AI Data Center Moratorium Will Cause US Recession - BlackRock Says AI Fears are "Misinformation"

[00:00:00] Speaker 1: As another reminder that the AI build-out is probably not going to end well for us, coming from CNBC, BlackRock's Larry Fink warns a data center moratorium could trigger a recession. We can't stop building AI data centers or we'll have an economic recession. Regardless of whether this technology is actually useful or economically valuable, that is not the important thing to look at right now. The important thing to look at right now is that if we don't keep building these monstrosities, we are going to go into recession. I think about this with David Sachs. When I was doing the elliptical machines, when I gimped myself and I couldn't run, I'd be on the elliptical machines at Planet Fitness and I would listen to podcasts and I'd listen to the All In podcast. Oh my golly, if you want to get the blood pumping, listen to the Roligarchs just go full douche nozzle on that particular podcast. One of the curious things there is David Sachs. There's this guy David Sachs. He's been part of the Trump administration, a whole bunch of other things. And he was talking about AI in this one podcast. I wish I remembered which one it was because this really is true. And he was talking about how all Americans needed to support artificial intelligence. Because, wait for it, whether or not you believe that there was an actual value to artificial intelligence, whether or not you thought artificial intelligence was a good idea, the thing was is that the build-out for artificial intelligence was driving so much of the U.S. economy that if you cared about the United States, you should want the AI build-outs because it was building the U.S. economy. That, my friend, is literally one of the arguments from supposedly one of the smartest people in the room for why we should be building all this AI crap out. Look, it may not have very much economic value, but simply building it creates a better economy. And I think this is the weird insanity we're at at this point in time where when you look at it, it is becoming ever more questionable by the day whether there's real economic value in the AI stack or whether the economic value is anywhere near what they simply need it to be, right? And again, you see them now just trying to shove AI agents down everybody's throats, right? Every normie needs an AI agent. And the important thing to understand with AI agents, basically, this is code that's running on what's called a wild true loop, essentially just continually burning tokens. And I think about it. Again, I think about this from a workflow standpoint. I think about this from a productivity standpoint. I think about this for many different reasons. And I can't fathom why I need an AI agent. Like, I need better search functionality on Google. Like, that would be useful. Maybe get rid of the AI component and actually make the search a little bit better. That would be nice. I need better recommendation engines on Netflix, as I've talked about before, right? If AI is so powerful, I don't understand why I don't turn on Netflix and I have one option, right? Think about this for a second. If AI was nearly as functional as they claim it to be, again, let's not even get to the whole carrying disease or solving science thing. Why don't you open up Netflix and there's one option? Think about this. Netflix has so much of your information, right? Many people have had Netflix for a decade at this point in time. At very least, years. Plus, they can correlate what they know about your account to all this other shit they're collecting, right? Plus, they know things like geolocation and all that other kind of thing. So, like, think about it. Think about, like, when you go to Netflix now. And think about how you just sit there. Like, I sit there. Like, sometimes I will sit there for half an hour trying to flip through Netflix, trying to find something. And to be clear, I'm not a snob on Netflix. Cowboy Bebop was fine. Look, I was not a fan of the original Cowboy Bebop show. I can say Cowboy Bebop was not the greatest sci-fi show, science fiction show to ever be created. But it was fine. I enjoyed myself enough. All the way up to that very last scene with the red-headed kid. Ah! [00:04:44] Speaker ?: Right? [00:04:44] Speaker 1: Anyways, I like Cowboy Bebop. Cowboy Bebop's fine. Right? Again, like, I saw Lantern. I thought Lanterns was pretty good. I am not a snob when it comes to content. And yet, when I open up Netflix, I'm sitting there for half an hour. Like, it's no better than it was 10 years ago. I open up, you know, Amazon Video. Same kind of shit show going on. Again, like Apple Music. I think one of the interesting things right now. Again, you think about the abject failure. The abject failure of artificial intelligence. There's something called long-tail economics. So long-tail economics, the idea for it, came back in about 2000. Around about 2000. And the idea was, what happens if you have unlimited shelf space? Right? It was an idea that didn't quite work out the way we thought it was going to work out. So anyways, back then, we had things like Tower Records. Or we had like