Ep 341 - AI's Hidden Thirst with Erald Kolasi

Steve Grumbine: 00:00:43

All right, folks, this is Steve with Macro and Cheese. I talked to this gentleman that I'm going to talk to today a few months ago, it's actually probably three or four months ago.

And his work in physics and understanding the physics of capitalism was extremely eye opening to me.

There's a lot of things I kind of know as a layperson and as somebody who has spent a lot of time in reading about modern monetary theory in class and understanding theory. And I've had a lot of folks come on and talk about the environment and so forth.

But my guest today, Errol Colassi, who wrote the book the Physics of Capitalism, he's a physicist and an economist focusing on the nexus between energy, technology, economics, complex systems and ecological dynamics. His new book, which is not so new, but is still new to you if you haven't read it yet.

y Review Press in February of: 2025

You will want definitely to go back and listen to that first episode that we did together. It is absolutely amazing. It's one of our most listened to episodes out there, so please do check it out.

But before we get started, I want to tell you a little bit about what we're going to talk about today. You know, I've had gentlemen come on and discuss in great detail aspects of artificial intelligence, AI. We've talked about the morality of it.

Does AI deserve its own rights and responsibilities as sentient beings?

Well, these AI devices take on human traits and we've discussed a whole host of things as far as it goes with militarization of AI and in the classroom even, okay, but today we're going to talk about energy. We're going to talk about the interrelatedness and interconnectedness of all things.

We're going to talk about the displacement and the destruction of the biosphere. And we're going to talk about the real resource, folks.

The real resources that modern monetary theory bases all of its token on is the availability and mobilization of real resources. And that is going to come into play big time in our conversation.

Erald Kolasi: 00:03:02

Today.

Steve Grumbine: 00:03:03

So without further ado, let me bring on my guest, Errol Colassi. Welcome to the show, sir.

Erald Kolasi: 00:03:09

Hey, Steve, thank you for having me back on. Very excited.

Steve Grumbine: 00:03:13

Absolutely. This subject, it is near and dear, I think, to many people's hearts for different reasons.

Like, I think everybody comes to concerns with AI from an employment perspective to how this is going to be used to oversee them at work or even watching what's happened in Gaza with the militarization of it, which we've talked about in several episodes in the past. But I don't think we've talked at length, at least in a detailed fashion, on what it does to the biosphere.

And quite frankly, we did discuss some of this in our previous conversation, but we didn't go into the depth we're going to go into today.

So what I'd like to ask you to do is kind of set the stage and explain what the AI world is and what it is doing, and then we can get into how it is funded and what the impacts of that are on employment, the biosphere and our lives in general.

Erald Kolasi: 00:04:12

Yeah, absolutely. Thank you.

So when you talk about what AI is, you know, I don't think you're going to find two people on planet Earth who will agree on the meaning of artificial intelligence. Right. I just recently talked to somebody who doesn't even like the term artificial intelligence.

And there's people like Noam Chomsky and other intellectuals who will tell you these generative AI systems like ChatGPT and Copilot and Gemini, they're just pattern recognition systems, right? They're not intellectualizing, they're not actually thinking, they're not doing anything.

They've just been taught to capture patterns and that's all they're doing. So that's a whole other sort of complicated mess.

But what I mean with AI, in the context of this discussion that you and I are having, if we could just focus, it is I'm talking about these systems that are based on deep learning and neural networks. So that's some of the things that I just mentioned. You know, Grok, ChatGPT and Llama, things like that, Right?

So these large language models and other similar kinds of models, you know, image generators, things like that. So predominantly generative AI and some of the things that are ultimately going to be based on generative AI, like agentic AI, right?

These autonomous AI systems that are supposed to accompany you in your daily life as you do tasks at work or just normally in your personal life.

So that's what I'm talking about when we're talking about the rise of AI in the context of this discussion, and what are the implications going to be for our energy use and resource consumption, and what are the constraints on that and what's going to be the impact that the rise of these systems is going to have on society? Right. And like you sort of mentioned, there are many complex dimensions to this issue.

So with AI, you could talk about the economics of it, the impact on jobs and job displacement and the impact on the stock market, you could talk about its impact on education, you can talk about its impact on our health and psychology. And all of those are fundamentally important issues and I think will probably overlap with the discussion that we have today.

But what underlies all of those issues is the energy and biophysical resources that are necessary to make this world happen in the first place.

So at the root of all that are these things called data centers, and these are these gigantic specialized facilities that have these enormous rows of server racks, which is basically rows and rows of computer systems if you step inside one, especially the hyperscale data centers, you know, the larger ones, although there are many other kinds of data centers, there's even on site ones. This is what companies used to do back in the day.

They used to have on site small data centers where they basically packed all of their servers and computers. Now, of course, they've moved more and more to the cloud, quote, unquote.

And the cloud isn't some magical world up there in the sky, it's right down here. It's these massive data centers where they're putting all these computing resources.

And Whenever you use ChatGPT, whenever you use these AI systems, your queries, your search results and all of that, they're going to these data centers. And there's all these computer chips inside these data centers. And for AI applications, especially relevant ones are Nvidia's GPUs, right?

So graphics processing units. So there's all these computer chips, they do a bunch of calculations to figure out the next word that you're going to get in your reply, right?

And so you tell Chatgpt, you know, give me an essay on 19th century Russia or something like that. That's what's happening.

The request is being sent to these data centers and all of these computer chips are doing their matrix multiplications at rapid speeds. And then eventually that answer is sent back to your home, to your router, and that's what you see right on the screen.

So that is sort of the underlying biophysical dynamics of what is happening when people interface with These systems.

And I think that's important to emphasize because you can be lulled into not a false sense of security, but you can kind of forget about some of the energy and biophysical aspects of this.

When you're just in front of your computer and you're just typing away and you're asking these systems to do all these magical things for you, it can seem like it comes out of nowhere. But no, in reality, all of this stuff takes enormous energy. So I just want to talk about the growth of data centers over the past few decades.

So in the year: 2000

Data centers in the United States last year consumed about 200 terawatt hours of energy in their electricity consumption. That's about half of the world's total data center electricity consumption. About half of it is coming in the United States.

And if terawatt hours doesn't mean anything to you, let me put it this way. New York city consumes about 50 terawatt hours of electricity every year.

So the data centers in the United States are consuming about four New York City's worth of electricity every single year. Right. So there's just massive energy guzzling facilities.

And another thing I want to emphasize before I turn it over to you is that data centers are not the only aspect of this story. Right. So that's often the aspect that is emphasized in the media. Oh my God. Data centers need so much electricity.

Where are we going to get all this electricity? Oh my God. Data centers need to consume so much water. Right. Because all of this equipment inside the data centers, it gets really, really hot.

