The AI “cloud” sounds weightless. But behind every chatbot, every prompt, and every promise of a coming AI revolution is a massive physical footprint: hyperscale data centers consuming enormous amounts of land, electricity, water, and public subsidies.
This week, Nick and Goldy talk with Tim Murphy, national correspondent at Mother Jones, about his cover story on how the American oligarchy went hyperscale in the age of AI. Murphy has been reporting from communities across the country where residents are watching enormous data centers rise in their backyards, often with little transparency, few long-term jobs, and huge demands on local infrastructure.
The result is a familiar story: public risk, private reward. Tech billionaires get the profits. Communities get higher utility costs, depleted resources, tax breaks they may never recoup, and facilities that could become tomorrow’s stranded assets when the AI bubble bursts.
AI may be new. But the economic model behind this boom is very old: extract from communities, concentrate power at the top, and call it progress.
Tim Murphy is a national correspondent at Mother Jones.
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Mother Jones – How the American Oligarchy Went Hyperscale
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Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Goldy:
The last five decades of trickle-down economics haven’t worked, but what’s the alternative?
Nick Hanauer:
Middle out economics is the answer because the middle class is the source of growth, not its consequence. That’s right.
Announcer 1:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Goldy:
Where are you, Nick? You’re in Seattle with me, right?
Nick Hanauer:
I am. Seattle Washington, USA.
Goldy:
And it’s a lovely spring day atypical for Seattle, not a cloud in the sky.
Nick Hanauer:
Yeah, exactly. And today we’re going to talk about clouds, and cloud is such a harmless sounding thing, isn’t it? It’s light, it’s airy.
Goldy:
Yeah. It’s like it’s not there except actual clouds are real. They’re filled with water vapor and sometimes-
Nick Hanauer:
Clouds are good for the world.
Goldy:
That’s right.
Nick Hanauer:
What would we do without clouds?
Goldy:
Right. But we’re not talking about that kind of cloud, are we?
Nick Hanauer:
Yeah. We’re going to talk about the AI cloud, the data centers that people are building everywhere to power the AI boom. And that cloud is definitely not ethereal and harmless. The cloud that we’re building involves the kind of physical infrastructure that I think it’s almost safe to say the world has never seen before.
Goldy:
Right.
Nick Hanauer:
Buildings so large that they stagger the imagination consuming so much power that it’s beyond precedent.
Goldy:
I think you’re pointing out something which is something we don’t really think about in the tech world because we are accustomed to the dematerializing of the economy, right?
Nick Hanauer:
Yeah.
Goldy:
In the information age, information is not physical in form, but of course to store it, to transmit it, to use it actually requires physical infrastructure. And the reason why we don’t think about it is that most of us don’t see it. It’s the cables and the fiber that’s underground that’s stringing along the telephone poles, but also now to feed-
Nick Hanauer:
Yeah. But it used to also be servers too, right, to be fair?
Goldy:
Right. Yeah. But servers are there-
Nick Hanauer:
Yeah. But just as a scale-
Goldy:
… but we’re not seeing them, but we also weren’t building them at the massive scale that they’re being built to fuel AI or as it’s now called, not just… It’s hyper scale, because we have to add that word hyper, and it doesn’t even do it justice in terms of the amount of physical material that goes into it.
Nick Hanauer:
What’s happening around the country is that people are waking up to the fact that their communities are being transformed by the addition of these giant facilities adjacent to them. And that transformation, while it may have some positive effects, also has huge negative effects that the community is asked to bear for a very nebulous benefit. And today on the pod, we get to talk to somebody who has learned a lot about this.
Tim Murphy, who’s a national correspondent at Mother Jones, spent what appears to be a big proportion of his life recently traveling around the country talking to people and witnessing the evolution of this AI boom and how it is physically affecting the places where it is appearing.
And it’s a super interesting story. It speaks to a lot of the issues we cover in the pod about plutocracy and inequality and a world in which a few people benefit and most everybody else gets screwed. So with that, let’s bring Tim into the conversation.
