Let me be perfectly clear from the start, I love technology. I believe in its power to solve big problems and make our lives better. I’ve been a tech nerd since I was a kid, since Commodore to Apple IIe days.
But true support doesn’t mean blindly cheering from the sidelines. It means asking hard questions, especially when the hype train is roaring ahead without any thought for the tracks it’s laying down, or who might get run over.
My loyalty isn’t to the tech giants, the investment firms, or the CEOs promising a shiny AI future. It’s to you and me, the everyday person who feels things getting more expensive and wonders why. It’s to the broader society that has to live with the consequences of these grand experiments.
I want to talk about those consequences: the hidden cost of the AI revolution that’s already making your life more expensive. Things that conference speakers, TV talking heads, and LinkedIn influenzas, I mean, influencers, love to babble about just to get their names connected to anything “AI”.
The Silent AI Tax: Why Your Bills Are Going Up
Have you felt that slow, steady squeeze on your wallet lately?
Your Netflix and Spotify subscriptions are now noticeable charges on your card statement. The software you use for your side hustle just raised its monthly fee (ahem, Adobe!). Your grocery bill keeps climbing while shrinking is size, and have you noticed your electricity bill? OMG!
We’re told it’s just inflation, a complicated economic force we can’t control. But what if that’s not the whole story? What if a specific, modern kind of cost is being quietly woven into the price of everything you buy since 2021?
I call it the AI Tax. This isn’t a government levy. It’s a hidden surcharge, a result of the artificial intelligence boom that’s happening all around us. The CEOs and investors you see on the news are pouring unimaginable sums of money into this race. But all that money, all those resources, have to come from somewhere. Ultimately, they come from us. This isn’t science fiction. It’s happening in the real world, using real resources that cost real money, and you are already paying for it.
Think of it like a digital gold rush. Everyone with billions to spare is scrambling to find the next big AI thing. Companies like Microsoft, Google, and Meta are spending money like water. We’re talking hundreds of billions of dollars on super-powered computer chips, gigantic warehouses full of servers, and small armies of the smartest engineers.
This isn’t just happening in the cloud. It has a massive physical footprint on our world. And this spending creates a tidal wave that crashes into our everyday economy, washing up on the shore of your kitchen table.
Disclaimer, as an investor of many data centre REITs (real estate investment trusts), I’m part of the problem, I have to admit that, but going back to my point…
Your Wallet: The First Casualty
This frantic rush for AI creates immediate and serious shortages. The most advanced computer chips, the brains of this operation, are now as sought-after as rare diamonds. There simply aren’t enough to go around, so their price goes through the roof. Then come the data centers. These enormous buildings, packed with computers, guzzle absolutely staggering amounts of electricity and water to stay cool. One single data center can use as much power as a medium-sized American city or an entire developing country. Can you imagine the strain that puts on our power grids?
Who do you think ends up paying for all that extra demand? We all do. Utility companies, facing this huge new drain on their resources, have to generate more power and upgrade their equipment. Those multi-billion-dollar costs don’t just disappear. They get passed directly on to consumers in the form of higher electricity rates. This isn’t a guess about the future. It is a documented reality happening right now, all across the country.
But the AI Tax doesn’t stop at your power bill. This is just the beginning of the ripple effect.
The Trickle-Down Effect of Tech
Here’s the second part of the squeeze. Those tech giants have shareholders. They need to show a return on their colossal investments. How do they do that? They raise prices on their services. The cost of cloud storage, web hosting, and all the behind-the-scenes software that nearly every business relies on goes up.
Now, take a moment to think about that. It’s not just tech companies using these tools. It’s your local bakery that uses a cloud-based system for its payroll and inventory. It’s the auto repair shop that relies on software to order parts. It’s the movie studio that uses digital rendering farms for special effects. It’s the farmer using GPS and data analytics to plant crops. When their costs for these essential digital tools go up, they have no choice. To stay in business, they must raise the prices of their bread, their repair services, their movie tickets, and their food.
I run a micro DTC business and my Shopify and other integrated solutions, alongside logistics, last mile, and advertising spend goes up disproportionately to the price hike my products can support before customers stop buying.