And so now people are turning to liquid powered cooling and they're using water, basically cold water running through these pipes across the data center to cool down the data center. Right. To make sure that the equipment doesn't fry so it can continue operating.

That's why a lot of the focus, and I want to talk about some of the consequences associated with all that, with the electricity needs and the water needs and all the problems there. But this story is not just about data centers. And sometimes I don't like it when we just isolate it to data centers and to electricity consumption.

Really, the rise of AI in data centers is having a lot of complex upstream effects, effects and downstream effects across all of our energy networks. And so that's one of the things that I hope to get into as well over the course of our discussion.

Steve Grumbine: 00:10:01

You know, one of the things that concerns me most specifically about the United States, this decentralized capitalist driven model, is there is really no central planning. There is really no central authority that understands the main problems.

There is no real regulatory body that's actually saying, hey, you know, when we do these things, these externalities happen.

It seems like a mad dash based on, let's be fair, capital driving more capital to do capital things which are always about more accumulation, more wealth. And that usually involves layoffs.

That usually involves a host of other things that sound great when you're hearing about, hey, my 401k went up because my investment in AI went up. But it doesn't talk about the other interrelated casualties of war, the collateral damage, if you will.

I was waiting for you to bring up the water thing and then you said it. I was like, dag on. Because that water thing really is serious.

I mean, we're talking about entire regions that are water poor, that don't have water yet. At the same time, though, we're bleeding away all of our water, literally snatching it up to cool these mega centers down.

I mean, Elon Musk himself, I think it's in Missouri as some massive, I mean, like a city's worth of data centers. He's turned things up using all kinds of different strategies that have really destroyed the biosphere for the local community.

Anyway, take us through this man. Like, take it from where I just stated and keep going with it.

Erald Kolasi: 00:11:32

Absolutely. This is one of the things that concerns me the most. Right.

Its impact on our water resources and especially in the dry and arid regions of the United States where a lot of these things are going up. Yeah, you mentioned Elon Musk. So Colossus is in Memphis in Tennessee. Right. And that's the name of this massive.

The supercomputer is what they call it. But it's basically a gigantic data center with over, you know, 100,000 hoppers. Those are Nvidia's GPUs, right.

Over a hundred thousand computer chips consumes about 3 to 5 million gallons of water every single day. To give people an idea of how much that is, I mean, it's the equivalent of over 10,000 typical American households every single day.

So it's an enormous amount of water consumption because like I said, it's so important to keep these data centers cooled down. Otherwise they're just not going to work. Right. They're just going to overheat.

And so there's enormous water consumption happening, and it's really impacting people's lives. You know, I think there was a metadata center in Newton County, Georgia. It's a fairly semi rural exurban area, right?

And it started drawing water from the local underground reserves, the aquifers.

And people noticed shortly after this data center was being constructed, but also after we finished last year, they noticed their wells running dry or having weird funny colors. The water that was coming out had like a weird brown color and everything.

And so the suspicion is that the construction of this data center in Newton county essentially polluted the water, right?

And it's led to people delaying retirement because now they have to spend vast amounts of money, you know, cleaning their water or finding a way to get water, and some of their bathrooms aren't working. It really has a massive effect on these local communities.

And the crazy thing is that these data centers, when they plug in for water, they're typically plugging into the public water supply, right? The public water systems. And that's another funny aspect of this story, Steve.

You know how I often make fun of capitalists for essentially relying on the state and public resources in order to grow, right? And Elon Musk is obviously example number one of that bloodsucker of them all. And now, in fact, Colossus is plugging into tva, right?

The Tennessee Valley Authority. And as you know, that's a federal company, it's a government company established during the Great Depression.

So now they're getting their electricity from a government company, and these data centers are plugging into public water systems.

But a lot of what they're doing, too, in many places where these water systems don't exist, is they're also tapping into these underground water reserves, right? And aquifers.

And this is especially more relevant in, like, drier rural areas where a lot of these data centers are going because the power might be cheaper. So they really love cheap power.

So they're going into all these random places now across the United States, like Newton County, Georgia, and they're really putting a lot of stress on available water resources and on water quality. And people's water bills are going up, right? So if a data center is going to move next to you, your water bills are going to skyrocket.

It's gotten so bad that many communities in the United States are actually fighting back now. So in Becker, Minnesota, they recently rejected a proposed data center from Amazon. They said, nope, this is going to consume too much.

It's going to break us. We can't handle it. And you're starting to see fights like that break out across the United States.

It's a major issue here in Virginia, where I live, because we have the largest cluster of data centers in the world. Right. It's called Data Center Alley. Just dozens and dozens of data centers here. So it's leading to a lot of political fights.

You know, Chile said no to some data centers from Google, I think, or from whoever it was. Uruguay is having some fights over it.

So it's becoming a major political issue because people are now waking up to the energy and biophysical demands of these massive data centers and the possible consequences on their communities. And we just talked about water, Steve, but I also want to talk about the electricity angle.

So as you can imagine, when these massive data centers come in, they put a lot of new demands on the grid because a lot of them do connect to the regular utility grid. Now many of them have their own backup generation units in case power fails, right.

So they have a lot of like diesel generators, natural gas generators, and some of them have active on site independent power units. And they might be largely disconnected from the grid, but most right now are still very much connected to the grid.

And if the grid fails or if they have to consume less from the grid, they talk to utilities basically, and they plan then they might turn on their independent power units. Right.

But it's leading to a situation where because they're putting more and more stress on the grid, you're starting to see more power outages and brownouts in the United States, especially near communities where these places are located. So in Northern Virginia, for example, where there's a lot of data centers, power outages are becoming more and more common.

Now officially it is hard to causally attribute them to data centers because the companies themselves release very little data. The politicians don't want to talk about it much. Right. Because they just finance the data center so they can get the tax revenue.

And the tax revenue is good for these things. But they have all of these complicated knock on effects right now. They're putting a lot of pressure on the grids.

And especially if you're talking about the summer, you've already got people cranking out their AC units because it's really hot. So that's overloading the grid. And now you're adding data centers to an already stressed out grid and it's not a good combination. Right.

And so it's leading to a lot of brownouts and power outages across these communities.

In the United States, utilities, because they're investing in more capacity, you know, more Capex and more capacity, they're passing along those bills to you, right? So the more and more data centers that are coming in, your electricity bills, this has already happened in the United States, right?

Our electric bills are just skyrocketing. That's going to continue happening.

And I also wanted to talk about the health aspect of it a little bit, because what a lot of people don't realize is that when data centers have to move to, like, diesel generators and natural gas generators, either because they want their own independent power units or as a backup source if power fails, those things emit a lot of harmful pollutants. Right?

So the natural gas generators, for example, that Elon Musk installed at Colossus in Memphis, 35 natural gas generators, those things are pumping out benzene, which is a carcinogen. They're pumping out nitrogen oxides, which are a critical component in smog, right?

