Keep asking questions like that, and you’ll get in trouble with Hal.
Posted on 01/03/2026 6:38:01 AM PST by Twotone
Welcome to the techno-feudal state, where citizens are forced to underwrite unnecessary and harmful technology at the expense of the technology they actually need.
The economic story of 2025 is the government-driven build-out of hyperscale AI data centers — sold as innovation, justified as national strategy, and pursued in service of cloud-based chatbot slop and expanded surveillance. This build-out is consuming land, food, water, and energy at enormous scale. As Energy Secretary Chris Wright bluntly put it, “It takes massive amounts of electricity to generate intelligence. The more energy invested, the more intelligence produced.”
That framing ignores what is being sacrificed — and distorted — in the process.
Beyond the destruction of rural communities and the strain placed on national energy capacity, government favoritism toward AI infrastructure is warping markets. Capital that once sustained the hardware and software ecosystem of the digital economy is being siphoned into subsidized “AI factories,” chasing artificial general intelligence instead of cheaper, more efficient investments in narrow AI.
Thanks to fiscal, monetary, tax, and regulatory favoritism, the result is free chatbot slop and an increasingly scarce, expensive supply of laptops, phones, and consumer hardware.
Subsidies break the market
For decades, consumer electronics stood as one of the greatest deflationary success stories in modern economics. Unlike health care or education — both heavily monopolized by government — the computer industry operated with relatively little distortion. From December 1997 to August 2015, the CPI for “personal computers and peripheral equipment” fell 96%. Over that same period, medical care, housing, and food costs rose between 80% and 200%.
That era is ending.
AI data centers are now crowding out consumer electronics. Major manufacturers such as Dell and Samsung are scaling back or discontinuing entire product lines because they can no longer secure components diverted to AI chip production.
Prices for phones and laptops are rising sharply. Jobs tied to consumer electronics — especially the remaining U.S.-based assembly operations — are being squeezed out in favor of data center hardware that benefits a narrow set of firms.
This is policy-driven distortion, not organic market evolution.
Through initiatives like Stargate and hundreds of billions in capital pushed toward data center expansion, the government has created incentives for companies to abandon consumer hardware in favor of AI infrastructure. The result is shortages that will hit consumers hard in the coming year.
Samsung, SK Hynix, and Micron are retooling factories to prioritize AI-grade silicon for data centers instead of personal devices. DRAM production is being routed almost entirely toward servers because it is far more profitable to leverage $40,000 AI chips than $500-$800 laptops. In the fourth quarter of 2025, contract prices for certain 16GB DDR5 chips rose nearly 300% as supply was diverted. Dell and Lenovo have already imposed 15%-30% price hikes on PCs, citing insatiable AI-sector demand.
The chip crunch
The situation is deteriorating quickly. DRAM inventory levels are down 80% year over year, with just three weeks of supply on hand — down from 9.5 weeks in July. SK Hynix expects shortages to persist through late 2027. Samsung has announced it is effectively out of inventory and has more than doubled DDR5 contract prices to roughly $19-$20 per unit. DDR5 is now standard across new consumer and commercial desktops and laptops, including Apple MacBooks.
Samsung has also signaled it may exit the SSD market altogether, deeming it insufficiently glamorous compared with subsidized data center investments. Nvidia has warned it may cut RTX 50 series production by up to 40%, a move that would drive up the cost of entry-level gaming systems.
Shrinkflation is next. Before the data center bubble, the market was approaching a baseline of 16GB of RAM and 1TB SSDs for entry-level laptops. As memory is diverted to enterprise customers, manufacturers will revert to 8GB systems with slower storage to keep prices under $999 — ironically rendering those machines incapable of running the very AI applications they’re working on. Real innovation sidelined
The damage extends beyond prices. Research and development in conventional computing are already suffering. Investment in efficient CPUs, affordable networking equipment, edge computing, and quantum-adjacent technologies has slowed as capital and talent are pulled into AI accelerators.
This is precisely backward. Narrow AI — focused on real-world tasks like logistics, agriculture, port management, and manufacturing — is where genuine productivity gains lie. China understands this and is investing accordingly. The United States is not. Instead, firms like Roomba, which experimented with practical autonomy, are collapsing — only to be acquired by the Chinese!
This is not a free market. Between tax incentives, regulatory favoritism, land-use carve-outs, capital subsidies, and artificially suppressed interest rates, the government has created an arms race for a data center bubble China itself is not pursuing. Each round of monetary easing inflates the same firms’ valuations, enabling further speculative investment divorced from consumer need.
Hype over utility
As Charles Hugh Smith recently noted, expanding credit boosts asset prices, which then serve as collateral for still more leverage — allowing capital-rich firms to outbid everyone else while hollowing out the broader economy.
The pattern is familiar. Consider the Ford plant in Glendale, Kentucky, where 1,600 workers were laid off after the collapse of government-favored electric vehicle investments. That facility is now being retooled to produce batteries for data centers. When one subsidy collapses, another replaces it.
We are trading convention for speculation. Conventional technology — reliable hardware, the internet, mobile computing — delivers proven, measurable utility. The current investment surge into artificial general intelligence is based on hypothetical future returns propped up by state power.
The good old laptop is becoming collateral damage in what may prove to be the largest government-induced tech bubble yet.
If AI is intelligent, why does it need so much electrical power to operate a giant search engine?
C’mon, man. Trust the science.
Remember The Information Economy? Looks like all those Information Jobs are going to AI.
I can understand the argument about underwriting AI, but when the lead sentences are unnecessary and harmful technology, then I don’t understand how someone with limited knowledge of the issue can state that with any degree of confidence.
Grift is a strong word to use, but it seems to fit.
The transmission grid is old and decrepit
At least the powers that be will construct an upgraded power grid (???)
Oh, and how much for all that needed silver and copper.....
Keep asking questions like that, and you’ll get in trouble with Hal.
It's not. There's nothing "intelligent" about AI. It's an aggregator (ergo the search engine), nothing more.
If it stores results from previous searches (topics, questions) it can respond faster - like caching previous searches on a computer.
At least that's my understanding of the animal.
Methinks we’ll see a move to a Google type computer - where the machine cannot work without being connected to the net.
Of course, that most certainly wouldn’t affect our ability to gather information, and our country’s greatest enemy (the DemocRAT party) wouldn’t use it to give us more MSNBCs, CNNs, Rachel Madcows, and associated other collections of ill-educated marshmallow majors. /s
A lion is dumb—but it is smart enough to eat you in the wild.
That is why you should be terrified of AI.
The second beast was permitted to give breath to the image of the first beast so that the image could speak and cause all who refused to worship it to be killed.
If those days had not been cut short, it would deceive even the elect.
>> C’mon, man. Trust the science.
Yeah! With recent history as our guide, what could go wrong??!? LOL
I’m wondering who is using AI and how are the suppliers of AI getting paid.
To serve man. You didn’t watch Twilight Zone?
>> It’s just a sign of the times . . .as in ENDTIMES.
A definite “maybe”... we don’t know the hour, but we are commanded to pay attention to the seasons.
I have enjoyed my career in the computer/EE/software/instrumentation industry. But I’m leaning hard towards hanging it all up in favor of off-grid sustenance ag. I have no King but Jesus, but “following King Ludd” has some attractive bennies, IMHO. :-)
FRegards & Blessings
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