Ep 341 - AI's Hidden Thirst with Erald Kolasi

Aug 16, 2025

Erald Kolasi, a physicist and economist known for his insights on energy, technology, and ecology, joins the show to explore the hidden challenges of AI growth. He reveals how large-scale AI consumes vast energy and water resources, exacerbating ecological crises. The conversation highlights the troubling trend of corporations prioritizing profit over public health, with inadequate regulatory enforcement. Kolasi discusses the impact of data centers on local infrastructures and advocates for strategic regulations to balance technological advancement with environmental sustainability.

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INSIGHT

Grid Stress And Rising Bills

Data centers strain local grids and prompt brownouts as utilities pass upgrade costs to consumers.
Expansion often raises electricity bills and increases outage risk near dense data center clusters.

INSIGHT

Generators Create Public Health Hazards

Onsite backup generators emit carcinogens, NOx, particulate matter and methane, worsening local air quality.
Facilities placed in disadvantaged areas compound environmental injustice and health harms.

INSIGHT

Federal Policy Enables Local Burdens

The federal government largely greenlights AI expansion under national-security and competition rhetoric with China.
Localities instead bear the fights and are often bought by promised tax revenue.

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Our friend, physicist and economist Erald Kolasi, stops by the Macro N Cheese clubhouse to talk with Steve about the profound effects of AI on the energy grid, water resources, and societal infrastructure. The discussion focuses primarily on large-scale corporate AI, such as generative AI.

Erald’s work bridges physics, economics, and ecology, revealing how AI’s rapid expansion is not just a technological phenomenon but a biophysical crisis – one that’s easy to overlook. Cloud is such a gentle word. Diaphanous. It sounds harmless. Lovely, even.

“When you're in front of your computer and you're just typing away and you're asking these systems to do all these magical things for you, it can seem like it comes out of nowhere. But no, in reality, all of this stuff takes enormous energy.”

AI’s dematerialized facade obscures its physical infrastructure. It’s a classic capitalist contradiction where "progress" accelerates ecological breakdown.

Erald and Steve talk about the race to the bottom, as states and municipalities trade public health for tax revenue. Regulatory enforcement is absent.

While exploiting labor and plundering nature, the costs are socialized as these companies use public water and energy grids. Elon Musk’s xAI Colossus is based in Tennessee. (Remember the TVA, that impressive example of depression-era federal works? Help yourself, Elon.) It’s not just that they use public water and energy, it’s the vast and growing amounts of these resources, as Erald explains.

The conversation also touches on the AI arms race, as the US competes with China, using “national security” as an excuse to justify resource wars.

From energy consumption to water depletion, from labor displacement to geopolitical tensions, this episode exposes the contradictions of AI under a system that prioritizes profit over sustainability.

Erald Kolasi is a writer and researcher focusing on the nexus between energy, technology, economics, complex systems, and ecological dynamics. His book, The Physics of Capitalism, came out from Monthly Review Press in February 2025. He received his PhD in Physics from George Mason University in 2016. You can find out more about Erald and his work at his website, www.eraldkolasi.com.

Subscribe to his Substack: https://substack.com/@technodynamics