Politics hits data centers, OpenAI falls behind Anthropic and now AI is too big to fail… quietly

Data centers, of all things, now look like they’re going to be a prime political issue in the midterm elections and beyond. Really?

Really. Even the GOP is worried that opposition to AI data centers could give Democrats a potent campaign issue. It seems a little odd given that data centers are decades old, power our iPhones and the whole internet, and no one raised issues before. Sure, there’s a whole lot more of them being built and more proposed, and yes, they can have environmental issues and they don’t employ many people, but on the face of it, big buildings seem like an odd nexus of left and right opposition that goes beyond those issues.

And it does. To my mind, the data center backlash really about what they’re for: AI. For all the undeniable benefits, AI is getting shoved down people’s throats by big tech companies, many of which are eager to tell people how many jobs it’s going to eliminate. Stopping data centers won’t really stop AI, but it could be the pin to the AI bubble.

Meanwhile, it’s apparent that big tech is spending a lot more than it looks, according to a Wall Street Journal analysis — $3 trillion more thanks to off-balance-sheet commitments. Moreover, those making the AI chips need money themselves to build for all that demand, such as Broadcom,  reportedly aiming to raise as much as $100 billion in debt financing. All this raises concerns anew about whether profits will ever come. In any case, the stakes and risk keep rising, to the extent that the AI buildout, says Dave Vellante, is now too big to fail… quietly, at least.