Tim Murphy:
My name’s Tim Murphy. I’m a national correspondent at Mother Jones Magazine and I’m here to talk about my cover story for our May, June issue on newsstands now about how American oligarchy went hyperscale in the age of AI.
Goldy:
We have one of those oligarchs here, though not an AI oligarch.
Nick Hanauer:
If only.
Goldy:
If only. All right, because you’re not rich enough.
Nick Hanauer:
So Tim, we read with interest your really interesting article where you excavate the physical impacts, if you will, of the AI bubble. Maybe it didn’t catch you by surprise, but it caught the rest of the world by surprise. Usually these tech waves happen in bits, not atoms. And this one is happening in atoms as much as bits and the impacts I think are beginning to be felt and recognized. So why don’t you just tell us a little bit more about that and what you found in your reporting?
Tim Murphy:
Yeah. Actually, as I read this and I started working on this, I had this classic early WIRED story from Neal Stephenson, the novelist, and they devoted the entire issue to it. When they were laying a transatlantic fiber optic cable and his entire deal was he just followed the cable to its endpoint and he just wrote about every single thing that went into the physical internet. And I had that idea in my head when I was thinking about the AI boom that’s being pushed right now.
And I wanted to get a sense of what that actually looks like and what that feels like, not on your smartphone, but in your community and in your backyard. And I think what’s been really interesting is that a lot of people, millions and millions of Americans, the way they’re experiencing the AI boom at the moment is not necessarily through their office, through their smartphone.
It is through their community and their reaction to the physical infrastructure of it in the AI hyperscale data centers. And so what we’ve seen starting in around 2023, 2024, and rising and rising ever since is a building boom with little precedent in modern times, the evocative of things like the transcontinental railroads of these massive companies competing to see who can build the biggest, most powerful structure in the most places the fastest. And that is having major repercussions in communities across the country.
Goldy:
Yeah. It’s interesting you started by mentioning fiber, that we had one of these booms, but that was very different because it was invisible. It was all buried and it was mostly that infrastructure was being put in along existing right of ways so it was not disruptive to communities.
But of course the whole internet that followed, even though there was a crash in that, was built on that fiber infrastructure, which is still invisible. This just must be overwhelming in some parts of the country in terms of the amount of physical infrastructure and the disruption in building it. If you could go into a little bit of what’s actually happening at the community level?
Tim Murphy:
Yeah. And in certain parts of the country and particularly in Northern Virginia, it really is overwhelming. We had some incredible photos in the piece, which you can read at motherjones.com, of a baseball field at a elementary school in Northern Virginia, and there’s just a massive Amazon facility or something like that towering over it. It’s everywhere these communities are running out of spaces where they can actually develop these data centers.
And NOVA is a unique place in some respects because there just is going to be a demand, and because there is a geographical reason for there to be a massive data center industry because of government, because of fiber optics. But across the country in communities that are being targeted by speculators, by third party agents for hyperscale sites, people are furious at the demands that are being placed on them and the facelessness that they perceive from the companies that a lot is being asked of these towns and they’re not even really getting the dignity of knowing who’s asking because everything is being done under NDAs. And there are, to some extent, explicable reasons for a large corporation to do everything under NDAs, but-
Nick Hanauer:
Wait, it hides the corruption.
Tim Murphy:
Yes, that’s certainly a sentiment that you would get at a town hall. If you go to any community meeting in the United States over the last year, people just wondering who the heck is building this thing that is necessitating billions of dollars in tax breaks. And they are enormous. They’re measured in units of Manhattan.
Something like the OpenAI Stargate facility in Abilene, Texas, just outside of Abilene, is about the size of Central Park. And if you drive by it at night, as I did last summer, it feels like you’ve discovered a secret base under construction in an alien movie or something like that. They’re not some early Microsoft data center in Redmond, Washington. They’re the size of airports basically. And so they feel like you’ve built something enormous and completely different in the middle of a community that’s really not used to that.