So that dirty, heavy, polluted air, and this is particulate matter, right? So small tiny particles that can get in your lungs.

And so these are things that aggravate things like asthma and heart disease and lung disease and all of these conditions which people are struggling with. And in the case of Elon Musk and Colossus in Memphis, it was also placed in a generally, you know, near a poor area, right.

An area that's already struggling with a lot of the history of environmental injustice over there in South Memphis. That's where this facility was put. And they brought in these natural gas generators, all the methane they're pumping out. Right.

Which is a dangerous greenhouse gas, as you know very well. We'll get to that part later. But right now I'm just talking about the public health aspects of it, right?

So if you live near these massive data centers, don't be surprised if five to 10 years from now or beyond that, we start getting stories in the media about, oh, people who live here have higher rates of cancer or higher rates of all these other issues, Right? And so this is, I think, an underappreciated aspect of the rise of AI and data centers.

It's not just the economic and job displacement, not just the pressure on our energy and biophysical resources. It's also the public health aspect of it as well.

What's going to be the impact on our air quality, on our water quality, and what are going to be the downstream effects on our health as a result of all this stuff, right? So that is something that absolutely does concern me very much.

Steve Grumbine: 00:18:50

You know, I think to myself, in a planned economy, in an economy where you have a functioning Democracy, we don't.

In a place where you can actually make decisions that are in the interests of the entire populace versus in, you know, the benefit of a few billionaires or oligarchs, one might consider strategic placement of data centers and maybe even thinking about desalination plants, right? Like taking salt water from the ocean and using that to generate energy as well as water to handle these things.

Again, I'm just thinking out loud as you're talking. There's gotta be a way of handling these things other than just allowing laissez faire capitalism to make the rules for us.

It doesn't feel like anybody is steering the ship here. It feels like capital is. I mean, literally only the one dominating the decider of all things is oligarchic capital. Am I missing something?

Because I certainly don't see any meaningful democracy whatsoever saying, hey, you know, this is killing us. We'd like to see this done differently.

Like, I'm already convinced there's not, but that's almost at this point, conjecture, because I don't have that data in front of me, but my eyes, you know, do not believe my lying eyes kind of thing. Right?

I mean, why are we not regulating these things in such a way where these negative externalities are either dealt with or, or we shut it down and we say, no, that can't happen. We can't do that. You're going to kill people.

Erald Kolasi: 00:20:21

Yeah, great question.

At the highest levels of our federal government, AI has now received the green light for these elite Silicon Valley investors and executives to basically throw all the money in the world they want to growing wherever they want.

So at the highest level of government, there isn't a lot of, I don't know what you want to call it, democratic pushback, quote, unquote, where that resistance is happening to these growing AI empires and all the consequences that they're going to have. It's mostly happening at the local level and some people are trying to do it at the state level.

They're trying to pass laws and regulations to try to kind of rein these people in. Right? Because right now, yeah, it's. It's absolutely crazy. There aren't a lot of constraints. There's just.

Mark Zuckerberg decides, I want a massive new mega cluster in Louisiana with three natural gas power plants that are going to consume 2 gigawatts of power on average. And that happens, you know, that's like, sure, it'll bring in jobs, right?

But there isn't any kind of overall strategic direction or planning from the federal government besides Just saying, do whatever you want and grow as fast as you want.

And the way the Silicon Valley elites, the way the capitalists are selling this, at least to the federal government, is we need to make sure that we stay ahead of China. Because China's also throwing now massive multi billion dollar investments into AI, Right?

So they're also building out their data centers and training their models and doing cloud computing and all that. So the argument for almost anything for the ruling classes nowadays is, well, if we don't do it, China will and we can't fall behind the Chinese.

So therefore, we need to remove all possible constraints and you need to let us just do whatever we want. That's been a very powerful argument that resonates in Washington, D.C. where there's a fear of everything Chinese. Right.

And so far, the Silicon Valley capitalists have been able to steer this ship kind of wherever they want to go.

But again, because there hasn't been that effective pushback from the federal government, they're going into these local communities, finding desperate communities that need tax dollars and saying, listen, if I bring my data center here, your revenues in your budget, they're going to go up like 40%, 50%.

Steve Grumbine: 00:22:23

Yep.

Erald Kolasi: 00:22:24

And if you're a poor struggling community in a lot of these counties, that may sound really good at first. Right. Or even if you're not a poor struggling county, because some of the counties where this stuff is going up are not poor and struggling. Right?

Steve Grumbine: 00:22:35

Uh, yeah.

Erald Kolasi: 00:22:35

But for a lot of these counties, that sounds really good. Right? Wow. I'm going to get so much tax revenues.

And of course, what you're not thinking about are the major consequences and implications of your actions down the road because you're so desperate for that money right now.

Steve Grumbine: 00:22:48

Yes.

Erald Kolasi: 00:22:49

In effect, a lot of these places and local politicians, they're being bought by Silicon Valley. And sure, there is some local pushback. I gave some examples, places like Becker, Minnesota and others that are fighting back. But it's hard right now.

The scales are tilted. Unless there is the different sort of government in Washington, D.C. that sees this from a different perspective. Right.

That it's not just about, oh my God, if we don't do this, China will get ahead of us. It's okay. What are we doing to our health?

What are we doing to our public water systems and our air and our rivers and our lakes and all these things. Right. So, yeah, it's quite a sad situation.

Steve Grumbine: 00:23:23

So one of the things that jumps out at me, and I know folks that listen to this program have heard me talk about this with both Randy Ray and others.

Quite frankly, anyone that has paid five minutes of attention to modern monetary theory understands federal government as the currency issuer and states as currency users.

And so the states are in a dog eat dog fight race to the bottom to either cut their tax base so that they can lure businesses in, or do sweetheart deals with the devil like this so that they can bring tax revenue in through these kinds of data center acquisitions. And people just don't understand how vital it is to understand that currency issue or currency user relationship.

Because while the federal government has the ability to fund every one of these state initiatives or to fund green energy, or to fund whatever it needs to fund the fake news belief that the government is drowning in debt and can't do anything but fuels more of this federalization where the states are left to fight for themselves with ever increasing austerity at the federal level. And so that makes these states literally jump at the chance to bring in a data center like this, regardless of how many people it kills.

And they will literally tell you, hey, this is a great opportunity for our community. We're going to bring in this thing. It's a great opportunity.

We're going to bring medical waste into our community because it's a great opportunity for tax revenue. We're going to, we're going to bring nuclear waste into your backyard because it's a great opportunity for revenue.

banking politics of the early: 1900

And I got to be honest with you, a lot of us, including myself, find ourselves having to use bits of AI here and there because not being a Luddite, there is an element of you kind of have to, they've incorporated this into your work. It's impossible to do certain things. Now if you do a Google search, you get an AI response as your first thing.

