Comment by jmyeet

Comment by jmyeet 3 hours ago

11 replies

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There are actually a ton of problems with the energy use of AI data centers.

1. Exploiting local laws to basically pollute in essentially residential areas. This is what's happening with Grok's Memphis DC [1]. The gas turbines count as "mobile" so don't need the same pollution controls;

2. Domestic electricity production is heavily natural gas dependent. This is significantly better than coal but obviously not as good as renewables. But we are creating all this new demand for natural gas that is going to do nothing but drive up the price for everybody. This isn't just data centers. It's the policy of massively increasing LNG exports; and

3. For those DCs connected to the local grid, dthey are essentially getting residential customers to pay for the infrastructure and to subsidize the energy usage. Thing is, we've been here before [2].

So we have people with less income because company spend is moving to AI and the money those people have is being further eaten away by higher electricity prices. This is going to be a problem long before the CO2 emissions will be.

[1]: https://www.politico.com/news/2025/05/06/elon-musk-xai-memph...

[2]: https://bfi.uchicago.edu/insight/research-summary/when-crypt...

Aurornis 3 hours ago

> 3. For those DCs connected to the local grid, dthey are essentially getting residential customers to pay for the infrastructure and to subsidize the energy usage

This is not the case for any well run utility. Commercial customers will pay their share and have their own rates.

Residential power rates are heavily regulated and require a lot of work and justification to raise.

The one case you’re citing appears to be some failure or perhaps corruption. It’s not a universal rule.

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  • jmyeet 2 hours ago

    I don't know what to tell you other than this is well-established [1][2][3][4].

    Also, what exactly is a "well run utility"? IMHO all utilities should be municipality or state owned. All privatization does is transfer wealth from the government and the not-wealthy to the already-wealthy. I suspect you might not agree however.

    There are caps on how much utilities can charge but they're allowed to absorb capex (eg by building new transmission lines to a new DC) and if the utility has to buy electricity on the spot market because of increased demand (as was the case with crypto mining in upstate New York), then that raises the per-kWh cost of electricity for everyone, which is great in a cost-plus model.

    We've seen this exact thing with healthcare insurance premiums. By law, a certain percentage of premiums has to be spent on giving care. Sounds good, right? So how do you, as an insurance company get around that? You push for higher premiums because that same percentage of profit now means more money. And how do you increase healthcare spend to keep that percentage intact? By spending with providers you also own.

    [1]: https://www.bloomberg.com/graphics/2025-ai-data-centers-elec...

    [2]: https://energyathaas.wordpress.com/2025/09/29/what-will-data...

    [3]: https://www.techpolicy.press/how-your-utility-bills-are-subs...

    [4]: https://substack.perfectunion.us/p/how-data-centers-are-driv...

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    • gruez 2 hours ago

      >I don't know what to tell you other than this is well-established [1][2][3][4].

      counterargument: https://www.economist.com/united-states/2025/10/30/the-data-...

      https://www.economist.com/content-assets/images/20251101_USC...

      >What about elsewhere? The Economist has adapted a model of state-level retail electricity prices from the Lawrence Berkeley National Laboratory to include data centres (see chart 2). We find no association between the increase in bills from 2019 to 2024 and data-centre additions. The state with the most new data centres, Virginia, saw bills rise by less than the model projected. The same went for Georgia. In fact, the model found that higher growth in electricity demand came alongside lower bills, reflecting the fact that a larger load lets a grid spread its fixed costs across more bill-payers.

      Bloomberg's methodology seems to be "price rises are higher the closer to datacenters there are, so datacenters are causing price rises", but that seems like it's subject to all sorts of confounders, like those places being more desirable to live and therefore labor prices are higher.

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simianwords 3 hours ago

This is going to be the problem with any new construction or infra project in general. If you buy a big plot of land for a new shoe factory - you will need energy, real estate and many other things which will drive prices up.

I'm seeing a big push back from just normal infra building but no one sees the other side - demand for AI is met. Taxes are paid. Jobs are secured.

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  • jmyeet 2 hours ago

    At least a shoe factory will employ people and produce something people will buy. After a DC is built, it only needs a handful of people (compared to the capex) and as for its output? We just haven't seen AI create a service or product people really value and will pay for.

    This is really the most alarming thing about the AI boom: it's so much like 2000 and the dot-com bubble because so many companies never had a business model or revenue let alone made a profit.

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    • simianwords 2 hours ago

      > We just haven't seen AI create a service or product people really value and will pay for.

      That's not something you have to worry about because the risk is taken primarily by the companies themselves. ChatGPT has around 800 million weekly active users. That is humongous, considering such a new technology.

      I wonder what your stance would be if the companies do start making profit and become rich through data centres. If that happens are you okay? Because I see that also a problem that people propose - companies getting too rich and extracting wealth. What’s the ideal situation?

      In any case, I find this anti infra building a bit annoying if I may be direct. People want AI. Data centres are built to meet the demand. Profits are likely.

      Reply View 2 replies
      • jmyeet 2 hours ago

        If only that were true.

        The likes of Google, Meta, Microsoft and Oracle will survive by cuttings costs (ie firing people) and probably getting bailed out by the government, either with direct loans or simply with government contracts.

        We're already seeing massive increases in homelessness. Now imagine if unemployment goes to 8-10%. We had higher unemployment in Covid but the government opened the money faucet to avoid a complete collapse. Unemployment peaked at around 10% in the GFC and it was both a massive wealth transfer to the already-wealthy and a massive decrease in real wages as entry-level positions disappeared.

        You don't spend trillions in corporate investment to have the bubble collapse and society not to feel the pain.

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gruez 2 hours ago

>But we are creating all this new demand for natural gas that is going to do nothing but drive up the price for everybody. This isn't just data centers. It's the policy of massively increasing LNG exports; and

Can't you make the same argument about anything consuming a scarce resource? Airplanes suck they use oil and make gas prices more expensive for drivers! Amazon sucks because their delivery trucks use oil and make gas more expensive for drivers! Of course, you can argue that airplanes and amazon provide some sort of value and therefore it's worth the consumption/price rises, but that just ends up being a roundabout way of saying "I hate airplanes" or whatever.

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bob1029 2 hours ago

The pollution issue isn't really possible to solve without using a proper power plant with a tall stack on each unit.

The portable gas turbine units are already very efficient and have surprisingly good emissions controls. Especially the aero derived variety. The problem is dumping the exhaust at ~ground level. This can create hotspots of nitrogen oxides. Especially with so many units running at once. If you exhaust at 100'+, the chances of hazardous accumulation are negligible by comparison.

There's really no clean way to do this fast. You typically need FAA approval to build a stack that would be tall enough to be effective. The best hope for local residents is a rapid crash sometime soon.

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