"AI is a multipole Enron" | David Gerard
Summary
Will Geyer and David Gerard discuss Oracle’s attempt to invoke force majeure for a delayed New Mexico data center, arguing that regulatory rejections are not "acts of God." They explore how power and water constraints, rather than chips, are the primary bottlenecks for AI expansion, noting the transition of crypto miners into this sector. The conversation also covers the political backlash against data centers in the US and UK, the Enron-like accounting risks in AI valuations, and the likelihood that the current infrastructure bubble will pop due to unsustainable debt.
Topics discussed
Intro: Local water and noise issues with data centers
Show intro and guest David Gerard welcome
Oracle invokes force majeure for New Mexico data center
The scale of 2GW gas power and local opposition
Reality check: Gigawatt data centers don't exist yet
Oracle's rent liability and Blue Owl Capital negotiation
Legal status: Negotiation vs. litigation with lenders
UK N-Scale Loughton site delays and grid capacity limits
Power as the new bottleneck: Gas turbines and noise
Crypto miners transitioning to AI data centers
Political backlash: Texas moratorium and local bans
Why locals hate big data centers: Water, noise, and secrecy
The reality of local water consumption and legal secrecy
AI doomsday as a distraction from real environmental harm
Brookings report: $10T infrastructure and revenue gaps
Enron comparison: Off-balance sheet vehicles and valuations
OpenAI and Anthropic as the core of the AI economy
OpenAI IPO delays and executive departures
Prediction: Jupiter project failure and Oracle's fate
Outro and where to find David Gerard
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