I mean, yes, I'm sure you can use Duckgo or whatever things out there, but the point is that the average person still says Google that.

So they go to Google and they've already used AI whether anybody wanted them to or not, whether they're the most green, wonderful human being on the planet. They've still used AI. It has become ever present, it has permeated all aspects of life at this point.

And obviously I don't need to get into the deep fakes out there that it's doing, but talk a little bit about the local and state Governments. This was really important to me. I appreciate you bringing it up.

I don't think enough people understand the division point between what drives the federal government, which is not revenue constrained, and state governments that are absolutely in a fight for their existence.

And so you've got this horrible relationship where you know you're killing people, you know you're doing bad things, and yet at the same time, without those revenues, the state funds dry up, schools stop having money, you try to raise taxes on people and the rich people move to a low tax area. I mean, it's just a lose, lose race to the bottom.

Can you talk a little bit about the impacts that these AI investments are having in terms of state bond budgets or state funding?

Erald Kolasi: 00:26:53

Yeah, absolutely. And I agree with everything you just said.

It points to obviously fundamental issues with the political economy of the United States, especially when people view the federal government as somehow fiscally constrained.

And they don't realize, of course, that the government is the currency issuer and has enormous powers to monetize debt and to expand the money supply and to essentially create the money that it needs for any initiative. Right. The only real fundamental constraints are biophysical resource constraints at the real world level.

But unfortunately, yes, our ruling class thinks that money is a constraint. There's a fixed supply of it, that it's kind of like gold or oil or uranium. And obviously that's not what money is. Right.

Money is fundamentally a social relation. It can be negotiated over, bargained, created, destroyed. So money is very different from the physical things that we're used to in our regular world.

And it leads to this situation that you described precisely, which is a lot of these state and local governments, they're very cash strapped, they're very desperate. Where are they going to go?

Well, they have Silicon Valley doing hundreds of billions of dollars in capex and trillions and dollars over the next few years that's going to go up to and they're going to get a lot of ka Ching. That's what they see, right?

They see the money sign in these next few years and a lot of them are persuaded that hey, we gotta do this, otherwise where's the money going to come from for the police officers and for the schools? Yeah, you're right. They absolutely feel so desperate. And because they're in this situation, it's kind of easier to divide and conquer.

For the capitalists in Silicon Valley, it's much harder to take on the federal government or a federal government that's skeptical of your investment decisions and the strategic direction you want to take the economy than it is to divide and conquer at the local level. Right. Where you can pay off politicians or promise people nice tax revenues for schools and things like that.

So they're absolutely exploiting this wider weakness in American federalism.

I mean, that's ultimately, I think what this is pointing to is that the state and local governments can very easily be exploited and manipulated by capital, even when they're established. Where capitalists are established somewhere, they can threaten a capital strike. So they can threaten to take away their business and the jobs. Right.

Unless you do this thing for me, unless you give me eminent domain rights so I can bulldoze these businesses and homes and expand my data center or expand my factory or whoever wants to expand, whatever. Capitalists often threaten that. Right. And it's known as a capital strike.

And yeah, a lot of these local and state governments, I think, in general are powerless against it because if you have capital mobility and capital can go anywhere, you can only stop that at a higher level of power. Like the federal government, right?

Steve Grumbine: 00:29:22

That's right.

Erald Kolasi: 00:29:22

If the federal government was actually interested in whatever's going on with AI, which it really isn't, beyond just saying we need to invest a lot in AI, I don't think there's anybody in the federal government beyond that who knows what is actually going on or what's happening on the ground, what these systems are doing, what they're used for, what their consequences are. So you're right. It's a very, very, very sad situation.

Steve Grumbine: 00:29:42

So when you talked about power grids, I think this is really important. I mean, we can go back to turn of the century, even Y and so forth. We've been talking about how volatile the power grids are in the United States.

Quite frankly, the entire infrastructure of the United States, it was built during a time where people weren't asking about debt and deficits, not in the way they do today, which has been weaponized and leveraging the absolute ignorance of the public about how money works.

And so they've been able to get away with an outrageous amount of things to say, you know, really stupid things, and nobody has any pushback is they just don't understand the subject. Right. I mean, politicians don't understand the subject.

The powers that be understand full well what a gullible, uneducated group of people can be led to do.

And as a result, the power grid has basically not been tended to, and we don't have any kind of central understanding of power and economy, or I should say, you know, the electrical grid, for example. What a Huge national defense issue.

This would be, if you really care about national defense, how easy it would be to really damage the US With a strike on these antiquated power grids.

And I think it's important to discuss how power is distributed electric power, that is, folks, the stuff we power our refrigerators and our homes and our apartments and so forth. Can you talk a little bit about the impact? Guess. Describe the power grid as it is today and describe the impacts this is having on.

I know you talked a little bit about the brownouts, but let's go deeper into that.

Erald Kolasi: 00:31:21

Yeah, absolutely. And so the US Power grid is humongous but relatively disconnected. There's a bunch of different regions that have their own, like, transmission lines.

And Texas, as you might know, has its own, like, independent power distribution system.

It's not really connected to other states because it doesn't really want to be, you know, it doesn't want to, quote, unquote, suffer from federal regulations as it sees the situation.

So the way it basically works is we have power plants, whether those are fossil fuel power plants, like coal plants or natural gas plants, or more renewable sources like nuclear power plants, or obviously wind farms and solar farms. They generate the electricity. So they generate the electricity. Then we have transmission lines. They carry it across the United States.

And then there's all these substations with transformers and transformers. Take the high voltage that originally comes out of the power plants, and then they essentially reduce it. So it's safe for you to use at home.

So the voltage that you're actually getting at home, it's way, way lower than what's actually produced at a power plant, because otherwise it would be unusable. Right. It would just destroy your house. So it has to be brought down and controlled. And that's what all these, like, substations and transformers do.

You mentioned how old the grid is and all the problems that it has. The average transformer in the United States is 38 years old, right? It's 30 years. A lot of these things haven't been replaced or tended to in ages.

And it speaks to broader issues, of course, with American infrastructure, not just with our power grids. But, yes, this is one area where it's absolutely relevant is we haven't had the necessary investments as we've needed in our power grids.

What you had over the past couple of decades is total electricity production in the United States flatlined or stabilized because just the extra demand wasn't there. So there just wasn't a lot of new demand. And power companies thought, well, we don't need to produce a lot more. And so they didn't.

And now of course we've had this huge mad scramble towards AI and data centers. And now suddenly there is a lot more demand, but the production capacity isn't really there.

And so there are a lot of utilities that are scrambling to catch up. But as you know, it can take years and years to build a power plant, right? It's not something that you just turn on tomorrow.

And because you can't just turn to it tomorrow, what a lot of these hyperscalers, you know, Google, Amazon, Microsoft.

