But electrical infrastructure—the generation plants, transmission lines, substations, and distribution networks that convert fuel into computing—operates on a five-to-ten-year timeline that no amount of financial engineering can compress.
hmm, sounds like someone should have had a 5 year plan 
What I learned from all the business studies modules I've had to take in university is the whole economy runs on a 5 year programm except diversified and unconnected
And ignored, even?
Market anarchy
Thank goodness we change leaders every 4 years. Guaranteed to never complete a five year plan
BuT ThaT's AuThoRiTariAn!
meanwhile, china, smoothly integrating data center infrastructure as a part of other infrastructure planning
Absolutely hilarious to watch the whole markets beat central planning narrative collapsing now. Although, caveat is that China uses central planning at the top, and markets as an allocator within the plan. Actual material analysis vs pure dogmatism of the west.
This comes to the conclusion that AI is not a bubble and will not collapse. It argues instead that it's growth is speculative and has inflated well beyond the ability for infrastructure construction to meet that speculation, but that this will correct itself in the market and continue growing after correction rather than collapse like you'd expect a bubble to.
I don't think that's true. It's not including the need for the AI companies to demonstrate profits. OpenAI can't exist on investor money forever, it needs to be generating $285bn annual revenue by 2030. And that's just one company.
These AI companies are going to collapse underneath their own lack of ability to monetise because nobody wants it. The investment money to build new AI shit will collapse when others demonstrate it can't monetise. Then the power infrastructure growth will collapse behind it. What remains will be a shell of the AI industry we see today.
Yeah, it's very obviously a bubble, and I think the very fact that they can't deliver on infrastructure investments might be what causes the VCs to start pulling money.
It's a very obvious hard limit. Growth can't be delivered above that hard limit so the entire market needs to correct to at least that limit. That's the guaranteed minimum correction point, the rest of the issues will make it bigger.
Something we don't talk about much is that all of this investment money doesn't magically disappear when they sell these shares. They pull their investment out of AI and they put it into something else. What's the next likely thing that they put it all into? What is the second largest growth industry that isn't AI? Or do they cook up a whole new thing?
The last couple decades has been a series of techbro investment fads. Cryptocoin, NFTs, Metaverse, AI -- it's quite possible that a whole new fad takes its place.
Yeah that's certainly a possibility, but the elephant in the room is that material conditions continue to deteriorate, and that's translating into increasingly volatile situation. Something is gonna have to give eventually, and it's not gonna be pretty when that happens.
God willing
the need for the AI companies to demonstrate profits.
This is according to capitalist theory but now that we're in fascist space it's possible that AI companies are propped up by subsidies (that might "guarantee profits" to dress the operation in capitalist garb and keep the fantasy going) while just being tools for data collection and surveillance to aid in repression and consolidation of power by the aristocrats, or whatever the small ruling class will be called in post-capitalist America.
Hopefully I'm wrong, and wouldn't it be ironic if capitalism, or at least a need to generate profit, is what actually saves us?
I don't see how they can guarantee profits of a company that needs revenue of $285 billion. Google's revenue last year was $350 billion, total.
There is absolutely no way that they achieve this and the government can not afford to subsidise the industry to that kind of amount.
See the problem here is that you are sane and rational.
After the bankers' gigantic, compounded fraud blew up in their faces in 2008-2009, Obama came on TV and said that the government will not step in to bail out people who were underwater on their mortgages, no matter how fancy and ridiculous the loan terms were. This would have cost approximately $1.3 trillion, and the reasoning was that bailing them out would set a bad precedent; that one could take out a loan (or be the victim of fraud and deceptive practices) and not pay it back.* Instead, it was decided that the banks would be bailed out, and the cost for that has been estimated at between 12 & 16 trillion dollars. I know you know this but a trillion dollars is a thousand billion dollars. Just an insane amount of money, not to mention it's been 10x the amount it would have cost to put millions of Americans into the security and stability of home ownership. In the spirit of American style central planning, the extremely wealthy were made even more wealthy as a result of their abysmal performance at... central planning (designing an economy that not only allowed but rewarded the actions that led to 2008). Between the policy of "we (the fed) buy your (private bank) trash (debt) for 100 cents on the dollar at whatever face value you (private bank) decide" QE and the fact that the US has a sovereign currency which is the global reserve currency it means that the US can "afford" literally whatever it wants, and "the US" now means Trump and his cronies.
