AI Hyperscaling Concerns

Major technology firms are investing billions of dollars in new data center facilities, power supplies, and computing resources. 

Industry insiders, however, are divided over whether artificial intelligence is worth the cost.

The five biggest cloud and AI infrastructure providers in the United States—Alphabet, Amazon, Meta, Microsoft, and Oracle—have committed to spending almost $700 billion combined on AI capital expenditures this year, Futurum reports.

AI’s computational resources, or “compute,” are a primary driver of the technology’s growing resource footprint. 

This includes things such as memory, processing power, and specialized hardware. Many AI models run on cloud computing, most of which is provided by one of three tech giants: Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

According to Usage AI, those three companies alone represent around 68 percent of total global cloud compute spending, giving rise to the term “hyperscalers.”

Hyperscale facilities come with significantly higher resource demands, and there are an estimated 670 of these facilities planned in 2026, iRecruit.co reports.

A growing number of Americans are using AI every day, with nearly half using some kind of AI chatbot regularly. 

Roughly one in four U.S. adults use these tools on a daily basis, according to a 2026 Pew Research Center study. The technology’s footprint has prompted some insiders working on the front lines to pause and consider the true cost of its rapid development.

Numbers vary, but there are currently more than 3,000 operational data centers in the United States, with roughly 1,500 more either planned or under construction, according to research by Consumer Reports.

Water and power demands are accelerating alongside AI’s growing footprint. 

Electricity price spikes between 2025 and 2026 have been observed in multiple states amidst the rush to build more data centers to support AI, the U.S. Energy Information Administration found. 

These facilities account for roughly 55 percent of U.S. electricity demand growth, according to Grid Strategies research.

“The honest answer the industry doesn’t want to say out loud is that current grid and water infrastructure in most markets was not designed for this trajectory,” Elvin Aghammadzada, an AI architect at NVIDIA, told The Epoch Times.

Brent Fisher, co-founder of AI security firm Cognetryx, believes these resource demands are a reason to pause and consider a different approach.

Fisher said most enterprise AI doesn’t need to run in a resource-stressed regional facility, such as in the Nevada desert. Adjustments to this could make AI more viable in terms of consumption.

“Short-term, there’s no clean fix,“ he said. ”Data centers already in the pipeline will get built outside of a few areas where legislation from municipal authority can be easily overturned by popular acclaim, and power contracts already signed will get used.

“What the industry can actually do right now is stop treating hyperscale cloud [compute] as the default deployment model for every AI workload.”

A company using AI for internal document search, compliance monitoring, or operations support can run that workload on hardware they already own or lease, within a data center footprint they’re already paying for.

“It’s just a different architectural decision that almost nobody is pushing, or educating, enterprises to make,” Fisher said.

Michaela Brady, international AI policy adviser for the UK’s Department for Science, Innovation, and Technology, told The Epoch Times: “There is no feasible way we can meet the resource demand the top AI companies are proposing and still keep our communities alive. In hindsight, AI tools should have been deployed only in the sectors that truly needed it, such as medicine, diagnostics, engineering, and manufacturing.”

Brady said the idea of a gradual, structured AI rollout was abandoned early on.

“Instead, the models were released for general-purpose use to generate profit for both the companies that develop the models and those that adopt it,” she said.

Brady also challenged the validity of the metrics used to measure how much of the population is using AI by choice versus by default.

“AI’s utility is being fluffed up to justify its progression,” she said. “The demand itself is inflated, as tools like Google’s Gemini or Microsoft’s Copilot are now generating responses and summaries without user consent, and make it nearly impossible to opt out.”

She gave an example from her experience working with the UK government.

“We fully adopted Copilot this past year, and there was no option to turn off the document summary function on Word, even if a civil servant didn’t want it,” Brady said. “IT teams never responded to our queries about how to opt out.”

Meanwhile, industry groups and infrastructure say these concerns must be weighed against the economic and societal benefits AI infrastructure has already delivered.

—Autumn Spredemann; Stacy Robinson

BOOKMARKS

The U.S. military campaign against Iran has cost approximately $37.5 billion so far, Secretary of War Pete Hegseth said during a Senate hearing on July 21. He appeared before Congress to ask for more cash to head off “critical shortfalls that threaten our ability to also simply pay our service members, rapidly replenish equipment and munitions, and sustain vital operations without disruption.”

The French Parliament approved a bill on Tuesday barring children under 15 from social media.  The ban covers new accounts from Sept. 1, while platforms have until Jan. 1, 2027, to close accounts already held by under-15s.

A judge has blocked the federal government’s attempt to strip work permits from immigrants who were granted temporary permission to live in the United States. Check out Zachary Stieber’s latest report for details on the ruling. 

The House of Representatives on Tuesday advanced a legislative package including a budget reconciliation bill, defense spending, and legislation to ban members of Congress and their immediate family from stock market trading. A contingent of conservative lawmakers had threatened to tank the bill on the House floor by withholding their votes for several minutes.

President Donald Trump said on July 21 he would allow U.S. airline companies to resume direct flights to Lebanon decades after the United States suspended the route. He added in a Truth Social post that “hopefully, other countries will do the same.”

—Stacy Robinson