AI Bubble: RECKLESS Multi-$Trillion Data Center Buildout

本站添加: 2026-05-11

[00:00:00]Hi everyone, JJ here. Welcome back.

[00:00:03]Well, the expected multi- trillion dollar AI data center buildout around the world, but a lot in the United States is at the center of questions about the current AI boom/ AI bubble.

[00:00:19]So, that's what we're going to have a look at today. some recent talk about it, some recent posts about it, including this one from David Saxs, who has been the AI ZAR in the Trump administration, tech billionaire, and he talks about it. They talk about it on the All-In Pod. He's one of the four hosts, the besties on that. And he has this post here on X saying back of envelope numbers for 1 gawatt data center, which is pretty big. He says all in capex as capital expenditure about 50 billion. Enterprise revenue generated 25 to 30 billion a year. Electricity costs 1 to2 billion a year. And he says about 2-year payback. The boom is real. So there are a lot of questions and criticism about this including in the comments. He got grock to fact check this which is pretty, you know, pointless to do to get AI to check it.

[00:01:18]But yes, there's criticism about this.

[00:01:20]We're going to have a look at some questions around this. He doesn't talk about, you know, cash flow and profit and all that. He's just really build build is what they're talking about in terms of this boom/bubble.

[00:01:32]But we have here on the other side of it, this growing protest. Now, I've been reporting about this in videos, the buildout, the AI boom, the AI bubble, and the growing public backlash because, of course, some of these tech billionaires are saying like Elon Musk and others that AI is set to take all jobs or robots with AI will, you know, take all jobs. So, scaring the public.

[00:01:55]The other one is the got to have this AI race against China. But, you know, data centers being built in people's communities. There's a growing backlash, including this. Let's just get a taste of this. So, this is on breaking points.

[00:02:09]Shark tank host data center draws mass outrage. This is massive data center that Kevin Oolir wants to build in Utah.

[00:02:19]And this is some of the, you know, public distaste for it. This is a community meeting here where people are pretty irate about. It's a massive data center.

[00:02:29]>> False.

[00:02:30]>> All of this is false.

[00:02:32]>> Then why won't they let people talk? Why won't they let us out quick? IT'S FALSE.

[00:02:37]>> THIS IS NOT REAL INFORMATION. AND WE SIT HERE LIKE IT'S OKAY. IT'S A CHARADE.

[00:02:42]>> It's a charade. It's false.

[00:02:55]So at the center of this backlash are many things really including the noise from these things the power expense like power bills going up in some in some cases subsidizing part of the data center or part of the build when as David Sax says there himself it's going to make money so is this making money for tech billionaires and taking money from communities that's part of what people think that's going to happen >> so despite this kind of outpouring of opposition the project is continuing to move forward. Also, environmental concerns being spelled out.

[00:03:28]>> But how are you offsetting the how are you offsetting these environmental concerns?

[00:03:32]>> Well, I'm actually the only uh developer of data centers on Earth that graduated from environmental studies.

[00:03:40]>> So, I'm pretty aware of what these concerns are. They are around air, water use, heat, noise, pollution. Um, so sustainability is is at the heart of what we do in terms of all these proposals. We know not just Utah, we have 10,000 acres in Alberta, Canada with the same concerns. And so we search for the best technology. There's many air cooled turbines now. So you're blending in air cooled versus water.

[00:04:08]There's so many different ways to generate power. We can also put a percentage of the power generation through solar, wind, and batteries because the battery technology is 10x more efficient than it was just 5 years ago. So that's very helpful because it makes the cost of energy lower. So no one, you know, if you're environmentalist and you don't care about that stuff, of course you protest and that's what happens. I noted in, you know, what's happening in Utah right now is we think over 90% of the protesters are actually not people that live in Utah or Boxelder County. They're being busted in.

[00:04:44]>> Okay. So, fake protesters, he's saying, but you know, some of the environmental concerns, he's aware of it, but you know, not not really doing much about it or not saying exactly what's going to happen. Now, these data centers take a long time to build. They're massive. And so, he's just really pitching it here.

