AOC co-signs a moratorium with no exit strategy
Bernie Sanders and AOC dropped a bill yesterday to freeze all new data center construction in the US until Congress passes what they’d consider adequate AI regulation. The idea is to slow down the billionaires long enough for the rest of us to catch up.
I KNOW. I KNOW. You’re probably thinking – GREAT IDEA.
But here’s why you’re wrong.
Here’s what nobody at that press conference addressed: we’re already in a supply crisis.
Every major AI company – Amazon, Microsoft, Google, Meta, Oracle – is reporting that their markets are supply-constrained, not demand-constrained.
That means there is more demand for AI compute right now than there is capacity to serve it. Microsoft has $80 billion in unfulfilled Azure orders sitting on the books – not because customers don’t want the service, but because the company literally cannot find enough electricity to power the GPUs already sitting in its warehouses.
Microsoft’s own CFO said on an earnings call, “We are, and have been, short now for many quarters. I thought we were going to catch up. We are not. Demand is increasing.”
So when Sanders and AOC propose halting new data center construction, they’re not proposing to pause a system with room to breathe. They’re proposing to freeze the supply side of a market that’s already failing to meet demand – with no mechanism to reduce the demand side at all.
So – what does suspending data centers actually do?
It makes these companies more powerful than ever.
Google is not going to stop using AI because the moratorium passed. Meta is not shutting down its model development. The five biggest tech companies alone are planning to spend somewhere between $660 and $690 billion on AI infrastructure in 2026. If they can’t build in the US, they’ll build somewhere else. These companies have legal teams, international operations, and a financial incentive measured in hundreds of billions of dollars. A US construction ban is a paperwork problem for them, not an existential one.
So, let them build data centers in other places – right?
Well. As this country’s compute needs go up and data centers to service that compute stop growing with it – what does that mean?
Economics 101 – the price will go up.
That means that the small healthcare startup trying to run AI diagnostics on Azure – their costs goes up – and so do their prices. Same story for the independent developer paying for API access. The community college using AI tutoring tools. The non-profit running constituent services on a ChatGPT subscription. When supply is constrained and demand keeps climbing, the companies with pricing power maintain premium prices – and that pricing power gets stronger as the supply-demand gap widens. The Microsofts and Googles of the world can absorb higher compute costs. The little guys get priced out.
Listen. We are WAY passed the world giving up AI – so if you don’t like AI – get over it. You’re using it right now.
This moratorium does not have anything to do with getting rid of AI use and it doesn’t redistribute power away from big tech.
It consolidates it.
The existing compute infrastructure stays in the hands of whoever controls it now – which is the exact handful of billionaire oligarchs Sanders named at the podium. They just get to charge more for access because their competitors can’t build alternatives.
And none of this touches the fact that most lawmakers in both parties have already said the moratorium idea is dead on arrival. So what we actually got yesterday was a press conference about a bill that won’t pass, built around a mechanism that would backfire if it did.
The water and electricity concerns are real. The civil rights concerns are real. The job displacement stuff – also real.
But “freeze all construction indefinitely until Congress gets its act together” isn’t a policy solution. It just shows once again that the people in charge – even the “good ones” – don’t know what the fuck they’re doing.
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