Big Tech, AI and Silicon Valley: The Quiet Reckoning Nobody Wants to Talk About

The foundations for a Meta data center, which will eventually span an area about the size of Manhattan, are currently being laid somewhere in Louisiana. Alongside it, seven natural gas plants are being added. It is difficult to get rid of the image. The same company was purchasing solar farms and publishing glossy sustainability reports ten years ago. To keep up with the demand of its own models, it is now burning fossil fuels. It’s unclear exactly what the pivot is saying.

Silicon Valley doesn’t seem to be pretending anymore. The major companies, including Meta, Google, Microsoft, Amazon, and Nvidia, have determined that artificial intelligence is the wager, and nearly everything else is negotiable. Since 2020, Mark Zuckerberg’s metaverse division, Reality Labs, has reportedly lost about eighty billion dollars. The VR product from Horizon Worlds was being discreetly wound down, walked back, and then abandoned in a state of uncertainty. As you watch this develop, you get the impression that executives themselves are unsure of the precise boundary between strategy and panic.

It’s the kind of numbers that put an end to discussions. Jensen Huang of Nvidia projected that his company would generate $1 trillion in sales by 2028, which is equal to three percent of the US economy. Most investors appear to believe him. Over the previous ten years, the Magnificent Seven grew almost four times faster than the S&P 500. However, according to a Pew survey conducted earlier this year, 65% of Americans do not use AI at all in their jobs. Not even a chatbot. William Gibson, a novelist, once said that the future was already here, but it was distributed unevenly. Finding a better example than this is difficult.

It’s interesting how the industry itself is starting to show signs of weakness. Throughout the spring, layoffs at Amazon, Meta, and Microsoft have persisted, and the reasons behind them are becoming increasingly complex. Because AI would handle the work, fewer people would need to be employed. According to reports, Meta is now thinking about laying off up to 20% of its employees—not because AI took their jobs, but rather because the company needs the money to pay for AI. There is a distinction, and that distinction is important.

The energy story, on the other hand, has its own subtle absurdity. Compared to nuclear, grid upgrades, and waiting for community approval on a wind farm, gas plants can be established more quickly. Deals with Crusoe Energy in the Texas Panhandle, Chevron, Engine No. 1, Microsoft, and Google are ongoing. According to a consultant who spoke with Business Insider, renewables are currently viewed as “essential, but not sufficient.” There is a lot of effort put into that phrase. Tech companies used to market themselves as the world’s cleanest industry. They’re hedging now.

The culture has its own peculiar new artifacts inside the offices. According to reports, someone at Meta created a leaderboard called Claudeonomics that ranks staff members according to the quantity of AI tokens they use on a weekly basis. Prominent users receive titles such as “Token Legend.” Sequoia, Anthropic, Shopify, and OpenAI are all working on similar projects. Every week, some workers spend billions of tokens. Naturally, philosophers anticipated this: a token count reveals nothing about the significance of the work, and what is measured influences what is valued.

Similar concerns were raised by Amazon and Tesla years ago. Perhaps this will work out. Perhaps the public catches up, data centers are constructed, and models become more intelligent. Or perhaps in the future, some of these businesses will reflect and question when the wager became so big. The direction in which it breaks is still unknown. It’s evident that Silicon Valley and the rest of the world continue to diverge, and those at the top don’t seem to care all that much about it.