E106: You Made Google Buy an Energy Company – The Hidden AI Energy Tax
The AI Cookbook: AI Tools | Enterprise AI | Leadership · Malcolm Werchota
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Show Notes
Google, Microsoft, Amazon, and Meta are no longer just tech companies.
They are turning into energy operators.
Why? Because the public power grid can’t keep up with AI.
In this episode, Malcolm breaks down why Google bought Intersect Power, why connecting a new data center now takes 5–10 years, and why Big Tech is bypassing governments by building private energy infrastructure.
This isn’t abstract.
It shows up on your electricity bill.
THE AI ENERGY TAX
- Data centers trigger 300% electricity price increases in some regions
- Costs are socialized across households and businesses
- Even people who never use AI are paying for it
- AI energy demand is growing 10–15% per year, while most industries are flat
AI isn’t just a software revolution.
It’s an energy shock.
WHY DATA CENTERS ARE DIFFERENT
Unlike aluminum or steel plants, data centers:
- must be built near cities (low latency, fiber hubs)
- cannot wait years for grid expansion
- switch to backup power instantly — destabilizing grids
A single grid event in Northern Virginia caused 60 data centers to drop offline simultaneously, removing 1.5 GW of load in milliseconds — nearly the demand of an entire city.
Power grids were never designed for this.
THE SPLIT: TWO ENERGY SYSTEMS
We are seeing a bifurcation of the grid:
1. Public Grid
- congested, regulated, slow
- households, hospitals, schools
- rising prices
2. Tech Grid
- private, fast, capital-intensive
- solar, batteries, gas, nuclear
- data centers co-located with power plants
Big Tech is building the gated communities of energy.
EUROPE IS NOT IMMUNE
- Ireland: data centers use 22% of national electricity
- Dublin: ~80% of city capacity
- Germany & Netherlands: moratoria, 7–10 year wait times
- Microsoft & others building their own power plants
- Nuclear is back — not as ideology, but necessity
The cloud is no longer abstract.
It’s concrete, steel, cooling systems, and power lines.
WHAT THIS MEANS FOR BUSINESS LEADERS
- Expect higher cloud costs (energy is passed through)
- Budget for volatility in AWS, Azure, Google Cloud
- Watch for data center construction near your location
- Consider geographic diversification of workloads
The uncomfortable truth:
More AI = more energy. Period.
TOP 3 TAKEAWAYS
- You are already paying the AI energy tax
- We are entering a second, AI-driven energy industrial revolution
- Big Tech is becoming Big Energy, building parallel infrastructure
Short-term: painful.
Long-term: possibly the biggest accelerator of carbon-free energy ever.
LINKS & CONTACT
Website: https://www.werchota.ai
LinkedIn: https://www.linkedin.com/in/malcolmwerchota
Podcast: [email protected]
SEO TAGS
Google energy, AI energy consumption, AI energy tax, data center electricity, cloud energy costs