Just Unplug AI? Why It Won't Happen

You’re not going to like this – but you should probably read it anyway.

Last week I wrote about why we can’t unplug AI. There’s almost 3 million free AI models out there. People have downloaded them billions of times. They’re on hard drives in a hundred countries and nobody’s ever getting them back.

Guess what? There’s an even bigger problem – and I know this is just me beating a dead horse for long-time readers – but it’s still true.

Even if every one of those models vanished tomorrow, we still couldn’t shut AI off. The whole US economy’s jacked up on it.

And I don’t mean big business the way Netflix is big business – something you’d miss for a couple weeks and then get over. This is bigger.

In the first three months of this year the economy grew about 2 percent. Three quarters of that came from one thing, which is companies building AI. The data centers, the chips, the software, and the buildings they all go in. That’s worked out from the gov’t’s own numbers, not mine.

Strip that out and growth drops to somewhere between half a percent and 1 percent, depending on whose math you use.

Half of America’s growth right now is one industry. And if that makes you mad – fine – but I didn’t create this issue, so aim your wrath at the guilty parties – not me.

Satya Nadella’s Microsoft, plus Amazon, Google, Meta, and Oracle, are on track to spend $775 to $800 billion this year, most of it on AI. Switzerland makes about a trillion a year. That’s the whole country.

They didn’t pay cash for all of it either. Morgan Stanley says AI companies will borrow close to $570 billion this year. That’s double last year. The money’s already spent and sitting in the ground. What’s left is the stock price.

AI stocks are 40 to 45 percent of the S&P 500. That’s the index most 401k plans are built on. If you’ve got a retirement account at work, you own some of this. More than half the money in US funds now sits in funds that just buy the index. So it got bought for you.

I don’t own any stocks, but we can just look at what happened to folks during the last recession to figure out what the outcome might be for people who do – especially for people whose entire retirement and savings are tied to them.

Raise your hand if you’re willing to have your net worth take a huge hit to get rid of AI. Because if one domino falls, they all do.

In 2023 and 2024 the S&P had its best two-year run since the dot-com days. AI stocks did almost all of it. They’re 45 percent of the index now. The Kobeissi Letter, which ran those numbers, says no single theme has ever dominated stocks and bonds like this.

Now the power. Goldman Sachs says US data centers will pull about 41 gigawatts this year and 66 next year. One gigawatt’s about one big power plant running full out. So that’s forty power plants, for servers. Power companies are turning old nuclear plants back on and building gas plants to keep up.

You might be more worried about the environmental side of this. That’s fair. But the faster way down is the people – not just the AI people, but the HVAC guys, the electricians, the data techs. I don’t know every job on a site like that. Nobody publishes a clean count of how many folks are out there building it, either. What I do know is construction as a whole was short about 439,000 workers as of last November, on top of everyone already working.

S&P Global ran the numbers on a full crash. They got about 2.5 million jobs gone. The industry’s own study says it supports 5.5 million jobs.

And that’s just us.

Foreign investors own about $19.8 trillion of our stock market. That’s 18 percent – a record high, according to Apollo’s chief economist. Pension funds in Britain, Canada, and Japan have big chunks of their money in foreign stocks – Canada’s national pension fund has 47 percent of its money in American assets. When it drops, it drops on them.

And that’s before the countries making the parts. In South Korea, chips were 47 percent of everything they shipped out in the first ten days of September. That’s almost half of what they sell abroad. Taiwan’s worse off, because one company – TSMC – is 42 percent of Taiwan’s whole stock market. They’re expecting their best growth since 1987 on the back of it.

I had no idea about the Taiwan or South Korea numbers. Talk about putting all of your eggs in one basket.

Back in January, the IMF bumped up its forecast for the world economy this year, partly on AI spending. In the same report it called an AI bust one of the biggest risks out there.

So it’s not just your 401k. It’s your 401k, a retiree in Manchester, half of South Korea’s paycheck, and whatever Taiwan’s got instead of a plan B.

So when somebody says we should just pull the plug, I need them to hear what they’re actually saying. They think they’re unplugging the Coke machine in the cafeteria and cutting off the rowdy kids – but the Coke machine’s holding up the roof.

Pull that plug, and you don’t get a quiet lunchroom. You get a recession – retirement accounts drop by a third or more, the debt goes bad, and the construction stops. People stop paying their mortgages, their car payments, and their credit cards.

And the people who lose the most aren’t Sam Altman or Jensen Huang, who already cashed out on paper and will be fine no matter what happens.

We already did this with houses. Blackstone sent people to foreclosure auctions with bags of cashier’s checks and picked up 50,000 homes for $10 billion. Just five of the firms that showed up during that crisis own about 340,000 single-family homes now, according to Congress’s own researchers. Those houses didn’t disappear. They just stopped belonging to regular people.

When an industry gets this big this fast, it stops being something the gov’t regulates and starts being something the gov’t has to protect. Washington can’t let it fall apart, cause if it falls apart the whole economy goes with it.

Every one of these companies knows that, and it’s the best leverage anybody’s had since the banks in 2008.

And when you hear these guys talk about slowing down and asking for rules and being so worried about the thing they built – remember they made it so big so fast that nobody can afford to say no to them. That wasn’t an accident.

Look, I told you it was worse than people think. We’re in one helluva mess here. But I keep bringing it up to help people understand the real size of the problem.

And I know somebody’s going to ask – okay, so why are you telling us all this if there’s nothing we can do about it? There’s plenty we can do. It’s just not the thing people want it to be. I’ve written a few pieces on what I think the actual fixes look like, and I’ll drop those links in the comments. Not one of them involves an off switch.

Saying we should just unplug AI is like saying we should just stop using cars – cause they’re pretty bad for the environment – and for now they kill way more people than AI does.

But that solution left the building a long, long time ago. That door’s closed. Regulation’s the train still sitting in the station, and it’s leaving with or without us.

And yes – I know that Anthropic, Elon, and Sam all said on September 12th that we should slow training and bring in outside safety inspectors. That’s great, but it still doesn’t solve most of the issues AI has caused.

I’ve seen a theory going around that they’ve agreed to do this because they’re running out of money & AI advancements have slowed. So now they need more safety measures and gov’t constraints as cover for shareholders, framing the slowdown as a regulatory issue outside their control.

And now, if anything goes wrong, they can say, “Hey! We warned everyone – why didn’t Congress do anything?”

And, TBH, they won’t be wrong.

More of my thoughts on how we should regulate AI after the sources.

Sources

What I think we should actually be doing

Correction, September 27th, 2026: This essay first said the industry had 439,000 to 499,000 openings it couldn’t fill – construction as a whole was short about 439,000 workers as of November 2025. It also said the firms that bought up homes after the crash own 170,000 to 300,000 of them – five of those firms alone own about 340,000; that the S&P’s best two-year run since the dot-com days ran from May 2024 to June 2026 – it was 2023 and 2024; and that my earlier piece and the Anthropic, Elon and Sam statements came out “yesterday” – both came out the week before. And it said the IMF raised its forecast for the world economy this year because of AI spending – that raise came back in January and was only partly about AI, and the IMF has cut its forecast twice since the war in the Middle East started.

Update, September 27th, 2026: A few lines now say who ran the numbers and when, and a few source descriptions now match what their pages actually say. And the pension-fund line now says how much of their money those funds have abroad and in American assets, with sources.

Everything I have written about AI is in one place at rachelandthecity.com/the-ai-files.

Sources

What I think we should actually be doing

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