Dave Karpf on the data center backlash

• Dave on Bluesky

• The Data Center Bankshot, by Dave Karpf (May 28, 2026):

The single best thing that could happen to the AI industry right now is for the current finance bubble to pop. The sooner the bubble pops, the better. This is both because smaller finance bubbles are less calamitous than larger finance bubbles (replaying the 2000 dotcom crash is better than replaying the 2008 great financial crisis) and because, right now, Sam and Elon and Dario and Alex Karp and Marc Andreessen are calling all the shots. After the crash, their power will be constrained and contested. Decreasing their political power is just a fantastically pro-social outcome.

The trouble is that finance bubbles aren’t easy to pop. As Keynes supposedly once remarked, “the market can remain irrational larger than you can remain solvent.”

The standard approach is to loudly declare, with clear and compelling evidence, that the market has dramatically overestimated the value of a company (or a cluster of companies, in this case). That’s what triggered Enron’s downfall: a Wall Street Journal reporter raised the alarm, then Jim Chanos shorted the company and started making a public stink about their financial flimflam. The house of cards collapsed soon after.

That approach doesn’t seem to be working here.

• Dave Karp’s newsletter on Beehiiv (a better alternative to Substack, which is funded by Andreessen Horowitz)

• Yeah, so... Substack, I’m out. (by Dave Karpf, Feb 20, 2026)

• What Should We Have Learned from the Collapse of the New Economy (1998-2000) (by Dave Karpf, Feb 1, 2024):

The New Economy was nonsense! It was an identical type of nonsense to the Number Go Up crypto nonsense! Instead of celebrating the new billionaires who emerged from the wreckage, and trusting them to do better next time, we should focus on the human tragedies, and develop safeguards so they can’t keep pulling the same ridiculous, profitable-only-for-them stunts!

That, ultimately, is what I think we should have learned from the collapse of the New Economy. Anytime the tech barons and financial analysts start insisting we’re entering a new economic age of limitless abundance, look very carefully at their slide decks and notice that its pure vapor. Stop treating billionaires like viceroys to the universe. Concentrating power in their hands and hoping they’ll do good with it never turns out well.

• It's Giving Enron: "On the AI bubble, and the various echoes of the dotcom crash." (by Dave Karpf, Oct 14, 2025)

• The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron by Bethany McLean and Peter Elkind

• Dot.Con: The Greatest Story Ever Sold, by John Cassidy

• Hyperland documentary, featuring Douglas Adams (interviewing Nicholas Negroponte and others)

• Sierra Club

• Data Centers Are a Distraction. The Real Fight Is Elsewhere. (by David Wallace-Wells, NYT, March 4, 2026):

Increasingly, voters seem to be trying to take things into their own hands, rising up in opposition to the intrusion of A.I. infrastructure into their local communities. These fights are likely to produce environmental victories for those communities. But they are also a game of Whac-a-Mole, one that activists and anxious citizens are playing in part because, compared with diffuse fears about A.I., the fight against data centers is targeted and tangible.

• Working class neighborhoods are resisting data centers at 5 times the rate of wealthy ones (Brian Merchant, June 5, 2026)

• Kevin O’Leary Pleads With Locals to Allow His Massive Data Center If He Shrinks It Down to the Size of One Manhattan (Futurism, June 5, 2026)

• AI Will Consume as Much Water as a Billion People By 2030, UN Report Estimates (Futurism, June 6, 2026):

Factoring in inference costs, data centers powering AI will use 945 terawatt-hours of electricity by 2030, the report found, which is triple the combined electricity use of Pakistan, Bangladesh, and Nigeria — which, altogether, are home to over 650 million people.

That brings us to the water footprint. By that same year, AI’s thirst will see it consume 9.3 trillion liters water — which is equal the basic annual water needs of all 1.3 billion people in Sub-Saharan Africa.