Nick Hanauer:
Wow. And one of the things that the world is waking up to, and certainly these communities have woken up to it earlier, is that the impact these things have on electricity prices and water availability because they require so much resources, right?
Tim Murphy:
Yeah. And there are solutions to different extents for some of the different problems that are raised by a hyperscale data center. For instance, in their first under construction, one of the stories you saw a lot was how much water they use. Well, it turns out you can design them so that they don’t use as much water.
The way you do that is you use a lot more power, and that’s one of the major complaints that you get is just how much power is needed for a hyperscale data center. Literally onboarding, reopening nuclear power plants like Three Mile Island in Pennsylvania power a Microsoft data center, the Meta Hyperion campus, because they’re all named for Greek mythology in Richland Parish, Louisiana.
Goldy:
But they haven’t learned any lessons because they use names like Icarus. What happened?
Tim Murphy:
Yeah. That wasn’t included in the AI summary of the story.
Nick Hanauer:
Yeah, but the names come out of a bad James Bond movie, right?
Goldy:
Yeah, or AI apocalypse stories.
Tim Murphy:
I was just going to say, in Richland Parish, Louisiana, they’re building two natural gas plants on site directly across the street from this Central Park size data center right next to a church, right next to this lovely old lady that I spent time talking to about it. They’re adding tons of carbon into the air in communities and they’re driving up utility prices. And so now there’s a push to build more and more of these power plants behind the meter, but they’re opening up all sorts of big questions about who these public resources belong to, what kind of infrastructure we should be prioritizing and actually building.
Goldy:
Do you know what the mix is in terms of the power demand between powering the processors and cooling the processors?
Tim Murphy:
No, I don’t have that breakdown in front of me, but in order to develop these technologies so they’re not just sucking up all of the water out of West Texas or a disproportionate number are being built in water-scarce areas like West Texas, like Arizona.
Goldy:
And hot areas. They’re building it in the hottest parts of the country mostly.
Tim Murphy:
Yeah. And that correlates to you can just build anything in West Texas. You can build this nuclear-powered Rick Perry startup outside of Amarillo. You could just build things, but because you’re doing this in these water-scarce areas, you’re having to spend even more money and use even more power in order to maximally conserve your water resources there.
Nick Hanauer:
New industries are the story of civilization, I suppose. This is not the first time that big new industries have come into communities and disrupted them, but I feel like this is slightly different because it seems so obvious that this technology is going to benefit a few people and not everybody. It’s really obvious how these things will benefit Elon Musk and his shareholders and…
Goldy:
Assuming they’re the ones who win, because they’re not all going to win. We’ll get to that in a moment.
Nick Hanauer:
That’s true. And for your ordinary person, it’s cool to be able to use AI to help you write a letter to your lawyer or something like that, but it’s definitely not going to put more food on the table or help your kids lead a better life or anything like-
Goldy:
Let’s talk about the way it’s sold to communities. Obviously, if they’re getting tax breaks, it’s to create jobs. It’s always about creating jobs. Obviously, there are a lot of jobs created in constructing these massive facilities. What type of jobs are created for these communities once they’re built?
Tim Murphy:
It’s really striking. Take this community in Louisiana where Hyperion is being built. It’s one of the largest data centers ever built. I think there’s something like 11 buildings and two power plants and whatnot, requires a lot of engineering and will take years to come online. So there will be thousands of construction workers over successive waves. And so you’ll have different groups of thousands.
You’ll have the initial crew who are the earth movers and they’re hauling in dirt and gravel from all over and they’ve had to set up man camps, and everything is an RV park now and there’s food trucks everywhere to feed everybody in this small, poor, rural parish. They’re going to leave and then a new group of several thousand people will come in to put these buildings together. You’ll have even more highly skilled technicians who are actually assembling a cutting edge Silicon Valley data center.
So you’ll have many, many people actually putting this project together and those are construction jobs or engineering jobs and those are all inherently short term. When this thing is actually up and running, if it is ever fully up and running to the scale initially promised, you will have a lot fewer people. I don’t know the numbers for Meta off the top of my head, but for Abilene, this OpenAI Stargate project, the actual guarantee for number of jobs that they’ll have for a comparably sized hyperscale facility is around 100. Now, it could very easily be more than that.
