THE POWER HUNGRY GAMES

(AMZN), (MSFT), (META), (GOOG)

Back when I was covering the tech beat in the nineties, we thought we’d seen it all. The internet changed everything, sure, but at least we understood what was happening. 

Companies were moving their businesses online, people were buying books from Amazon (AMZN) instead of driving to Borders, and my kids were suddenly smarter than me when it came to using a computer.

But this AI business? We’re talking about a completely different ball game. 

Here’s what I know for certain: roughly 40% of the entire stock market’s value is now tied up in just ten companies. Microsoft (MSFT), NVIDIA (NVDA), Meta (META), Amazon, Alphabet (GOOG) – the usual crowd. 

When I was reporting on the dot-com boom, building something online was expensive but manageable. 

A decent-sized company could get an e-commerce site up and running for a few million dollars and some elbow grease. 

These days, my kids can build a website on their laptop during study hall.

In the age of AI, though, companies are spending more money building data centers than we used to spend on entire space programs. 

Microsoft alone is budgeting 30 billion dollars for just three months of the year. That’s more than Social Security paid out when I first started collecting it.

But what most people don’t know is that these massive computer warehouses are thirsty as all get-out. Not for investment money, though Lord knows there’s plenty of that sloshing around. I’m talking about actual water. 

The projections say AI will guzzle up to 1.7 trillion gallons of freshwater every year by 2027. For context, that’s more water that flows over Niagara Falls in two weeks.

The electricity bills are even worse. An old friend in New Jersey just showed me his utility statement – up twenty-eight bucks a month, and it’s only going to get steeper. 

Meanwhile, these tech companies are building power-hungry computer farms that consume more electricity than entire cities. It’s like the old steel mills, except instead of making something you can hold in your hands, they’re teaching machines how to write poetry and drive cars.

Now, I’ve watched plenty of industries change over the decades. When I started my career, newspapers employed thousands of typesetters. Television killed radio stars, as the song goes. 

But companies usually figured out how to retrain people or create new kinds of jobs.

This feels different. The experts are saying 300 million jobs could disappear by 2050. That’s not just buggy whip manufacturers going out of business – we’re talking about doctors, lawyers, accountants, even computer programmers. The very people we told our kids to become for job security.

Remember when everyone said “learn to code” and you’d never be unemployed? Well, fresh computer science graduates are now facing higher unemployment rates than the overall average. It’s like telling everyone to become travel agents right before Expedia showed up.

The financial side has me particularly concerned, too. These companies are spending money like sailors on shore leave. 

Meta just raised 29 billion dollars to build more data centers in Louisiana. That’s real money – the kind that used to build highways and bridges and things you could actually see.

Meanwhile, the stock market is trading at levels that would have given my old editor a heart attack. Price-to-sales ratios, profit margins, debt-to-GDP numbers – everything’s in the red zone. 

But everyone keeps buying because they’re convinced this time is different.

Maybe it is. Maybe these machines really will solve climate change, cure cancer, and balance the federal budget. Maybe my great-grandchildren will thank us for building this digital infrastructure the same way we appreciate the interstate highway system.

But I’ve covered enough boom and bust cycles to know that when everyone’s convinced they’ve found the secret to easy money, that’s usually when you should start asking hard questions. 

The technology is impressive, no doubt about it. Whether it’s worth mortgaging the future remains to be seen.

One thing’s for certain – this story isn’t over yet, and those of us who remember when computers filled entire rooms are going to have front-row seats to whatever comes next.