Data centers have hiked electricity prices on the public by $23B

It's funny that you don't realize you are doing the same thing; you are giving the absolute change like the article is doing; you are just doing the change in the rate instead of the underlying quantity. A 4% change in my rate if the original rate is 4% would be a 100% rate rate change, which of course is substantial.

So the rate goes from say 4% to 4.16%? That's still unimpressive.

If you mean from 4% to 8%, then that's actually raising by 100%

There are a few things going on at the same time that mean that electricity cost might actually go down.

The reasons for that are complex but have to do with how electricity pricing works. In many markets the price includes a lot of taxes, fixed cost for providers and infrastructure. Generation is only a minor cost. And on top of that the prices are set in a way that isn't really that flexible.

Infrastructure utilization is a very important here. Grid operators are very conservative with their infrastructure. They want to ensure there's enough to handle the worst case. That means there are a lot of assets that are nowhere near 100% utilized (e.g. cables and long distance transmission). It also means they are very inflexible serving new demand like data centers.

Adding batteries as energy buffers enables a lot better utilization of all these assets. That enables more revenue for the same infrastructure cost. Electricity prices can actually go down if you do that right. With renewables, there is very low marginal cost for generation. It's all infrastructure cost. Anything that improves infrastructure utilization enables more customers to have power that then share the infrastructure cost.

Data centers that are currently powered by things like on site gas turbines are not being very cost efficient. There's an obvious incentive for hyper scalers to invest in infrastructure that will lower their cost. They have access to many billions. They are spending on anything that will get them energy. They are desperate to spend. And they are completely bottle necked on grid operators that are being very conservative. Hence the expensive side hustle with gas turbines. There's a big opportunity here for massive investment in better grid infrastructure. That wouldn't necessarily be payed for by consumers. But they would still benefit from better infrastructure.

The key is unlocking these investments to happen.

Because xAI does? I wasn't making a hypothetical.

Consumers pay for everything -- increased RAM, SSD, CPU, GPU prices, either directly (for DIY) or indirectly (apple/android phones). We pay dramatically increased prices for every device. We pay more because servers (non AI) cost a lot more now, which means cloud (or your own DC) bills increases for all companies and they are all going to raise prices.

Electricity will cost more because AI DCs need to be cheap, all upgrades cost will be borne by consumers.

Water will be less available and/or cost more because all forms of energy (except solar, wind, hydro) need a TON of water[1]. Which was ~48 trillion gallons in 2021.

As a consequence, nearly everything will cost a lot more. And this is the price we pay for AI. AI has hijacked the supply chains built for existing uses, taken over all the low cost ones. Forcing the rest of humanity to bear the costs of building everything new at a high cost, both high CapEx/OpEx.

These externalities must be accounted for when thinking about how 'cheap' AI is.

--- [1]From: https://www.eia.gov/todayinenergy/detail.php?id=56820

U.S. electric power sector water withdrawals for power plant cooling: 47.7 trillion gallons of water.

The electric power sector uses a large amount of water, mostly for cooling. Thermoelectric power plants (including natural gas, nuclear, and coal plants) boil water to create steam, which spins a turbine to generate electricity. The steam leaving the turbine must be cooled back into water to be used to generate more electricity. Plants withdraw water from nearby rivers, lakes, or oceans and pass that water through the steam leaving the turbine. That process cools and condenses the steam back into water. In 2021, 73% of the utility-scale electricity generated in the United States came from thermoelectric power plants.