Nick Hanauer:
It could be 200. Yeah. But who cares?
Tim Murphy:
Right. But it could very easily be more than that, but it’s very, very unlikely to be-
Nick Hanauer:
It’s not going to be 20,000.
Tim Murphy:
Yeah. It’s not going to be the same as if you built an automotive manufacturing facility, which is what was originally what the site in Louisiana was intended for. They hoped that they were going to lure Hyundai by turning this cotton plantation into an economic development site. They never got the car company. 10 years later they get a data center, and the difference between those two job profiles is pretty enormous.
Nick Hanauer:
100 jobs versus 10,000 or something like that. Interesting.
Goldy:
And you mentioned if it ever does get built to the full capacity. It strikes me, you used the term cutting edge, these cutting edge data centers. For how long do they remain cutting edge before the technology is obsoleted?
Tim Murphy:
Yeah. One of the tenets underpinning this, and you’ll see somebody like Sam Altman talk about, is Moore’s Law, which is not a real scientific law. It’s just a article of faith that high-end computing chips will double their capacity roughly every two years. And so there is this enormous built out based on a 2024, 2025 understanding of what you need to build out and not just based on your sense of what you currently need, but also just an enormous guess about what the future needs will be or even just a deliberately bloated target based on your desire to put together an impressive market sheet or to intimidate your rivals.
So there’s all this sense where they’re throwing out numbers, $500 billion of investment. I think Mark Zuckerberg said to Donald Trump at the White House dinner they had together last year, something similar for Sam Altman, where they’re just throwing out enormous numbers, and it’s not really clear to what extent they’re real. And so if you’re in a small town, and I watched a community meeting like this in Wisconsin, and you’re being presented with a giant hyperscale project from an invisible third party, you don’t know who it is.
Well, you do really have to wonder, is this going to be one of the real data centers or is this going to be one of the ones that is maybe just on the books for a few years while we figure out if we need them? And so people really don’t want to be the town that’s left holding the bag when this all goes away or if this all goes away.
Nick Hanauer:
Yeah, because if the music stops and somebody’s built a Central Park size structure next to your town, what do you do with it?
Goldy:
It’s very different again, going back to the fiber analogy. We had that overbuild of fiber before the dotcom crash that was part of that crash and we had all that dark fiber, but 10 years later that fiber wasn’t dark anymore. It didn’t go away. It was still usable. That’s not true, certainly at least the GPUs that are in these data centers. If this is a bubble and things stop, what is the value of these facilities to these communities, to anybody?
Tim Murphy:
It’s a very large, painful course.
Goldy:
Well, that’s fun at least.
Nick Hanauer:
It’s one of 20,000 pickleball courts indoors.
Tim Murphy:
One of the interesting examples in this town, Menomonie, Wisconsin that comes up at this community meeting, everybody there is thinking about Foxconn, because on the other side of the state, about 10 years ago, Scott Walker dangled billions of dollars in incentives for this Chinese manufacturing company to come, and it was going to create 13,000 jobs, and that was hailed as a godsend for the de-industrializing Midwest. It created maybe 1,300 jobs. It was an enormous boondoggle.
It probably brought down Scott Walker, and it’s now the poster child for over-promised tech manufacturing jobs that are going to save your community. And ironically, what ends up popping up in the Foxconn footprint in Racine, Wisconsin is data centers, Microsoft data centers, because it’s not actually the thing that you land when you want to bring in a ton of jobs. It’s the thing that you land when you couldn’t bring in a ton of jobs, but you still had this footprint.
Goldy:
So let’s talk about the end game here. Obviously, it’s a handful of tech billionaires who are competing with each other to be the dominant player in… We’re not talking about chatbots here in the end that they’re trying to build. They’re trying to build actual artificial general intelligence, right? Obviously they all can’t win. This is going to consolidate down to one, two, three major players. What is it that the Zuckerbergs and Musks and so forth, what’s their vision of the future? It’s the end of democracy? They’re our new overlords?