Barnes & Noble or Crown Books or whatever else. And so one of the problems is when you're trying to sell a product, you only have a certain amount of shelf space. Right? And so the thing is, is you're only going to sell the most popular thing on the shelf. The shelf space itself is valuable. And so you're only going to put the things on the shelf that you think are going to sell. And so that was a problem back then. If you went to places like Crown Books or Walden Books, they're relatively small bookstores. Let's say 15,000, 1,500 square foot bookstores. All they sold was bestsellers. Right? If you needed anything like just that wasn't a bestseller, you probably weren't going to buy it there. Because they only had so much shelf space. So the idea with long tail economics, when the internet became really popular. And again, you start having companies like Amazon or Netflix or whatever else. Is what happens when you have unlimited shelf space. And so the idea with long tail economics is they have a bell curve. Right? And so on the bell curve, there's like, you know, the, uh, the, the first movers, right? The, the people that buy something first. And then you have like, when something becomes normal, everybody wants it. And then after that, the demand for something falls. And so the interesting thing with long tail economics is the idea is that the demand for products and services fall. But if you have enough shelf space, it never falls to zero. There's always some demand. If you can, if you have unlimited shelf space and can sell to 8 billion people, right? If you have a thousand square feet of shelf space and can only sell to, to a hundred thousand people in Asheville, right? At a, at a certain point in time, wherever the drop-off is, you're going to have to cut off and say, we can't sell that product because there's just simply not enough demand for it. Right? But again, if you can sell to 8 billion people and you have unlimited shelf space, what you find on that long tail is that the demand curve goes down, but it never hits zero. What we didn't realize with that. And again, I remember when long tail economics was brand new and I thought, this is fucking awesome. This is great. Anyways, the problem with long tail economics that they didn't go into at the time is that like the human brain only has enough shelf space. Like I think about this with my HomePod. So I've got one of the first generation, I've got the first generation HomePod to be clear. I love it. I cannot, I cannot get an Uber on it or order pizza on it, but it's really good at playing music. Here's my problem. Here's my problem. I don't really remember any musician names in this. I'm not even joking here. I don't really remember any munition names. So on my, on the HomePod that I think puts out really, really, really good audio, I always listen to Selena Gomez. I'm not even joking. If you're coming to my house 90% of the time, I will be listening to Selena Gomez. Why? Because I'm up there and I'm cooking or I'm doing the dishes here, whatever else. I want to listen to a little music. And I remember Taylor Swift and Selena Gomez. And so I'll say, hey, blah, play Selena Gomez, because that's the issue. Although, although the HomePod essentially has unlimited shelf space for music, my brain only remembers Selena Gomez. Ergo, I only ever listened to Selena Gomez. And why I bring this up is think about this in 2026. Think about how much information Apple knows about me. And so again, Apple, so I have Apple music on my normal computer. I have Apple music on my, uh, my watch. So when I go running, right. And so again, when I'm doing other things, I listen to other music. Sometimes I listen to Tom McDonald. Oh, white boy crying. That boy fucking cries. And then I'm like, less of this, less of Tom McDonald. Jesus, that boy cries. Anyways, so it has, it has all this information. But like when I end up going to my HomePod, I always listen to Selena Gomez, because it doesn't really give me, like I can kind of say play music and it says it's really weird. And that's the interesting thing. Like with the, with AI is beyond science or curing cancer or whatever else. It can't even create a recommendation algorithm worth a damn. I really want you to think about this for a second. All the, all the magic we've heard about AI. Are your recommendation algorithms better in 2026 than they were in 2016? Is trying to find something now actually worse than it was in 2016? Like I'm just, I'm just putting things on the table. You can do it the way you want. And so the weird thing, the weird thing is, is that AI is failing to do some of the most basic tasks you would expect this amazing technology to be able to do. It is not providing the value. Now, again, if you're a coder, don't get me wrong. AI for coding, fucking awesome. I like it for coding for certain things. It's very good, but for many other things, it's just, just failing miserably, but we're told what we're told, but we have to keep building out this technology, even though they are not proving a real value proposition to the American people for this technology. So, at this point, we have to continue building out, not, not even, not even because this shit will