What a lot of these big data center companies are doing is they're turning to their own sort of small independent power generation units that operate on site. So I mentioned some of them, like diesel generators for backup power, natural gas generators.

Some people are interested in small modular nuclear reactors, although right now those haven't really been commercialized at scale yet.

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Erald Kolasi: 00:34:15

But the point is that they want these independent power units because one, a lot of the capacity isn't there on the grid.

And when it is there, it leads to a lot of issues with instability. And it's gotten so bad that some of these companies have gotten so desperate that they're probably skirting laws and regulations, right?

So when Elon Musk went up and started Colossus last year In Memphis, those 35 natural gas generators collectively produced enough power, almost 100 megawatts. They produced enough power that they were large enough to be covered under the Clean Air act. Which means they need permits.

So they need official permits and a bunch of other checks. And Elon Musk's company xai basically ignored those permits, didn't get them.

They argued that, well, these systems are kind of like independent, autonomous, they're portable. They're not really a power plant like a large power plant that should be covered under the Clean Air Act.

And so they just got these systems installed on site without any permits, any environmental reviews, again, likely skirting a lot of laws and regulations. So not the only place where it's happening.

But the point of that story is that they're getting so desperate to produce energy and electricity because they can't get a lot of it from the regular utilities that they're bypassing a lot of Laws and regulations in order to make it happen because they're so desperate to scale up these data centers.

You know, the bigger the data centers, Obviously the more GPUs and computer chips you can put in there, the bigger the models you can train, the more inferencing you can do, right? The more things you can answer from users and stuff like that. So everything is bigger.

And it's gotten to this point where just laws and regulations are being ignored. Obviously a lot of people's lives are going to be harmed along the way. And it's just absolutely crazy when you.

Steve Grumbine: 00:35:54

Look at the regulatory bodies in this country alone.

And I'm not going to speak to the rest of the world because I don't understand the rest of the world's regulatory bodies nearly as well as I kind of do ours.

And one of the things that jumps out at you is there's a lot of well intentioned people that think, hey, you know, the government could just regulate this and so forth. And the government has these regulations on the books.

But what they do is they severely underfund the actual enforcement of those regulations and then they allow business to decry the cost of maintaining those regulations. And then in the absence of having anyone that can actually manage or control or say, hey, you know what, you're going to follow these regulations.

And if these regulations make your business untenable, maybe your business isn't worth keeping around, maybe your business isn't good for us.

But they fundamentally don't understand that when you underfund whatever that thing is, right, if I underfund the people delivering food, but I make a food program, you're going to see very bad results because I didn't fund the necessary elements of it. I didn't plan it out, I didn't ensure the real resources are there.

So they do these things with the regulatory bodies to say, see, we did something, but they intentionally underfund the enforcement. That makes it like a toothless non thing.

A thing that we can all clap to ourselves and feel very smug and self congratulatory for the hey look, we the Democrats went ahead and passed this environmental regulation. Yeah, but tell me about the enforcement, tell me about the enforcement.

Tell me about the apparatus that ensures that any of this stuff has teeth to it.

Oh yeah, I mean you could look at what happened with all the regulating of Wall street that is so fraudulent and just pathetic and the dismantling of all the different boundaries, if you will, between investment and banking, it's just completely out the window. And you look at it for this, for energy, and every single thing that they could regulate. It's not that the regulations are bad, maybe they aren't.

It's that there's no actual meaningful enforcement. There's no actual meaningful way of exacting a price or holding the line on those things because there is no support at the top.

Like you said, the federal government literally does not support these moves.

We talked to Bill Black, who notoriously was key to bringing down the Keating Five years ago, and every time he knocked on the door trying to enforce the regulations that he was in charge of enforcing, he was not supported. It's always been this way. And it's a power dynamic. It's like the rules are there for the little people that don't have any power.

They're not there for the big people who do.

And when you look at things like what we're talking about here, these data centers in general and AI overall, they're not there to serve we the people in any way, shape or form. And so the regulatory bodies are naturally going to be starved, underfunded and toothless. What is your experience here?

Obviously, the federal government is all in, especially now within this Trump administration, but I don't think it was any different under Biden. I really don't think there was any difference whatsoever.

I think that the Red scare, part two, now China, Sino scare, and the militarization of this country in terms of anybody out there that could possibly leapfrog us, instead of working collaboratively or cooperatively or thinking in terms of what's best for everyone, you know, let's be fair. They are literally ensuring that there is no meaningful way to stop this freight train.

Erald Kolasi: 00:39:38

Yeah, you're absolutely right.

And it's funny you said there was nothing different under the Biden administration, and I think that's true at a practical level in terms of regulatory enforcement. But what was different was the tune that the Silicon Valley capitalists were singing.

So back then, you might remember, Sam Altman was quite excited about the idea, or pretended to be excited about the idea about AI regulation. So this was a big talk of the town, you know, when ChatGPT first burst onto the scene and shortly after, we need regulations to control this stuff.

And part of that was the new emerging gen AI industry wanting to seem respectable and accepted. And part of the way you do that is by having federal regulations. But once Trump came into power and Biden left, they've kind of changed their tune.

Now they don't really want regulation now it's sort of like, leave us alone. So we can best decide what to do because we're the only ones that know what's actually going on.

So Silicon Valley has kind of changed its tune on whether they even want a regulatory framework on AI and on what kind of framework they even want.

And so now when you have states like California pushing proposals to provide some more regulations on these companies, there's a lot of resistance now and hesitation and skepticism from Silicon Valley. So I think that's going to be an emerging battleground going forward.

To what extent are you going to have regulation at the state and local level as opposed to the more federal level?

Steve Grumbine: 00:41:02

We have talked at some great length about the climate crisis that we're experiencing and so forth. And there's nothing, by the way, going on to change that. Like all systems are go in terms of climate destruction.

What exactly do you think will happen at the state level? I mean, they don't have the resources really, or maybe they do, and I just don't understand. But what can a state do to really stop this?

Erald Kolasi: 00:41:28

You know, unfortunately, not much. Right.

Because even if some states stop it as local communities have stopped it, other states are going to go in there with open arms and say, you know, hey, this brings construction jobs, this brings, you know, tax revenue. So come on in. And that's what's happening right now.

But I'm glad you mentioned climate change and global warming, because I did want to talk a little bit about the global aspects of this as well.

And I think some of the things that people are fundamentally misunderstanding when they talk about the rise of AI and when they talk about the rise of data centers.

So right now, what a lot of people will tell you, like the International Energy Agency or people from our world in data, like Heather Richie and all that, they'll tell you data centers and crypto mining together, they're only responsible for like 2% of global electricity consumption. And even in the next five years, the projection from some of these organizations and corporations are calling for it to double. Right?

nergy consumption by the year: 2030

And a lot of people are kind of dismissing those numbers as sort of, well, sure, they're growing fast, but in the grand scheme of things, they're kind of irrelevant. And I think a couple of major things people miss in this conversation. One is that electricity consumption is not the same thing as energy demand.

