Behind the Curtain: The new existential threat to AI

Forget energy.

Forget chips.

Forget China.

The most clear and present danger to AI and any AI-related economic boom is rapidly rising public opposition to U.S. data centers.

Why it matters: Republicans and AI CEOs are in full panic mode watching politicians and the public turn on the physical engines of AI growth.

In private, they tell us they can't find a compelling message to shift opinion fast enough.

Their nightmare — a political and economic daisy chain that cripples the AI revolution — is already taking shape: Voters revolt against data centers over electricity bills, water use, giant warehouse-like developments and fears about AI eliminating jobs.

Democrats race to capitalize, competing to impose tougher restrictions or block projects altogether.

Republicans — watching candidates get punished in places like Ohio — retreat from an industry they've spent years championing.

The pipeline of new data centers slows, constraining the computing power AI companies need to keep improving their models and products.

Investors question the staggering spending, borrowing and valuations built on expectations of relentless AI growth.

Zoom out: The AI boom has become dangerously intertwined with the U.S. economy, meaning this will ricochet far beyond Silicon Valley.

Goldman Sachs estimates U.S.

AI investment will hit about $600 billion this year, equal to roughly 2% of GDP and 10% of business fixed investment.