Ep. 1780 - Here's What Nobody's Telling You About AI Data Centers

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The Matt Walsh Show 46 min 4 speakers 7 chapters transcribed 4 months ago
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What are the major issues surrounding AI data centers?

Matt Walsh 0:00
If you've been hoping to lie low while artificial intelligence eliminates millions of jobs and transforms the world's economy, then you need to pay very close attention to recent developments out of Lake Tahoe, California. Now, in case you're not familiar, Lake Tahoe is home to some of the richest people in the United States on both the California and Nevada sides. It's a premier tourist destination in our most populated state. Median property values are north of $700,000. People living there as a general matter are financially secure and highly educated. Many of them work in tech. You had to think of a list of people whose lives would be upended by artificial intelligence. They would rank fairly low, you would think.
Matt Walsh 0:41
And yet because of AI, 50,000 people living on the California side of Lake Tahoe have no idea where their power supply will come from in a matter of months. Some are worried that the lights will go out indefinitely as if they'd been hit by a terrorist attack. But what's happened is that the utility realized that it's much more lucrative to power data centers, which are used to train artificial intelligence and which consume near infinite amounts of electricity, than it is to power single family homes. After all, by some estimates, depending on the size, a single data center can consume more power than half a million homes. I'll say that again, a single data center consumes more power than half a million homes.
Matt Walsh 1:27
Every utility is rapidly coming to the same conclusion because companies like Meta, Google, Microsoft, and Amazon, which collectively own one third of all data center capacity and which build the overwhelming majority of large data centers, are willing and able to pay enormous premiums for the electricity that they're using. When they're able to price you out of the market, you're on your own. And when the choice is between a big tech trillion dollar company or you and your single family home, the big tech company is going to win out every single time. This is reporting from Fortune. Quote, Lake Tahoe doesn't know where its power will come from after next ski season, and it's a major problem for the 49,000 residents who call the region home.
Matt Walsh 2:12
Nevada Energy, the Nevada utility that has supplied the bulk of Lake Tahoe's electricity for decades, told Liberty Utilities, the small California company that services the region, that it will stop providing power after may 2027 the reason nv energy uh needs the capacity for data centers as in the energy supplier for the lake tahoe region is telling the utility company that it has less than a year to find another power source it's like we don't exist north lake tahoe resident danielle hughes told fortune now you might be thinking well uh Okay, this is no big deal. The residents can simply find another utility to supply their power. The government can simply assign some utility to pick up the slack.
Matt Walsh 2:57
I mean, surely we're not just going to leave these people without power. We're not going to do that. That can't happen. The power company can't just come to an entire community and say, we're not going to give you power anymore. There must be some sort of system in place. Well, it turns out that there is no system in place. And, you know, finding replacement power is actually not so easy in this case because Liberty, the California utility, is completely dependent on the transmission lines from the Nevada utility, NV Energy. And California regulators have no power in Nevada. They can't order NV Energy to forego the profits from these big tech companies and serve these residents. So the residents have two options.
Matt Walsh 3:38
Option number one, they can wait several years for someone to spend hundreds of millions of dollars constructing a new transmission line for their benefit. In the meantime, they have no power. They can use candlelight or something. Or option number two, they can buy power on the wholesale market, which means their electricity bill will increase dramatically. Some residents, even in Lake Tahoe, may not be able to afford the new bill.

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