I'm not saying this makes sense (what you are saying is what makes sense), I'm saying that I don't think it has to make sense anymore... as if the past 20 years have "made sense" financially.
Astrid Atkinson, CEO of Camus Energy, estimated in a Utility Dive interview that Texas is seeing “five to ten times more interconnection requests than data centers actually being built.”
One must imagine Sisyphus building data centers.
TIL Texas is the largest energy-consuming state in the nation
It absolutely is. Around 2022, or 2020(?), we had a giant blizzard that even coated the arid oil wasteland part of Texas I live in, in snow. It resulted in outages and rolling black-outs for days. Absolutely terrible. It's gonna happen again, catastrophically, when the data centers arrive. Lol
i shamefully contributed to the wasting of water and electricity yesterday by spending hours upon hours with chatgpt trying to add some new features to opensnitch that i've always wanted... what a nightmare of a process it was, but after about 6 full hours we finally nailed it
You deserve a promotion. After we lay off your other co-workers who did not incorporate agentic workflows into their routine 
you jest, but i was actually laid off 2 months ago for almost exactly that reason
I'm also partially not jesting (as in I was in the same sort of boat) and I'm so fucking mad, barely containing it.
i'm sorry to hear that, it fucking sucks for sure
Its not that bad compared to yours, basically I was banking on a job position at my uni and then the department got defunded because they put that money into their new fangled ai institute, so unless I want to work for free theres no more hiring.
They're squeezing all the grad students for everything they have and they didn't even have much in the first place. The good news is that everyone already in ai is being treated like they're chatgpt whisperers or some shit, I guess that counts.
Very interesting article but it seems to be ignoring the elephant in the room which is that the capitalist is lying in order to fleece the public, not least through a government "bailout" aka give me money for failing. If a reporter (or even an average schmuck in this case) can do quick napkin math to see that the numbers aren't even in the right ballpark then the capitalist as well knows that, as they are generally obsessed with this sort of thing.
The contract in question—a five-year, $300 billion cloud computing agreement between Oracle and OpenAI announced in September 2025—represents the largest technology services contract in history. It commits Oracle to building, equipping, and operating 4.5 gigawatts of data center capacity as part of the Stargate joint venture, with revenue recognition beginning in 2027. The scale is almost incomprehensible: $60 billion in annual payments, sustained for five years, from a single customer.
That single customer is OpenAI, a company currently generating approximately $13 to $15 billion in annualized revenue while losing approximately $9 billion per year. OpenAI’s internal projections, obtained by Fortune, show cumulative losses of $115 billion through 2029. The math is stark: OpenAI must grow revenue approximately fivefold in two years—from $15 billion to $60 billion annually—merely to meet its Oracle commitment, let alone achieve profitability.
No technology company in history has achieved such growth. The closest comparison is Nvidia itself, which grew from $27 billion in fiscal 2024 revenue to approximately $130 billion in fiscal 2025—but Nvidia sells physical products with clear unit economics to customers with immediate use cases. OpenAI sells subscriptions and API access to customers whose return on AI investment remains, by most surveys, deeply uncertain.
Using Nvidia as the only one that made it in this example is kind of misleading, as the only reason they achieved that growth and give credence to the scam is via the scam itself.
Idk, the attitude of "well golly shucks how in the world will they pull this off?" kind of pisses me off because this is a scam, everyone can see it's a scam, let's stop pretending it's not a scam and take those hundreds of billions of dollars and instead of burning it let's provide every American with a home that has a (second hand / reclaimed / repaired) refrigerator and washing machine, and a (second hand / reclaimed / repaired) computer with high speed internet. Or even healthcare. Or even fucking enough food....
oh for sure, it's pretty clear this is a giant speculative bubble that will pop inevitably because the promises are directly at odds with what's physically possible
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