Maybe it has happened to you. You get a sales or service call and quickly realize the person on the other end is not a human being at all but a creation of artificial intelligence (AI). Does that bother you? Does it lower or raise your opinion of the company using that technology? AI is certainly permeating our economy/our industry and in many cases adding efficiencies. But what is the real cost?
First, the human toll. While AI eliminates roughly 25,000 jobs per month, roughly 9,000 are added back, says Goldman Sachs. AI acts as a net drag on the U.S. labor market of roughly 16,000 jobs per month.
Researchers at Tuft’s Fletcher School of Global Affairs recently released the American AI Jobs Risk Index. According to the Index, approximately 9.3 million U.S. jobs are at risk of displacement in the next two to five years, with a plausible range of 2.7 to 19.5 million depending on alternative adoption scenarios. Associated household income at risk spans $200 billion to $1.5 trillion annually—equivalent to the economies of Belgium and, under faster AI adoption, approaching that of South Korea.
A Huge Increase in Power Demand
Data centers to power AI are springing up around the country. Data centers do not just power AI; they are the physical facilities that make AI possible. They house thousands of specialized chips—like Graphics Processing Units (GPUs)—that process the massive amounts of data required to train and run AI models.
The luxury of AI comes with a huge environmental cost. According to the Environmental Integrity Project, a nonpartisan research organization, nationwide, at least 82 gas-burning power plants are being built or have been proposed to power data centers. Most were announced or granted permits within the past 18 months. If built as planned, the gas burning plants—scattered across states including Texas, Ohio and Wyoming—could release as much planet-warming pollution in a year as roughly half of all the passenger vehicles in the United States.
AI needs intense parallel processing, using advanced chips that draw far more electricity than standard computer servers. Running these high-density chips creates massive heat, requiring large-scale liquid or air-cooling systems that also use substantial energy. AI data centers demand so much electricity that they are straining local power grids. That means higher energy costs.
A standard medium facility uses roughly 100 million gallons annually, while massive AI clusters can rival the daily water consumption of a town of 10,000 to 50,000 people. Up to 80 to 90 percent of this direct cooling water is drawn from valuable municipal potable supplies or local groundwater aquifers rather than reclaimed wastewater. Yes, that means higher water and sewer costs.
Most in Rural Areas, the South
Sixty-seven percent of planned data centers are in rural areas. Thirty-nine percent of planned data centers are in counties that currently do not have any. Most of the planned construction of U.S. data centers will happen in the South and Midwest. Three-quarters of all planned data centers will be built in these two regions, with the South alone accounting for nearly half of them (48 percent).
You may be familiar with NIMBY (not in my backyard). A Gallup survey reports that 71 percent of Americans oppose building artificial intelligence data centers in their local areas, with nearly half strongly opposed. This local resistance has successfully blocked or delayed dozens of major infrastructure projects nationwide.
Certainly, AI needs to be factored into your company’s CSR strategy and reporting. I looked at one major hotel company’s most recent sustainability report and there was just one mention of AI, and it was a favorable mention.
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