Chamath Palihapitiya warns data center revolt could dent US GDP

Investor Chamath Palihapitiya issued a warning in an X post on Thursday. He argued that the political finger-pointing surrounding the construction of AI data centers could lead to the loss of 200 to 300 basis points of annual US GDP if the fighting continues. 

Chamath pointed to backlash from states like Texas, Ohio, and Pennsylvania as early signs of a situation that could spread across the United States.

What did Chamath call a powder keg? 

Palihapitiya is a Silicon Valley venture capitalist and has painted the state-level fights over AI data centers as a national economic risk. In an August 20 post on X, he wrote, “This is a powder keg,” and the matter could derail the American economy if it metastasizes. 

He blamed the AI industry for “doing the basics” and went on to list a few things the sector has got wrong when it came to AI data centers. His comments come amid a slew of posts about the issue of an increase in electricity rates due to the emergence of AI data centers.  

In a back-and-forth on August 19, he stated that building expensive reactors and moving large users off the grid will spike everyone else’s electricity rates. “This is now how electricity prices work,” he wrote. 

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