[00:05:01]So that's another side of it. And then we have this open AI secretly lobbying for government bailout. So if this is a bubble, if it goes bast like back in the.com boom when internet infrastructure was being laid, you know, it was a different kind of infrastructure, but there's definitely some physical infrastructure to build the internet. It was overbuilt. So is this going to be the same thing? This does seem pretty similar. History rhymes, right? So, is this what's happening here? And Open AI secretly lobbering for a government bailout. So, do they know do they know that this is going to go bust and they're really hoping for a government bailout which would make the public very angry, you know, after the GFC, the global or great financial crisis when the Wall Street banks were really the cause of this and they got a bailout because it was they were too big to fail going to take down the system. Is that what's going to happen with this as it gets bigger and bigger and bigger and more money is put into this? If it's multi- trillions, you know, multi- trillions being to 2030, that's kind of what people are thinking.

[00:06:07]That's what these banks are thinking at the moment. So, is a Open AI looking ahead here and hoping for a government bailout. Let's just look at a little bit of this from Wall Street Millennial.

[00:06:16]First, we need a quick refresh of OpenAI's original bailout requests in November. Sarah Frier said, quote, "We're looking for ways the government can come to bear. A backs stop, a guarantee that allows the financing to happen, can really drop the cost of financing and also increase the amount of debt you can take on." For context, Open AAI and its partners are planning to borrow hundreds of billions of dollars to fund a reckless data center buildout. Open AAI wants the government to effectively co-sign these loans with taxpayers on the hook for hundreds of billions of dollars of losses in the event that >> the taxpayers on the hook. there for a lot of money. Does that sound familiar?

[00:06:52]So, that's where it's at. And now, of course, Elon Musk, who I talk a lot about on this pod, Elon Musk XAI is failing. So, there have been recent news about this where he's joined with Anthropic, which he just a couple of months ago was calling Missanthropic, and now they're clients of his. So, this video talks a little bit about why his AI ambitions are failing, and of course, data centers are involved there, too.

[00:07:18]But before we get into that, do want to let you know about a new video on my other channel, which is Light Relief. If you're interested in this, I live in New Zealand, in case you can't tell from my accent. And so, I've got a channel, JJ's Authentic New Zealand. You can search for it on YouTube. I'll put a link in the description if you want to see. I visited Phar, which is near where I live. One of the iconic New Zealand spots, but not overrun with tourists, I should say. So, I'm looking at it from that point of view. You'll see if you take a look at that video. Let's see.

[00:07:48]Elon Musk, who's really at the center of this, one of the people. He's vying for it. He's jumped on this AI bandwagon, the AI boom, which so far isn't working out so well for him, but he's maneuvering and doing what he can and folding it into SpaceX. Let's see what they say here. Elon Musk is planning to take SpaceX public this summer at a reported valuation of 1.75 trillion.

[00:08:10]SpaceX on its own only generated $18 billion of revenue last year, which doesn't even come close to justifying this valuation. In an attempt to inflate SpaceX's valuation, Musk is trying to capitalize on the AI bubble. In early 2026, he merged SpaceX with XAI. XAI owns a social media platform, which used to be called Twitter, as well as the Grock AI chatbot. Musk has made bold claims about the current and future capabilities of the Grock AI chatbot, claiming that it will soon achieve artificial general intelligence and be worth trillions of dollars. The problem is Grock is not very useful and almost nobody uses it. In 2024, XAI borrowed tens of billions of dollars to build a massive 300 megawatt data center in Memphis, Tennessee. Because so few people use Grog, this data center is mostly sitting idle. In April, the information reported that the Colossus data center has a utilization rate of just 11%. In May of 2026, XAI signed a deal with the rival AI company Anthropic to lease the Colossus data center. This was a shocking reversal. Just a few months ago, Elon Musk publicly accused Anthropic of being racist, sexist, evil, and criminal. And now he says he met with them and nothing set off his evil detector. A lot of people would say look in the mirror if you if you were looking for for that. But anyway, the point there is that he he's he's talking really critically almost hateful about them and and it's a complete reversal because he needs to lease this data center because Grock is not popular and it's not really working out for XAI but also it was folded into SpaceX at a value of $250 billion for XAI. So it'll be interesting to see and and as you can see data centers wrapped up in that he he's building two that one that isn't even being used the capacity. So he's leasing it out and there's another one too on the way Colossus 2 and this here to do with Jeff Bezos you know one of these big tech billionaires wants to get in on the action too but I think he's being a little bit more smart about it and you could say Apple's not really in on it either. They seem to have been slow then but you know others are building out these massive data centers with massive capex but this headline here inside project prometheus Jeff Bezos's AI startup targeting aerospace chips and more. Jeff Bezos's new startup aims to bring AI into factories building systems that automate how we manufacture everything from cars to jet engines. So automation being you know fewer jobs getting AI to do it and he's into robotics too. But one thing he says that's interesting here about the AI bubble which I have featured in a video before where he says AI is real and it's going to change every industry. Bezos said at a tech conference in October 2025 even as he acknowledged the sector is in an industrial bubble of sorts. The bubbles that are industrial are not nearly as bad, he said. And it can even be good because when the dust settles and you see who are the winners, societies benefit from those inventions.

