech corporations are speculating on the economy. Only a few AI giants and startups will triumph, causing bankruptcies, more layoffs, and drastically hurting pension systems and small investors. When the bubble bursts a recession or worse is sure to follow.
AI is a powerful tool unlike any seen before. It already produces some amazing benefits in research and medicine, if closely supervised and audited. It could free up workers from tedious or dangerous jobs. But when the race to make profits outruns science, regulations, and policies protecting workers and the public interest, it means disaster for working people, the economy, and the Earth.
