Can't Let a Bad Thing Go to Waste

The last several years have seen a succession of speculative bubbles. First it was crypto, then "the metaverse", and now it's LLM-based AI. It's easy to blame it on a ZIRP environment, where venture capitalists have tons of money burning holes in their pockets and they want to invest it, but we're a couple of years into a period of rate hikes from the Federal Reserve, and we're still seeing huge investments in AI on the software side (OpenAI) and on the infrastructure side (NVIDIA chips, Microsoft Azure).

In all three of these bubbles, there are millions or billions of dollars being invested in technology that no one really wants or needs. So what is perpetuating this investment cycle? At its core, I think this is a question of excess fossil fuel capacity.

I was originally thinking about excess capacity and its role in our politics when reflecting on a local fight here in Hudson County against what's referred to as a "bed contract" with ICE back in 2018. Bail reform in New Jersey was highly successful at emptying out jails. With marijuana legalization on the horizon, local governments were looking at an approaching future with jails that were much emptier but were still too physically large to be staffed by a reduced amount of corrections officers. The way around this for some county governments, including Hudson County's, was to enter contracts with ICE to house detainees. While Hudson County's contract started in 1996, utilization went way up in more recent years, and this brought in $120 per night per detainee.

I was active with DSA at the time, and we were organizing in a coalition to get the county government to cancel the contract. We faced opposition not only from the county board of supervisors, but also from the Brooklyn and Bronx Defenders, since many of the detainees at the Hudson County jail were actually from New York and ending the contract would mean that they would be held in detention centers even further from their families. This is obviously a difficult thing to grapple with, but we had to look at the long view. As abolitionists, we maintain that the primary thing is to destroy the state's capacity to incarcerate. Our goal was and still is to make sure that these detentions never happen in the first place, which can be done by ending that capacity. At one board of supervisors meeting, one of us asked one of the lawyers from Brooklyn Defenders if she wanted to have a detention center built in Brooklyn and she acted offended. It's maybe a little rude but I still think that's the correct question to ask. As long as we allow the carceral system to maintain its size or grow, the state will find new ways to use it against people.

So how does this apply to speculative tech bubbles? Although it's still not at the pace it needs to be at to effectively fight climate change, renewable energy growth has been accelerating. Solar and wind keep coming in at faster and faster rates and are cheaper to operate than fossil fuels. Renewables could be taking over, but fossil fuel reserves and the capitalist class' rights to exploit them are still there. So instead of an energy supply that is largely from green sources, we see renewables getting a slightly larger piece of a pie that is much, much larger than it used to be. Energy prices are set by markets (along with subsidies), so that larger energy supply means lower prices and less profits. Given that fossil fuels are undesirable for climate and pollution reasons (unless you're really obsessed with rolling coal), if all our energy needs could be met by renewables, those reserves would be left in the ground. Of course, nothing could be worse than an excess capacity of exploitable resources like that, so new methods of energy consumption are needed. Crypto, metaverse, and AI all serve that purpose.

We have to look at the common threads connecting what gets funded. While it might be hard to believe, there are still startups coming up with socially useful products (e.g., Tailscale). But they won't get the billions that companies like OpenAI or Anthropic are getting to generate CSAM and code with security vulnerabilities. Those AI companies are getting investments because of how energy-intensive they are. Data centers are engines for turning energy into cash, and the AI output is a byproduct that they can try to sell as the future. Even ignoring water usage, it doesn't matter if they say that their data centers are "green". It's an expanding energy market, and fossil fuel interests want to make sure that demand can meet supply. That's why you see Saudi Arabia creating a $100B fund to invest in AI; they are making sure that their customers grow.

Some AI enthusiasts point to increasing efficiencies, like with NVIDIA's B200 chips reportedly using 25x less energy than their H100 chips. That would be good, except the companies using these chips will just expand their usage by at least 25 times. If the energy supply is still there, they will use it. If we actually want to fight climate change, we need to do the equivalent of ending bed contracts: decommission fossil fuel infrastructure. As long as it exists as an asset on the capitalist class' balance sheet, it will be exploited.

So what happened with the Hudson County jail? The bed contract was eventually ended in 2021, and the detainee contract was replaced by a similar arrangement, this time to incarcerate people from the closing Cumberland County jail. In some sense it feels like a lateral move, but ultimately the move reduces the state's capacity to incarcerate. Consolidation is the near-term step on the path to abolition. It's an incremental win, but a win nonetheless. Next, we need to destroy the capacity of fossil fuel companies to pump CO2 and methane into the atmosphere.

At the end of the day, the basic structure of the issue is the same: a bunch of assholes have an excess capacity of something that's bad for the world. That's their problem, but they're going to make it your problem.