KQED's Forum AI Reshapes the Economy and Roils Geopolitics, Even as GPT-5 Fizzles
Aug 13, 2025
Brian Merchant, a tech journalist and author of "Blood in the Machine," Matt Honan, editor-in-chief at MIT Technology Review, and Zoë Schiffer, WIRED's business coverage lead, explore the colossal investments Big Tech is making in AI infrastructure, likening its impact to the railroad boom. They discuss AI's role in geopolitical tensions, like the controversial Nvidia deal with China. Meanwhile, the underwhelming launch of ChatGPT-5 raises questions about AI expectations and its societal implications, revealing a mix of excitement and disappointment surrounding its performance.
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AI Spending Is Rewiring CapEx Priorities
- AI model development is driving massive capital expenditures across Big Tech, reshaping the economy.
- Companies are racing to build data centers and compute capacity to serve billions of users.
GPUs Are Central To The Data Center Boom
- Large language models demand enormous compute, mostly GPUs, which drives where data centers get built.
- These facilities consume huge electricity and water to cool racks of chips doing training and inference.
AI Spend Can Move GDP Metrics
- AI CapEx has grown so large it materially affected recent GDP growth, rivaling consumer spending in a quarter.
- If sustained, that level of investment can resemble historic infrastructure booms like railroads or telecom.
