short seller James Chanos Criticizes the tech industry for pushing to develop orbital data centers and points out that space-based data centers will cost more.
In a post on social media platform X on Wednesday, Chanos cited a video of Tesla Inc. (NASDAQ: TSLA) and space exploration technology corp. CEO Elon MuskThe vision for putting data centers into orbit is as follows xAIMerged into SpaceX.
“It’s more of an AI snake oil coming from the Silicon Valley enabler class,” he said. Chanos added that annual power costs per megawatt for AI data centers hover around $600,000.
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Chanos said this figure represents approximately “5-7% of revenue from recently announced transactions.” “Emission, radiation, insurance and layoff costs will be higher,” he added.
This is more like an AI snake oil coming from Silicon Valley’s promoter class. Currently, annual power costs for AI data centers are around $600,000 per megawatt, accounting for only around 5-7% of revenue from recently announced deals. Emission, radiation, insurance and redundancy costs will be higher. https://t.co/F7P3IYSQ1t
He then made his case, saying grid power licensing was an issue but was being addressed. “There’s plenty of real power in the United States, especially when energy companies partner with private power producers,” he said.
(2) While grid power licensing is a current issue, the issue is being resolved rapidly in business-friendly jurisdictions. There is plenty of real power in the U.S., especially when energy companies partner with private power producers, as we’ve seen in many recent deals.
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Chanos also warned against being fooled by the hype surrounding orbital data centers, asking industry stakeholders to provide “actual cost numbers/savings” when talking about the benefits of AI computing in space.
(3) So before you believe the “data center in space” hype, ask your favorite Silicon Valley evangelist to show you some actual cost figures/savings.
investor Michael Barry, The man of “The Big Short” fame says nuclear energy could help close the gap between supply and demand for artificial intelligence data centersurging the President Donald Trump and vice president JD Vance Rapidly advance a $1 trillion nuclear power and grid expansion plan.
