Ep 341 - AI's Hidden Thirst with Erald Kolasi

Aug 16, 2025

Erald Kolasi, a physicist and economist known for his insights on energy, technology, and ecology, joins the show to explore the hidden challenges of AI growth. He reveals how large-scale AI consumes vast energy and water resources, exacerbating ecological crises. The conversation highlights the troubling trend of corporations prioritizing profit over public health, with inadequate regulatory enforcement. Kolasi discusses the impact of data centers on local infrastructures and advocates for strategic regulations to balance technological advancement with environmental sustainability.

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INSIGHT

AI’s Physical Infrastructure Revealed

Generative AI runs on huge hyperscale data centers that perform millions of GPU calculations for each user query.
This invisible infrastructure consumes vast energy and resources despite AI's dematerialized image.

INSIGHT

Data Centers Are A Major Electricity Load

U.S. data centers grew from 0.1% to about 4% of national electricity use since 2000.
In 2023 the U.S. data center demand equaled roughly four New York Cities of annual electricity.

ANECDOTE

Colossus Uses Millions Of Gallons Daily

Erald describes X.AI's Colossus in Tennessee using over a hundred thousand GPUs.
He estimates the facility consumes three to five million gallons of water per day for cooling.

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Our friend, physicist and economist Erald Kolasi, stops by the Macro N Cheese clubhouse to talk with Steve about the profound effects of AI on the energy grid, water resources, and societal infrastructure. The discussion focuses primarily on large-scale corporate AI, such as generative AI.

Erald’s work bridges physics, economics, and ecology, revealing how AI’s rapid expansion is not just a technological phenomenon but a biophysical crisis – one that’s easy to overlook. Cloud is such a gentle word. Diaphanous. It sounds harmless. Lovely, even.

“When you're in front of your computer and you're just typing away and you're asking these systems to do all these magical things for you, it can seem like it comes out of nowhere. But no, in reality, all of this stuff takes enormous energy.”

AI’s dematerialized facade obscures its physical infrastructure. It’s a classic capitalist contradiction where "progress" accelerates ecological breakdown.

Erald and Steve talk about the race to the bottom, as states and municipalities trade public health for tax revenue. Regulatory enforcement is absent.

While exploiting labor and plundering nature, the costs are socialized as these companies use public water and energy grids. Elon Musk’s xAI Colossus is based in Tennessee. (Remember the TVA, that impressive example of depression-era federal works? Help yourself, Elon.) It’s not just that they use public water and energy, it’s the vast and growing amounts of these resources, as Erald explains.

The conversation also touches on the AI arms race, as the US competes with China, using “national security” as an excuse to justify resource wars.

From energy consumption to water depletion, from labor displacement to geopolitical tensions, this episode exposes the contradictions of AI under a system that prioritizes profit over sustainability.

Erald Kolasi is a writer and researcher focusing on the nexus between energy, technology, economics, complex systems, and ecological dynamics. His book, The Physics of Capitalism, came out from Monthly Review Press in February 2025. He received his PhD in Physics from George Mason University in 2016. You can find out more about Erald and his work at his website, www.eraldkolasi.com.

Subscribe to his Substack: https://substack.com/@technodynamics