Tim Murphy:
This is something that comes up a lot in their public manifestos of which they keep producing time and again, particularly Altman and Dario Amodei, and it’s something that comes up in their correspondence with each other, which we’ve seen a lot of, for instance, with the ongoing court case between Sam Altman and Elon Musk, that originally centers on this mutual idea that they shared that Google was going to create this all powerful AI that was going to control the world and it was one guy was going to be in charge of this and we couldn’t afford to do that because we had to stop that.
They had to do a Fellowship of the Ring type deal and they had to band together and develop AGI first basically. And so that’s why they created OpenAI. And as you saw over the course of that experience, none of them trust each other. They don’t trust anybody else. And so you have this inherent skepticism of everybody else in this industry getting too much power that drives them all to be the one to acquire all of that power because they don’t trust their competitors to develop artificial intelligence.
Nick Hanauer:
Yeah. A bunch of psychopaths competing with one another for power. What could go wrong?
Goldy:
Well, look, if one of your competitors gets too much power, it’s nothing that a couple drone strikes couldn’t fix. I’m joking, but I’m not joking. I wonder at what point they start declaring war on each other since they certainly seem to think they’re more important than nation states at this point. I don’t know. Tim, it doesn’t make me confident about the future.
Tim Murphy:
No. And I think some of that is built on maybe them over-hyping their own technology. It’s not like we’re saying this from Elon Musk’s Mars base right now, but it does speak to I think the genuine sense that some of these tech founders have that they really are the person-saving civilization and that it really is incumbent upon them to do this. I don’t know that that’s as true of Mark Zuckerberg as it is of Elon Musk or Sam Altman necessarily. I think Zuckerberg would be happy maybe if we all just had Ray-Bans with cameras on them that hooked up to his latest AI model.
But I think what you’ve seen and then over the last couple of election cycles is what’s happening in tech with AI is fused with a political development inside the Republican Party where you have these people who are building a new civilization, and tech have joined forces with people who want to save a particular idea of American civilization and they’ve found a common ground and a a techno manifest destiny with AI playing the part of the transcontinental railroads.
And that political alliance, which has contributed hundreds of millions of dollars plus the Department of Government Efficiency has had enormously destabilizing impacts on the democratic process on the United States as a whole. And it’s something that I think will continue heading into the midterms.
Goldy:
Thiel is open about this. He wants to destabilize democracy. He thinks democracy is a bad idea. Is that part of the end game?
Tim Murphy:
Certainly for Peter Thiel, he felt like American democracy was something that needed to be completely broken up. He had his own alternative ideas, but even with Donald Trump, I think it’s been reported his fear was that Trump would not break things enough for Thiel’s own demands. We’ve seen Elon Musk getting in and treating the federal government like one of his companies, we’ve seen what that looks like.
You take somebody like Sam Altman, who I think he now describes himself as politically homeless, which he might just be saying for political reasons to be a little bit more flattering to the Trump administration. He’s somebody who’s also talked about how AI will necessitate some deep societal change. We’ll have to completely rethink how we tax and how we spend and how we allocate wealth to society. So I think the people driving this very much do think that they’re producing something deeply destabilizing that will lead and necessitate a radical response.
Nick Hanauer:
Yeah. I wonder if they’re counting on swinging from lampposts themselves, which I think is going to be part of the end game here.
Goldy:
I’m glad you said it, Nick. Because I feel whenever I say something-
Nick Hanauer:
I think it’s going to get Bad Mary and people are going to be mad and they’re going to want blood. What’s unfolding in communities? What’s the trend?
Tim Murphy:
The trend is that if you are coming to a community with a proposal for a data center in 2026, you are going to get booed. You are not going to meet a welcome reception. And now these are still getting built and most of them are still getting built, or at least most of them are being green lit. But in the first half of just last year, something like $94 billion worth of data center projects were paused or scrapped based on community opposition. It’s happening all across the country and it is leading up from that ultimate grassroots level up into the political level where Alexandria Ocasio-Cortez has now called for a full moratorium. So has Bernie Sanders.
