Yves here. This post does a good, layperson-friendly job of describing how the tech-overlord-envisaged explosion in data centers is even more problematic than you might have realized. It adds in a new impediment to the buildout, which is transformer scarcity.

By Michael Kern, newswriter and editor at Safehaven.com and Oilprice.com. Originally published at OilPrice

The Cloud” might be the greatest branding trick in history. It sounds fluffy, ethereal, and notably light.

It implies that our digital lives…our emails, our crypto wallets, our endless scrolling…exist in some vaporous layer of the atmosphere, detached from earthly constraints.

But if you actually drive out to Loudoun County, Virginia, or stare at the arid plains of Altoona, Iowa, you realize the Cloud is actually just a very big, very loud, and very hot factory.

We’ve been telling ourselves a lovely story about the energy transition. We were retiring coal plants, building wind farms, and decoupling economic growth from carbon emissions. It was all going according to plan.

For years, the tech sector achieved relative decoupling…

Moore’s Law kept server efficiency gains ahead of the curve, allowing internet traffic to surge while power demand grew slowly.

The exponential curve of AI, however, has shattered this delicate balance. AI workloads are so compute-intensive that demand is now skyrocketing faster than efficiency gains can compensate.

This is a re-coupling with physics..and the defining narrative of the next decade isn’t about supply anymore.