👀 The AI backlash is the only thing growing faster than AI revenues
Humans are angry
Anthropic will turn a profit this quarter, two years ahead of schedule. This is off the back of extraordinary revenue growth. In the second quarter this year, the company is likely to gross $10.9bn in revenue, more than its entire lifetime revenue to date. Operating profits should weigh in at $559 million. It’s an extraordinary achievement and one set to feature in the annals of business history.
But the backlash against AI is growing ever stronger.
Earlier this week, Google’s former boss, Eric Schmidt, was soldily booed at a college commencement address
At another college commencement, boos shocked the commencement speaker who proselytized AI. Joanna Stern interviewed one of the college students, Houda Eletr:
Joanna: Do you use AI?
Houda: Throw it away….if you create this big thing that is supposedly going to save a human’s life, then you should give it to me in a human way.
A reader from New York sent me this photo:
There will be more booing.
Consider data centers and their local impacts.
At a hearing, American politician Alexandria Ocasio-Cortez showed a jar of mud-brown water collected from a tap in Georgia, shortly after Meta started building a data center.
Poor ambassadors
The narrative around AI has been about promises for tomorrow, but sacrifices today. AI leaders have warned that the world could be destroyed by this technology.
They warned that large numbers of people, particularly graduates, would lose their jobs. But everyone knows the founders are making more money than Croesus. And now, there is construction, a physical manifestation, a real inconvenience, something you can point at.
And for what? So we can explore the stars using intelligent spaceships and ‘colonize the galaxy’ according to Demis Hassabis. (Demis is by far the most sympathetic of all the AI leaders, but even his messages feel out of touch.)
Engaging with this resistance won’t be effective if AI leaders throw distant fantasies at people dealing with muddy water coming from their kitchen tap today.
Neither will facts. The US energy system is getting a much-needed boost in investment to upgrade energy generation and the grid to more modern technologies. I am certain that in a decade we’ll look back on this as the time when the US grid prepared for the 21st century, becoming more resilient, efficient and greener. But that well-informed argument is completely irrelevant in the face of today’s resistance.
Fantasies or facts, these are all fodder for the technorat. Globalization or NAFTA made a graph on some economists’ slide deck go up. Grid renewal and ‘productivity’ excited the same neurons, but don’t speak to the heart.
And the AI industry has a real problem because the resistance rests on tangible issues today. Just a few years ago, the sense of unease many people had about AI was fissiparous and intangible (remember the asinine PauseAI movement?).
Wage devaulation for freelancers and gig workers is here and now. Data center construction, the threat of rising power bills and dirty water, here and now.
Pressure on graduate employment, whether driven by AI or not, will increase. I’ve spoken to several senior execs at US firms in finance and consumer services in the past few weeks. Their AI projects emphasise headcount reductions or, euphemistically, productivity. While these don’t show up in aggregate statistics yet, the perception that they do is what counts.
The AI companies, in their San Francisco bubble, pursue increasingly abstract technical milestones. Each new release beats a benchmark but comes with another warning of the lasting harm the model will do to what it means to be human. No wonder American voters find AI less appealing than ICE, the frequently masked paramilitary agency that enforces immigration law.
Data centers have become the first issue in decades to unite both sides of American politics. Resistance has become a truly bipartisan issue. Washington can’t be relied upon to settle things. The federal government has chosen to delay, often theatrically. The White House wants a light-touch national framework and has pushed agencies to challenge state rules, but even its own recent AI executive-order has been derailed.
The states are moving instead. From Colorado to New York, California to Texas, and a thousand more state-level bills around AI have been introduced.
Local politicians will discover that an anti-datacentre vote is a cheap way to electoral success. The midterms this October will be one to watch. But nothing meaningful will happen in Congress until at least after the 2028 election.
This will not stop AI. It will not stop the construction of data centres, but it will be boon time for lawyers as they first challenge the legislation and then work out how to comply with it.
Meanwhile, companies and consumers will continue to spend on AI. The technology will improve. American firms will report successful large-scale AI deployments. Revenues will rise, records will be broken.
And the crescendo of boos will rise and rise and rise.
I think the biggest issue is that Ai is turning into a spiritual debate. Either you are for it or against it. There is no in-between. We know from politics this is nothing new.
I can see it myself. There are tremendous use cases for AI and it helps me a lot with my work (and life). But I can feel how I grow more and more resentful of AI.
If we don't enable the current system to adopt AI in a healthy way, I think it will do more harm than good. The same thing is happening with social media. Substack is a step in the right direction but the system doesn't enable it. As we can already see it's turning into just another social media platform.
I'm an optimist by nature. I think it's a great opportunity for humanity to overcome our challenges.
I love it Azeem! Did you just invent the technorat? Appropriately enough I couldn’t find it on Google AI! The perfect noun of the year. In one go - especially in the context of your content!