And maybe you think, “Well, of course they have.” Josh Hawley and Ron DeSantis are vocally anti-data center within the Republican flank. And that’s going after that JD Vance-y and Silicon Valley alliance a little bit. So I think this has quickly become one of… It’s not a third rail of American politics. It’s something everybody wants to touch and hammer home that they don’t like these data centers and Silicon Valley is fighting a real rear guard action against that. Now they’ve started spending a lot of money on advertisements to try and pitch the public in a way that they didn’t really pitch them the first time along, because they’ve been doing this anonymously and through LLCs and stuff like that.
So Meta has now spent millions of dollars on ads after this vast pitch about how nothing will ever be the same and we’re changing the world. They now spotlight a small town in Iowa that has built data centers and it’s got Friday night lights and it’s got old people hanging out at the diner and the pitch is actually completely opposite. It’s build a data center and you won’t have to change. And I think that’s really striking.
Nick Hanauer:
Given that you’re now a global expert on all this, if you were going to give a community advice today, what advice would you give them?
Tim Murphy:
One of the things that I’ve been really impressed at, and you can watch a lot of community meetings and recoil a little bit. Sometimes, they can be a real den of conspiracies and certainly you get conspiracies here, but some people are really extraordinarily well-read, and you’ll watch this and for instance, they’ll be talking about data analysis on water and power usage that they read about in Bloomberg Business Week, or they’ll talk about the latest they heard on NPR or something like that. And so I think just actually doing your research on these things, the credible sources, really goes a long way and that’s the type of research of just showing up that is not often done. If you look at, and I was watching old footage of community meetings when this Abilene project was first coming up in 2021.
And it wasn’t with OpenAI yet, it was just this third party developer saying, “We’d like to build a data center here.” And there was a sigh of relief that they weren’t going to be building an ammonia plant because that would smell. And basically no one showed up. No one had anything to say. Maybe one person, a local gadfly, talked and bang the gavel, “Great, we’re going to build it.” If that had happened in 2025, there would have been hundreds of people there. And so it’s those two things of actually being informed and actually showing up is the difference between what’s happening in American communities now and what might have looked like at the very beginning of this story.
Nick Hanauer:
Fantastic. Tim, why do you do this work?
Tim Murphy:
I really like to go to random towns I’ve never been to before, but more importantly, I love to dig into a subject I didn’t really understand going in and just really get my hands into it and understand the world and be able to relay that information back to people.
Goldy:
I think when you look at the long history of economic development in rural and exurban communities, you see this interesting path. It used to be that you’d build some light manufacturing or heavy manufacturing, a car plant, something. And that is something that would generate jobs for working class people. You can have your farm and you can maintain the farm. People can be working on the farm and then going into the factory to make money on the side, this steady living, doing manual labor. Not unskilled labor. It’s skilled, manufacturing things. Obviously these weren’t always great jobs, but with the rise of the labor movement, they became middle class jobs and you could build a very good living and towns grew up.
Nick Hanauer:
And you can build a community around these things.
Goldy:
Right. Right. Because they employed a shit-ton of people. And then of course the de-industrialization of the 1970s, ’80s, ’90s, aughts devastated a lot of these towns that had come to defend on this manufacturing base. And to replace that we got Walmarts, and maybe you were lucky and you got a Costco. It became more a service industry job, which didn’t create as many jobs and they weren’t nearly as well-paying, but they did produce a lot of jobs. They did employ a lot of people and they provided services within the community. May not have been great for all the other retailers when a Walmart came in, but certainly for consumers-
Nick Hanauer:
You got something.
Goldy:
… you got something out of it, right? You can make an argument that it benefited the community in some way and you can see why a lot of these communities were desperate to go to Walmart. That was a boon to them at least as consumers. And now in this third stage of economic development, instead of a factory that’s going to employ 3,000 people or a Walmart that’s going to employ 600 people and sell you stuff cheap, you’re going to get this data center.