cure cancer, not even because this shit will solve science or whatever else. We are literally now being told we have to continue this idiocy. See, we have to continue these buildouts simply because if we do not, we'll destroy the American economy. BlackRock CEO Larry Fink warned that a halt to data center construction could trigger an economic slowdown. Quote, if we have a moratorium of some sort in this country, we will be in a recession. So, if we slow down, if we stop building these AI data centers, right, one singular component in our economy, that is going to put us into recession. Fink told CNBC Wednesday after BlackRock reported better than expected third quarter earnings early Wednesday. Quote, so much of our economy is based on the buildout of this CapEx. It's not that so much of our economy is built on the products of the buildout of the CapEx. So much of our economy is literally wound up in the buildout itself, Fink added, referring to the massive investments made to develop AI infrastructure. Fink's warning comes as strong local opposition to data center construction has emerged as a key issue in the November 3rd midterm elections as communities struggle with rising utility costs, water use, environmental damage, and questions over investment transparency. While Fink acknowledged fears about the data center buildout, he also noted, quote, most of it is on misinformation. And that is the other thing that we are hearing from so many of these people out there, right? If you have a problem with artificial intelligence, if you have a problem with data centers, it's not that you have a problem. It's not even that, look, you have a reasonable problem, but fuck it, society has got to move on, right? Here's the thing. I think that's one of the things that gets left out of conversations many times in the modern world is sometimes you can have a legitimate problem. You have a legitimate problem. You have a legitimate right to be angry and you're fucked. Don't know what to tell you. You have every right in the world to be pissed off on this thing that is occurring, but sucks to be you. But they're not even doing that. They're not. Again, at this point in time, it is not even arguing that these data centers are going to be so pivotal to American transformation, to American exceptionalism, whatever the fuck that actually means, that even if you suffer because of it, it is simply required for our society. Again, you think about when the interstates were being built out, right? The interstates built out 60, 70 years ago at this point in time. So the people that were hurt from the interstate build out, right? They were hurt a long time ago. So you don't think about, right? If you ignore the people that are miserable, if you ignore the people that are in pain, then everything's good, right? Anyways, when the interstates were getting built out, right? Again, we have things like eminent domain. They came through with eminent domain and they took that land. They quote unquote bought that land and they caused a lot of problems, right? If you had a large tract of land and all of a sudden an interstate got through the middle of it, like that's a big fucking problem. Like Uncle Sam is like, here, we're going to pay you for 50 acres of land. Let's say you have like a thousand acres of land. We're going to pay you for 50 acres of land to put the interstate through your thing. But now you've got like 450 acres on this side and you have 500 acres on this side and you have an interstate that goes through the middle of it, right? You don't even have a highway. If you have a highway, maybe you can get across. You've got an interstate that goes through problems. And you know what we said collectively as a society? Sucks to be you. Sucks to be you. But I think the interesting thing, again, this is what we're now seeing as AI revolution. They can't even argue that. They can't even argue that the value of the output of artificial intelligence will be so transformational that even if you are harmed because of its creation, it is just a cost that society has to pay, right? Again, we talk about aggregates. On the aggregate, society will be better. But on the individual level, eh, sucks to be you. They can't argue that anymore. They've stopped arguing that. They're arguing if the data centers stop, it puts us into recession. If you argue against the data centers, right? That's Chinese misinformation, right? Or propaganda. If you have a problem with it, it's misinformation. They do not have valid arguments for pushing this horse crap forward. It is profiting them. It is profiting them by tremendous amounts of money. And when all of this collapses, right? We privatize the gains and socialize the losses. Listen to what these people are saying. The states are high. Wall Street analysts estimate total AI capital expenditures could climb above $1 trillion in 2027 and total in excess of $5 trillion by 2030. Quote, data centers are not the problem. They're creating more new jobs than ever before. The BlackRock CEO explained. The scale of investment has created demand for construction workers, physical digital infrastructure, AI compute hardware, and energy infrastructure to secure grid