Right? Because electricity is not the only kind of energy that's impacted in what we're talking about.

So there's also construction and transportation and burning Fossil fuels that are associated with the rise of data centers. And there's a lot of complex upstream factors that are involved in making data centers happen in the first place.

So let's just go through some of them. So one, obviously you have to build a data center. Who's doing that? Well, construction companies are. And what are they using?

Well, they're using bulldozers and excavators and cranes and things like that. Tandem rollers. Most of those things are powered by diesel engines.

And so they're emitting greenhouse gases and other harmful pollutants as they're building these things. Again, ties both to the global warming angle and the public health angle. Right.

So just the mere construction of these massive data centers produces a lot of pollution. That's one issue. You produce a lot of these pollution from these data centers.

But another problem is that then you have to put specialized equipment in these data centers. So you got to put the servers, the server racks and the network switches and the computer chips and take Nvidia's GPUs. Right.

Where are they produced, Steve? They don't just magically show up at the data center. You know, most of them are produced by TSMC in Taiwan. Right.

So they're produced all the way in Taiwan by TSMC as these massive production facilities, foundries over there. And obviously that's using a lot of electricity in Taiwan, but then they have to be shipped and transported and other things.

Now, all of that's using energy. And think about what it takes TSMC to make a lot of these advanced computer chips.

It takes a lot of highly specialized devices and equipment like extreme ultraviolet lithography machines, which are used for those etching patterns on the silicon wafers. So you need a lot of these specialized machines in order to build, you know, very advanced chips that have a lot of transistors.

They're very, very, very tiny transistors. And where does TSMC get a lot of those specialized devices? Well, he doesn't produce them himself. He gets them from other companies around the world.

So he gets a lot of them from the ASML in the Netherlands. That's what produces the world's most advanced EUV lithography machines. And this is fascinating. This is from ASML's own website.

It takes ASML to transport one EUV lithography machine to TSMC in Taiwan takes ASML 40 freight tankers, three cargo planes, and 20 trucks on average. Wow. And that's because these lithography machines are, you know, these huge devices and they have to be disassembled into various components. Right.

And so all of these things, the cargo planes, the merchant shipping, the trucks, they're basically shipping different components of this thing to tsmc, and then it's reconstructed on site. Right? And then TSMC uses it to make GPUs and other advanced chips.

So obviously, you can imagine there's a lot of, again, greenhouse gases and pollutants associated with all of that transportation. And ASML itself has over 5,000 different suppliers around the world.

So it needs all of these like sensors and lasers and other specialized equipment to produce its own machines. Right.

I was just giving you one example, but you can see where this is going, and where it's going is that our global energy networks are highly complex and extended and interdependent. That's especially the case when you're talking about the semiconductor industry.

So the semiconductor industry has the most globally extended supply chains of any industry. And it's got its tentacles kind of everywhere. Right.

So if one company is doing something over here, it needs to source a million different parts and components from companies all over the world. And that's true to a large extent with a lot of other industries as well, like the auto industry and so on.

But again, it is especially true with the semiconductor industry.

And that's relevant here because that's where a lot of the specialized equipment and devices that this industry is producing is going into these data centers.

So I think this is part of the story that's often missed when people talk about, well, what are going to be the extra energy demands associated with the rise of AI. It's really a complicated question to answer.

I mean, you would really need somebody doing just a whole PhD thesis just on this subject to truly answer it, because it's not as simple as saying, well, they consume 2% of the world's electricity. That's not such a big deal in the grand scheme of things, really.

Once you include, of course, the full energy spectrum, all the different ways that we use energy. Right. And all the different emissions that we have and all things like that.

The rise of AI and data centers, I think likely is having a much bigger impact than that. And of course, then I'm also leaving out the downstream effects. Right.

So all of us now that are using AI in our lives, well, when we're at home or at work, who's powering that equipment? Right. So it's our utilities, right? We get electricity from the grid, so they have to power our devices.

And we're using them more now because we've got to ask, you know, chatgpt you know, a million questions or like you said, people need to use it for work because a lot of these agentic AI systems are coming online at work. So it's leading to a lot of the downstream effects as well. And it's crazy how fast this stuff is spreading around the world.

Steve, I gotta tell you, I'm just like flabbergasted by some of these numbers.

Saudi Arabia, in order to ingratiate themselves with the new administration in Washington, is now building out dozens of massive data centers in the desert, right? So you can imagine what a great idea that is in a water parts region.

They've inked deals with Nvidia where Nvidia is going to ship them their latest, you know, Blackwell series chips.

ments as part of their Vision: 2030

And it's happening all around the world. Brazil is also now constructing dozens of hyperscale data centers and Japan's constructing a lot of them.

China obviously is having a massive build out and it's just crazy, right? And again, when you look at how entangled all of these energy networks are.

So this is one of the fundamental points I brought up in the book, is that our energy networks are highly entangled.

So when we change conversional devices or things over here can have a lot of complex upstream and downstream effects in other parts of the network because all of these things are interconnected together. When you do your ChatGPT query, Nvidia's chips have to calculate and give you the answer. But Nvidia's chips are produced by TSMC in Taiwan.

But in order for TSMC to produce them, it has to get stuff from ASML and a bunch of other people. And in order for ASML to do that, they have to get equipment from other people.

It's all so interconnected that I think people don't appreciate the scale of the changes that are happening when they cite these throwaway statistics about, well, it's only 2% of electricity consumption. That's a common way that it's dismissed.

And I think, just as I just explained, I think that way of reasoning is so flawed it's dangerous to global civilization if we keep thinking along those lines.

Steve Grumbine: 00:49:18

I gotta say, just for kicks and grins, you know, as you're talking, I was looking up some information about ASML and there's great Yahoo Finance article. An analyst explains why Nvidia China News could be huge for ASML Holding. And I'll just read this one quote, because they're down 18%, okay?

And obviously earlier in the year the US had said, you can't sell these Nvidia chips to China. But now all of a sudden US government has backed off of that. And I'll just read this just for the purpose of filling in some gaps here.

This guy Joe Tagay from Equity Armor Investment said in a recent program on Schwab Network that the US government's decision to allow Nvidia to sell chips to China would be huge for ASML holding, nv, nasdaq, asml. He explained why the company is important in the AI industry. ASML has been a company I've been following for the past few years.

I'm obviously a big fan. It's been behind the chip revolution. It makes what people have called the most complicated machine humans have ever built.

And as you can imagine, it is very expensive to produce. They are essentially the machine that makes the machine. So we can't get these Nvidia chips without these ASML machines.

