If you're confused about how the hell AI is going to make the kind of money needed to turn a profit, I'll illustrate

[hatrack]

24. All well and good, but the energy demand will kill us (financially and literally) . . . .

TX is currently facing interconnection requests for new locations (AI, crypto and other data centers) for four times the maximum demand ever placed on their grid. That's 205 new gigawatts of requests. The maximum daily demand ever on their grid was 85.5 GW in August 2023.

https://insideclimatenews.org/news/28102025/texas-data-center-grid-planning-struggles/

This is one among a multitude of examples of how much of a fuck-up this whole thing is likely to end up being.

Q&A

1. How quickly can new plants be built?
2. Will they be built?
3. If they are, who will pay for them?
4. What happens to the sunk capital costs if the whole AI bubble goes tits-up?
5. What does this do to electric rates for everybody else?
6. Will promoters of data center development concern themselves with water availability?

1. Answer - Not quickly enough to satisfy the tech bros and bubble-pumpers.
2. Answer - Potentially, but utilities are famously conservative businesses, unlikely to "take a chance" on something as hyped as this without ironclad guarantees from the state.
3. Answer - Ratepayers, with maybe a smidge covered by the AI and Crypto-bro companies.
4. Answer - Ratepayers, and probably taxpayers nationwide.
5. Answer - Rates go up, probably by a lot.
6. Answer - No. Problematic when you consider how eager investors are for AI facilities in places like Texas, Arizona, southern California, Nevada etc.

That's the best-case short-term scenario.

The worst-case long-term scenario is that the hype and bullshit attendant upon Shiny New Tech Big Money Thing succeeds and much of it gets built. With new NG coming on line en masse, with coal retirements postponed and old coal plants taken out of mothballs, this means that whatever vanishingly small chance we had of dodging the
double climate canister at 50 yards that Gaia is loading for us drops to zero.

But hey, we got to dream about Shiny New Tech Big Money Thing for a while, and writing term papers got marginally easier, and a few people you wouldn't lend your phone to got really, really rich.