The cost of the AI gold rush gets passed down the line, from the trillion-dollar company to the small business owner, until it finally lands in your lap. It’s a hidden tax on the entire economy, and you settle the bill every time you swipe your card at the register.
Economists like David Smerdon have pointed out the dangerous flip side of this spending spree. All that money flowing into AI isn’t free. It’s capital that gets pulled away from other critical parts of our economy. It crowds out investments that could build new hospitals, repair our bridges, fund new clean energy projects, or support small business innovation.
We are betting everything on a speculative technology that might make things efficient someday in the future, while it is actively making everything more expensive right now. Right now, all we’re seeing are AI slops of useless, cringe-worthy pictures and videos, most often used for scams and social media trash. At best, we see GenAI used to displace jobs that provide livelihood and experience to those who need it the most, the entry-level and lower skilled jobs that provide experience for the youth and productivity to the aged, respectively.
Does that feel like a smart bet to you?
A Bubble Waiting to Burst
For those who remember the late 1990s, this might feel eerily familiar. That was the era of the dot-com bubble. Back then, simply adding “.com” to your company name could cause its stock price to magically double. Today, the magic word is “AI.” Company announcements are filled with promises of AI integration, and Wall Street rewards them with soaring valuations, often with little proof of any real profit.
No joke, I have dishwasher detergents with “AI” plastered on its packaging!
But this new bubble might be even more dangerous. The dot-com frenzy was largely fueled by venture capitalists and eager individual investors. Today’s AI mania is being driven by the colossal balance sheets of the biggest companies on Earth. This concentration of risk is terrifying. If the promised revolution and profits from AI don’t appear as quickly as investors hope, the resulting crash won’t just hurt Silicon Valley. It could wipe out trillions in market value, devastating the retirement funds and pensions of millions of ordinary people. The entire system is looking a little wobbly because it’s leaning so heavily on the success of just a few AI-focused stocks.
The Dunning-Kruger phenomenon coming out of the mouths of executives, middle management, and news outlets is insane. The term AI is as cringe as “information superhighway” was 25-30Y ago.
And what are we sacrificing for this gamble? We’re losing our people. Our most brilliant minds, the engineers and scientists who could be tackling society’s greatest challenges, are being lured into the AI rush.
Instead of working on cures for cancer, designing resilient infrastructure, or solving climate change, they are using their talents to build better targeted advertising or fine-tuning chatbots. This “brain drain” away from tangible, meaningful work and into speculative technology has a real and profound cost for our society’s future. Are we getting enough in return to justify what we’re giving up?
The Human Cost We’re Not Talking About
We spend so much time worrying about whether a robot will take our jobs that we’re missing the bigger, more immediate picture. AI is already making our lives more expensive. It is actively widening the gap between a tiny group of “AI Haves”, the companies and investors at the top, and the vast majority of “Have-Nots” the rest of us who just pay the tax or trying to grasp onto the tail of moving dragon.
The only benefits we’ll get is the excrement left after the dragon consumes everything.
Our society is completely unprepared for this. We have no real rules, no guardrails, and no plan to manage this economic distortion or its drain on our shared physical resources like water and power. We are charging headfirst into a future that is being designed for profit, not for people. We are building a powerful new world without a blueprint, without a safety net, and without your consent.
So, what can we do? Throwing rocks at the data centers isn’t the answer. The goal isn’t to reject progress or become modern Luddites. The goal is to demand realism, accountability, and honesty.
We need to start asking much harder questions. We need to push our local lawmakers and utility commissions to be transparent about the true costs of these data centers on our community resources. We need to support journalists and researchers who are investigating these hidden economic flows.
As consumers and citizens, we have power. We can choose to be skeptical of every new “AI-powered” product that comes with a price increase.
We can ask companies if this feature is truly solving a problem or if it’s just a fancy excuse to charge us more. The most intelligent choice we can make right now might be to see through the hype and focus on what truly matters: affordable utilities, stable communities, and an economy that works for everyone, not just the tech giants.
The most advanced artificial intelligence in the world is utterly worthless if ordinary people can no longer afford to live in the world it’s creating.
What do you think? Is the promise of a high-tech future worth the very real financial pain it’s causing families today? Are you willing to pay the AI Tax? Or are we doomed to just accept and contribute to our economic and social demise coz we have bills to pay?
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