And I think this China News could be really huge for the company. Remember, they took a big write off, big leg down when the China News came out that Nvidia will not be selling to China early in the year.

So it's going to be interesting to see anyway, point is that I wonder what the impetus was. I mean, I guess capital won and said, you're going to let us sell to these guys no matter what. But obviously that's a big deal. That's a huge deal.

Erald Kolasi: 00:51:00

Yeah.

And the impetus was that Jensen Huang talked to Trump and convinced him to let him sell some low end chips to China under the argument that, well, they're so less advanced than the latest stuff that we're building, that it's not really a national security threat if we give this stuff to China. Right? It was like the H20 chips. Those are much older variants. This is not like the Blackwell architecture, which is Nvidia's latest AI architecture.

Right. Packs 200 billion transistors in a single chip. It's the world's fastest computer chip. So that's not what China is getting.

That stuff is still under export controls.

China is getting some of Nvidia's earlier AI chips which are still powerful but still kind of, I think, not as concerning to the US security establishment. I will say though, China itself now is building their own AI chips, Right? So Huawei is Doing this, they've already gotten some chips out.

So China is having a massive AI buildout too.

And because of all the export controls that the United States targeted China with over all these years, China has put enormous investments into developing its own domestic semiconductor industry. And that has paid off enormously. So the Chinese are now producing huge quantities of high quality chips and across sort of the market spectrum. Right.

Whether it's car chips or, you know, AI chips or chips for computer chips, smartphone chips. So the semiconductor industry there in China is becoming highly independent and highly diversified.

And that was in large part a response to the sanctions, to the export controls launched by the United States as a way of choking off China's technological development. So that was Washington's sort of original goal.

But now I think there's a lot of politics happening here too with the trade deals and the negotiations that are happening with China. This was probably kind of like a bone to the Chinese as well, like, hey, yeah, you can have some of these chip.

But yeah, I think, yeah, the original impetus was Jensen Huang talking to Trump.

Steve Grumbine: 00:52:52

So as we come towards the close here, what are some of the important things that maybe we haven't discussed yet that we should maybe bring out onto the table?

Erald Kolasi: 00:53:02

Yes, I think the important things are that we've talked a lot about what the problems are, so we've talked a lot about what the local consequences are, sort of the global consequences and the global dimensions of this, and we haven't talked much about potential solutions. Right. What could we do ideally in the face of all of this?

And that's not to say that it's going to get done because the political environment isn't there.

So I don't think any of what I'm about to say is going to get done in the short term, but thinking more long term, like where should we set the boundaries of AI and energy? Should we just continue operating as if there are no boundaries and just keep building out data centers for the rest of the century?

Obviously, Steve, we've discussed my book before. My answer to that would be no. Right, so then what kind of rational constraints and limits should we be imposing on this build out on these systems?

And I think there's a lot of different things that we could talk about here in terms of constraints.

So one kind of constraint that a lot of people like NOAM Brown at OpenAI have pointed out is that AI systems, you can generate huge improvements in performance just by letting them think a little bit longer. And so you don't need to train these humongous systems.

The way Silicon Valley is doing, right, like GPT4, OpenAI's latest, which is consumed as much electricity to train, I think as like thousands of American homes in a year, thousands of typical American households in a year just to train ChatGPT4. Right. And the idea is that, well, we need to spend so much computing resources because that's how we'll get a boost in performance. Right?

These are known as the AI scaling laws.

And the thing is, there are ways to improve the performance of these models where you don't have to train them, you don't have to train such large models. Right. And an easy way is just to let them think a little bit longer. They get a huge boost you in of front performance just from that.

If you're willing to wait, you know, two seconds for the answer instead of like one second or something. Right. I'm just tossing out a tongue in cheek example, but you get the point, right? And that'll save enormous amounts on the training side.

Now it might consume a little bit more on the inferencing side, but for that you could do other things. Like you can impose rational curbs on supply and demand. So you could tell people, hey, from 10am to 9am or something, I don't know.

You can't use ChatGPT, obviously. OpenAI is never going to do this willingly, of course. What I'm talking about is policies, right? Social policies, public policy.

What is the role of that? That's one thing you could do is you could just limit people's access to these AI systems and that would scale down energy use enormously.

I don't need an AI overview for Google every time I search for something, that's what Google gives me now. And Google's doing that because it doesn't want to be left behind.

It doesn't want Everybody going to ChatGPT or to some other system that's giving them an AI response.

And so now Google has essentially insidified, you know, to quote Cory Doctorow, it's inshidified its experience and it's made every single answer pop up with the AI response first because it doesn't want to lose its potential customers to ChatGPT. It doesn't want people going away from Google the search engine and replacing something like Deep SEQ or chatgpt for their search needs.

Google wants to stay. So, you know, it's put AI for everything. You could do things where you could be like, hey, you don't need an AI response for everything.

Google or anybody else and the correspond for that. If you're worried about some kind of advantage. We can impose limits on how often people can use ChatGPT or something.

Right, If Google's worried about that. But the point is you can do things like that. You can curb supply and demand so that we're just not using it as much.

Once you do that, then you can begin to think about a more comprehensive solution about, well, what are the actual data center resources and other resources that we need in order to sustain sort of a more stable AI regime. Because I'm certainly not an advocate for just getting rid of generative AI and agentic AI and not using any robots whatsoever.

I don't think that's realistic.

I think there's a lot of fundamental things that are changing in the world, like the world's population, especially in more advanced countries, is aging.

So it's nice to have robots so you can offload some of that labor and tasks when our populations start to decline, as they're already happening in many areas. So you may know already that Japan is a big proponent of robotics. There are a lot of robots in Japan, and Japan's population is coming down. Right.

So if you're facing these long term demographic challenges, AI and robotics could be an important part of how we address that so that we still get the economic resources that we need to people. So I think there is a place for AI in our world. I'm not saying AI all bad, so let's just destroy all the data centers and get rid of them.

No, that's not what I'm saying. But I do think we have to be careful.

Well, we certainly can't keep going this direction where we just double data center usage every five years or so. I think that's courting ecological catastrophe. It's courting many public health crises, a lot of economic crises with jobs and things like that.

It's the kind of rapid, poorly planned change that will lead to a lot of social and political instability and a lot of harmful consequences for global civilization as a whole.

So I think we absolutely need to think about how we can have AI in our world in such a way that it doesn't bring down the ecological stability of the biosphere and in such a way that it doesn't induce massive political and economic crisis in human society.

Steve Grumbine: 00:58:16

You know, I brought it up a little earlier, but I am serious about this. I know that there are deep water filtration plants that can be used to bring clean, potable drinking water to communities.

And God knows we use pipelines for fuel. What would prevent us from Doing deep, well, desalinization type, you know, energy, you name it.