[00:11:22]He continued, "That is what is going to happen here, too. This is real. The benefits to society from AI are going to be gigantic." But you notice that he's not rushing ahead here. This is still in stealth mode. So, you get the feeling that he's sort of building in the background about this. He's sort of waiting. doesn't really care that much about the bubble, you know, biting time and, you know, as the dust settles, maybe he'll scoop up assets that go bust, that sort of thing. You know, AWS, that company was sort of secretive, undercover, and then, you know, they were using an Amazon and then it came out to be really their most successful business. So, you know, this could be similar where Elon just goes out and promises, predicts all this stuff that quite often doesn't happen. So, two different strategies from two of these tech billionaires, but that's a another strategy. And one of them is saying that it's a bubble, but saying that it might be good. And finally, here we have Ed Citron talking about the AI bubble won't survive. This question, and it is about the AI buildout. He's very critical of it. He's been trying to find if this is actually real, if it's fake, if it's sustainable, if the build out is sustainable. And he's found some really big question as a critique that he's been talking about for quite a while now. and could it play out? Let's just see what he's saying in this particular video.

[00:12:37]>> I think that that's actually going to be the question that finishes the AI bubble. Every time you look for the supposed gold mine, you find someone just handing someone money instead of the gold coming out. I don't think gigawatts are getting built. I think we're talking the data center buildout is in the hundreds of megawatts a year.

[00:12:57]They think it's so much smaller than people think cuz I can't find data centers that are actually opening. The market's no longer listening to subtlety or even reality. So, they're waiting for something that is completely and utterly impossible to ignore. I don't know what it will be, but considering the demand doesn't exist, I think it's kind of inevitable. So, he thinks that the demand is not there. The AI data centers, they're not being built. He's trying to look for some that are actually, you know, being built and going to be finished and he can't find any. So, we see all these headlines about how, you know, the build out, the AI data center build out is going incredibly fast and there's going to be so much of it, but the actual the reality, the evidence of it is not much, but there's a lot of money being pumped in and passed from one, you know, one entity to another in a circular fashion, which was similar to the dot bubble.

[00:13:47]That was just the introduction there.

[00:13:48]That's a longer interview where he goes into it in depth. That's on the tech report. I'll put all of the links to these videos, by the way, in the description cuz this is just really an overview of what's going on, the latest.

[00:13:59]Is this going to be the thing that pops the AI bubble, this data center buildout? There are there are other concerns as well. There's a backlash to AI. It really is centered around this data center buildout. As I said, back in the dotcom bubble, there was an internet infrastructure buildout which was soaked up. It was overbuilt. You know, a lot of fiber was laid and it did get soaked up eventually. But there was a financial bubble involved as there are with many technologies. Almost every technology, new exciting technology, there is a market bubble involved. So why would this be any different? But do let me know what you think of this. Do you think that that is the case or this is real? There won't be a bubble and it was just getting started. What stage is it really? It was, you know, late 2022 when this kicked off. you know, the money kicked in and it got more and more venture capitalists got excited like David Sax is is in that boat and now these big tech companies are saying the buildout is going to be amazing. So, let me know what you think of this and right now I'm going to put a related link on the screen. If you're watching this on YouTube, do go and see that now. I'll put a subscribe link on screen, too. And if you're watching this on Spotify and you're not following over there yet, do follow to get these videos in your podcast feed. Now, the other podcast I mentioned, they're the new ones on Spotify now, too. So, just search for that and I'll put a link to the channel, the YouTube channel in the description, as I said before. Thanks for watching this one and I'll see you in the next