Nick Hanauer:
Yeah. Which is as big as Central Park, doubles your electricity bills, and employs 100 people.
Goldy:
Employs 100 people. They’re not farmers. These aren’t low scale. They’re bringing these people in.
Nick Hanauer:
Probably.
Goldy:
Maybe. It’s not like this is employing local people who are out of work. You’re not getting a job out of this once the construction of the data center is done. And you raised that important point about it’s actually raising your costs because of the incredible demand on the electric grid. This demand is growing so much faster than we are growing capacity, especially now with Trump spending billions of dollars to kill wind farms.
But also, I don’t know if you know this, Nick, in a lot of the country, the water utilities have been privatized too. So these aren’t public utilities and so it’s raising electricity rates, it’s raising water rates, it is raising property values in a lot of these places, just driving out the locals. And then at the end of it, you get this data center that will employ 100 people for, in the best case scenario, 10 years, 15 years, something like that. There could be an AI bust, that bubble burst and you’re not employing anybody and now you just have this giant facility that’s good for nothing where at least before you were growing cotton.
Nick Hanauer:
Something.
Goldy:
Look, you and I have differing opinions about AI. You love it because you think Claude can replace me.
Nick Hanauer:
No. Claude could never be as annoying as you, Goldy.
Goldy:
That’s right. Well, they’re working on it. That could be a feature. You can turn off the annoying…
Nick Hanauer:
Yeah, the annoying button. Yeah.
Goldy:
Right. You love it. I think I’m disappointed. It’s great at doing funny photos and stuff. I think it’s less useful right now than people think it is because it can help you with your research, but you can’t trust any of its citations. I think it’s amazing it can write as well as it does. It still sucks. And it’s not the AI that I was promised, which is that real artificial general intelligence where it becomes self-aware and then destroys humanity. But we have this differing opinion about how useful it is and I question the impact.
Nick Hanauer:
Yeah, put that aside. Put that aside.
Goldy:
But we can put that aside entirely.
Nick Hanauer:
Put that aside.
Goldy:
Because that’s not what this is about.
Nick Hanauer:
No.
Goldy:
This is about what it’s doing to individual communities.
Nick Hanauer:
Whether I’m finding AI more useful than you are is beside the point. It’s certainly hard to believe that for the ordinary American family, it’s going to do anything useful in terms of their welfare. At least directly. Indirectly, maybe AI will discover a drug that will be beneficial or whatever it is, but is it leading to children being better educated? No. Is it leading to a tighter knit community? No.
Is it putting more food on the table for the typical family? Absolutely not. And the downsides potentially are absolutely enormous. If there’s anything we can be sure of, it’s that Elon Musk, Sam Altman, and Mark Zuckerberg will not likely have to deal with the downsides, right?
Goldy:
Right.
Nick Hanauer:
They will be completely insulated from that, again, until the pitchforks come and they actually end up swinging from the lamppost.
Goldy:
You know what I see it as, Nick? And it seems weird because it’s high-tech and they’re building things. It’s a form of resource extraction. If you are a community with a giant hyperscale data center, they are extracting your electricity, they’re extracting your water, they’re extracting your land, but the profits from this are going to a handful of-
Nick Hanauer:
Elsewhere.
Goldy:
… tech bros, right?
Nick Hanauer:
Exactly.
Goldy:
They’re not really putting anything back and they’re not creating something that you’re directly benefiting. The point being that they could put that data center someplace else and you would benefit just as much from using the ChatGPT or Claude or whatever. So it is a form of resource extraction and I have a hard time seeing how that benefits local communities in the long run.
Nick Hanauer:
Yeah, I agree. Well, another day in the life of Plutocratic America.
Goldy:
Yeah. If you want to read more, we will provide a link to Tim Murphy’s piece in Mother Jones, How the American Oligarchy Went Hyperscale.
Freddy:
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