I mean, I've seen some of these massive units out there that both use natural elements of the wave to create the energy. It also at the same time cleans or desalinates the water so it's drinkable.

What would prevent something like this versus destroying the aquifers in these local areas? Again, I'm a nobody. I'm a noob. I'm just coming up with things.

Erald Kolasi: 00:59:02

It's a great question. And you're right, a lot of the resources are out there. A lot of that is already happening.

So some of these data centers are using wastewater from treatment plants and things like that, and we could build more. Certainly one area where that's a problem specifically with data centers is, like I said, they're interested in going where the power is cheap.

And sometimes where the power is cheap might be some random rural community out in the middle of nowhere. And unfortunately there they may not have a wastewater treatment plant or desalination happening nearby or.

And so you kind of need to use the local water supply that you have, and you may not have time or resources or money to run it through everything else. And so that's happening a lot, unfortunately. And it's what's leading to a lot of these water shortages and water quality problems that I mentioned.

And I think what your point ultimately highlights is the need to have a more comprehensive strategic direction so that we're not building data centers in Phoenix, Arizona, which is where many of them are going right now, which, as you know, is the western US has been struggling with massive droughts over the past few decades because of global warming. So they've been struggling with, you know, an on and off historic drought for the past four or five decades. Right.

And it's leading to a lot of water shortages, low levels in the Colorado River, a lot of political fights and negotiations among the states about how they're going to divide the water. And it's like in these areas, we're just saying, yeah, let's build a bunch of data centers here and make everything worse. Right.

So you're getting back to more comprehensive thinking, thinking about land use dynamics and where you want to place things. Does it make sense to build data centers in Phoenix, Arizona, or in the desert of Saudi Arabia? The answer is no.

That's going to lead to disaster in a couple of decades if you keep going down this path. And so that's where you go and you say, what are the resources available right now? Right. Where are the water Treatment plants?

Where are the things that we need or where can we build them?

Well, let's build data centers just over here or let's rein in the number that we're building because we want to put these wider constraints on AI, on the prevalence and diffusion of AI in our world. Right. So all of these questions sort of have to be tackled collectively and comprehensively.

Steve, you can't just look at desalination plants and sort of say, well, if we just build a lot more of those, I think we'll be good with the water.

Steve Grumbine: 01:01:12

Right.

Erald Kolasi: 01:01:13

The problem right now is you have to think about land use planning, because right now, since there is no coherent direction from the federal government, these things are getting built everywhere. Basically. There's no wider thinking about whether they should be built there. What are the existing resources there to support them.

And in many cases, as I've just explained, there are very few existing resources there to support these things. So then they're cutting laws and skirting regulations, all the things that we talked about, right? So it's such a complex multidimensional challenge.

Steve Grumbine: 01:01:42

If I can recap this, We've talked about regulation, we've talked about energy consumption, we've talked about water use, we've talked about the misplaced workers, we've talked about the role of federal and state in terms of understanding currency issue or currency user dynamics and the race to the bottom of the ever present desire for bringing the jobs and the taxes and all the other stuff that goes into a fundamental lack of understanding of the public to how money works. I mean, they are cheering on Doge, which is slashing and burning the infrastructure that could in fact regulate these things.

It's just an unfortunate truth, but that's kind of the essence of this. And we talked about the antiquated power grid and we've talked about integrated solutions versus capital, which is large and in charge.

With all that said, we even looked at the global elements here, including the manufacturing of these chips and all the rest of the elements that go into the AI ecosphere. Tell me your final thoughts on what you would like our listeners to take from this podcast and to maybe consider as they go forward.

Erald Kolasi: 01:02:52

I think what I want to tell your listeners is that you're not powerless. There's a lot of local communities that are fighting back and fighting back successfully against the expansion of these data center systems.

They're saying, no, you will not build here unless you do xyz.

So what I would say, especially at this moment, where I think a lot of people might be distracted with the situation at the federal level, because there's always a lot of news coming out from the federal government and let's just say most of it not great. So that I think there's a lot of people who are distracted at that level.

But make sure that you also pay attention to what's happening in your local communities. Right. Because before you know it, a data center could come nearby.

And if you're not aware of how big it's going to be, how much power is it going to use, how is it going to relate to the water supply, These are all things that could profoundly affect your life. Right. And so I would say educate yourself, organize.

Like I said, there have been a lot of successful efforts from different cities and counties to resist either the arrival of these data centers or their further expansion.

Even in places like Northern Virginia, where there are a lot of them already, there's some efforts to sort of try and constrain how they're built in the future.

So I think it's a great opportunity to apply some political pressure at the local level, get organized at the local level and understand that this AI could be coming for a community near you, not just in front of your screen, but literally physically right outside your home or near your home. Right. It doesn't have to be obviously right next to your home. It could just be in your general community and it'll affect your life just the same.

So, yeah, definitely get educated, organize, agitate at the local political level because you do have some power to push back against this.

Steve Grumbine: 01:04:38

Very good. All right, Errol, thank you once again, man. I love having you on and I hope we can have you back on a million more times in the future with that.

Tell everybody where we can find more of your work. Obviously, we pumped your book. I'd love to keep pumping your book. It's a great book. But where can we find more of your work?

Erald Kolasi: 01:04:53

Absolutely. Appreciate it. Yep. Substack is generally where I write, so I have a ton of great content out on Substack.

I have no plans to monetize any part of my substack, so people can go in there and read all the posts I've ever written, you know, all my notes. All of that is free. That's generally where I'm most active.

You can also check out my website, erickolassi.com and yet, like you said, my book the Physics of Capitalism was published earlier this year, so you can check that out, too. Thanks.

Steve Grumbine: 01:05:17

Fantastic. All right, so with that, my name is Steve Grumbine. I am the host of Macro and Cheese.

And this podcast is a part of a larger ecosystem called Real Progressive, which is a 501C3 not for profit. Folks, we live and die on your support. I know there are other groups out there that pay all their stuff. Thank you Errol for not paywalling yours.

We don't pay wall ours either. And sometimes you wonder if familiarity breeds contempt because if it didn't cost something, is it worth anything? I think it is if you think it is.

We need your support. You know, small donations, large donations, again, tax deductible. It's kind of a win win for all of us here, folks.

You can catch us on patreon patreon.com real progressives. You can go to our website realprogressives.org where we have a dropdown to go to donate.

You can also go to our sub stack Real Progressives and become a monthly donor there as well. We really need your help folks. This is not idle chatter. We need your help.

So if you consider the work we do here worthwhile, please consider supporting us. And also of course, please buy Harold's book. It is worth your time.

And with that, without further ado, we bid you adieu on behalf of my guest, Errol Colossi and myself, Steve Grumbine, behalf of the podcast Macaron Cheese for the organization Real Progressives. We are out of here.

End Credits: 01:06:49

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