power, he said. And again, like, like, like, like, like, like, just, just read what that is. The scale of the investment has created demand for construction workers, physical digital infrastructure, AI compute hardware, and energy infrastructure to secure grid power. So basically building shit. So basically his argument for why we need to build our data centers would be basically the exact argument, same argument for building a high-speed rail. Hey, have you thought about high-speed rail? Have you thought about houses? I mean, like, look at this argument. Like, it's creating demand for construction workers and all that. Like, hey, what if we build houses? What if we need to build enough houses for our population? Notice what he's not arguing. He's not arguing that this technology is going to cure cancer. He's not arguing that this technology is going to fundamentally make our lives better. He is not arguing that this technology is going to make our country more secure. He's arguing, hey, look at all the construction jobs that have been created. Fuck me. Fuck me. The AI revolution is about fucking construction jobs? [00:18:04] Speaker ?: Fuck! [00:18:09] Speaker 1: Oh, lordy. You gotta laugh. You gotta laugh. You get very depressed very quickly. So, yeah, this is what we are seeing more of. Again, as I've talked about before with David Sachs, I've talked about that with David Sachs over the past six months. Because I thought that was just the biggest amount of horse crap I had heard in a long time. And I think we're going to be hearing more and more of this. I think about this with a YouTube channel I watch called Maxonomics. I like Maxonomics. It's very well done. I do believe it's bought and paid for by somebody. I don't know who. Somebody bought and paid for it. Because one of the interesting things with Maxonomics was talking about that. Because he was talking about the U.S. economy and how the U.S. economy, it's not all about AI data center build-outs. And how you can tell, literally, his argument for this was how you could tell is because of flat semi-truck trailers or haulers or whatever. So, you got the trailers, right, with the walls on it. And then you have the flat beds that you can haul behind a semi-truck. And he said, if you look at it, if you look at the demand for these open, these flat semi-truck trailer thingies, that that's through the roof. The price of them is just, like, doubled or tripled over the past couple of years. And they're basically sold out or whatever. And that shows you how robust the U.S. economy is. And I'm like, I mean, if you need to send I-beams to a data center, wouldn't you put it on one of those truck beds? If you needed to, I don't know, send a lot of, like, weird-ass HVAC equipment, wouldn't you put it on one of those truck beds? If you needed, like, big-ass spools of fiber optic cables and power cable, wouldn't you put it on all those truck beds? So wouldn't the massive demand in those open trailers at the exact same time we're having these massive AI buildouts basically correlate the demand for those things to the AI buildouts? Which then means, no, the economy is actually not doing that fucking good outside of this AI boom. But anyways, that's why I'm just, I'm just, I'm just looking at this. And it's just, it is all just crazy. It's just crazy. We have to support, we have to support this insanity. We have to support this insanity for construction jobs. For construction jobs. Regardless of SpaceX having, like, 60 natural gas temporary power generators that are poisoning African Americans in Memphis, right? Actually, you know, causing detriment to African American lives in Memphis. The reason that we as a society have to allow this is for construction jobs. What? Oh. Here's the thing. Dear black people. Dear black people. See, we were going to try to make your lives better. But, you know, then some other things came up. Some other things have come up. This whole AI thing has come up. So, look, look, just as soon as we've done the AI build-out, then we'll stop poisoning your neighborhoods. You know, as long as nothing else came up. Anyways, I don't know. What do you, what do you think about this insanity? What do you think about looking at the AI build-out through the prism of, literally, construction jobs? Put your thoughts down below. Do remember, I'm going to be going back to Baltimore, Maryland. Hopefully, at some point, we're going to be doing free hands-on technology education classes there. Python, Linux, artificial intelligence, databases, data stores, all kinds of different stuff. If you're interested, there's a link to the meetup group down below. You can become a member for free, and you can show up for classes for free. Free hands-on technology education that empowers you to do something to make your life better. What? Look at this Eli, the computer. It's 2026, and he's still talking about using technology to make people's lives better. What the fuck is wrong with this boomer? This boomer. Anyways, if you like these episodes, do remember, there's a link for Spotify and for Apple Podcasts down below. And if you want to follow me on LinkedIn, there's also a link down there. With that, see y'all later.