Sacks estimates each gigawatt data center requires roughly 50 billion dollars of investment in chips, land, and power.
“Here's a rule of thumb is that each gigawatt data center is about $50,000,000,000 of investment, roughly. Between the chips, the land power shell, it's about 50,000,000,000 per gigawatt.”
“And here Bernie is acknowledging that this is not about states' rights because he's saying that there needs to be a moratorium on new data centers even if the states want them.”
Sacks predicts Anthropic may regret supporting data center nimbyism now that they need to build their own.
“But now that they're, I think, gonna have to move into the game of building their own data centers, they might regret salting the earth for data centers all over the country.”
Sacks says hyperscalers pledged not to raise residential electricity prices in exchange for easier permitting to build own power generation.
“But in exchange for that, the quid pro quo is we'd make it easier to do permitting and make it easier for them to basically stand up their own power generation.”
Sacks says Trump proposed letting AI companies build their own power generation behind the meter over a year ago.
“And I think a really good example of that was his idea around data centers where he said over a year ago, before data centers even became a hot political topic, that we should let our AI companies stand up their own power generation behind the meter.”
Sacks states US will face energy deficit equivalent to 2.5 Californias by 2050.
“By 2050, The United States Of America will be two and a half California's worth of energy in deficit. 2.5 California's, the fourth largest economy in the world.”
Sacks explains SpaceX's path to $100B ARR requires two gigawatts at $50 per watt.
“A gigawatt is a billion watts, so 30 to $50 per watt means 30 to 50,000,000,000 per gigawatt. And I think they're at the high end of that range right now.”
Sacks argues political opposition to data centers ironically prevents compute oversupply and market crash.
“In a weird way, all the political headwinds, I think, insure against that outcome. Because it is so hard to build data centers for all the reason we said.”
Sacks argues that political opposition to data center construction paradoxically prevents GPU oversupply by constraining build-out against exponentially growing demand.
“So, if all of a sudden, there are too many people racing to supply this compute and now there's an oversupply, and the market crashes, that's be the risk factor. In a weird way, all of the political headwinds ensure against that outcome. Because it is so hard to build data centers for all the reasons we said. There is a whole moral panic slash hysteria slash hoax going on, that actually, it's those political headwinds I think will almost guarantee that there is not an oversupply relative to the exponentially growing demand. So in a weird way, you're protected against that.”
Sacks suggests that political obstacles to building data centers paradoxically prevent infrastructure overbuilding.
“in a weird way all the political headwinds I think insure against that outcome, because it is so hard to build data centers,”
Sacks claims that Anthropic CEO Dario Amodei's public statements have significantly aided efforts to ban AI data centers in the United States.
“Dario’s messaging has been massively helpful to efforts to ban data centers here in America.”
Sacks argues Trump's requirement that AI companies build their own power generation prevents residential price increases and can lower prices
“President Trump was ahead of the curve requiring AI companies to build their own power generation so new data centers don’t raise electricity prices for residential ratepayers. Done right, data centers actually lower prices by producing excess power and funding grid upgrades.”
Sacks challenges Dario to speak out against over-regulation of data centers if he believes his own argument.
“And probably it would be a good thing if Dario really does believe in the data centers full of geniuses idea that he was arguing for last year, He should come forward and say, we're making a big mistake by over regulating data centers. Here's how we should do it.”
Sacks says restricting allies from data centers means the US is shooting itself in the foot.
“So I guess our allies aren't gonna have the data centers either. So we are totally shooting ourselves in the foot.”
Sacks notes Dario's argument for AI advantage over China contradicts current data center bans.
“And if we have thousands or millions of those and China has only dozens or a 100, whatever, then we're going to win everything. And that was the whole argument.”
Sacks argues current policies ban the very data centers Dario advocated for and restrict chip sales to allies.
“But now we're basically banning the data centers. We're not gonna have those data centers full of geniuses. And he's done his best to restrict sale of chips to our allies as well.”
Sacks says Dario argued for US data centers to create thousands of Nobel Prize-level AI scientist agents.
“Dario actually made this argument in the context of trying to ban export of chips.”
Sacks says chip export restrictions to allies also prevent their data center development.
“We're not gonna have those data centers full of geniuses. And he's done his best to restrict sale of chips to our allies as well.”