Call me whatever names you wish, this one is going to get very, very bad.
It will hit all of us -- every single one. It will force realignment of multiple industries and firms, along with local and state governments. Those who have structured around it to try to claim some sort of "prize" from it, such as tax revenues, will find themselves presiding over rotting hulks much like when the huge malls all got eviscerated due to multiple factors all converging at once: Online shopping, "youths" who simply cannot keep their hands to themselves nor control their urge to steal, police who refuse to arrest and prosecute and more.
The AI mess is much worse. Many municipalities have been "stoked" with the idea of tax revenues from these installations, and even the President has bought into their load of crap. Most people are unaware of how property tax works on businesses; most states and counties tax personal property held by a business (Florida does, for example) on an annual basis much like a homeowner pays property taxes on their house. The temptation to get cute with this when someone wants to put $10 billion worth of GPUs in your town is large, quite-obviously, even though there are basically no jobs created on a permanent basis. Oh sure, there are a lot of jobs while construction is going on but once construction is done there are only a few dozen people -- if that -- remaining on-site. Then there's the power, water and, for many of these depending on the designs, noise consideration.
As I've pointed out I have no quarrel with data centers provided they are not cost-shifted onto everyone else -- which every developer of any project tries to do. That's not specific to data centers, but the scale is much worse here than anywhere else, which is why it matters in this instance.......
.....The corrective force comes when the alleged productivity improvement promises fails to materialize; the cost doubling or five times multiple arrives as everyone can see but productivity either goes nowhere or worse, goes in the tank.
When you have a firm like NVidia which has a run rate of $250 billion of revenue per year and it puts $100 billion of off-balance sheet debt guarantees on itself in one quarter, an amount across a year that exceeds the entire revenue of the firm you have entered into the realm of promising that said firms who are the beneficiaries of said guarantees "will perform as expected." If and when they can't the house of cards comes down -- not necessarily meaning NVidia goes bankrupt (after all they do have a very nice graphics card line) but rather all those companies who took out such debt cannot pay, they get liquidated, the value of all that equipment goes to near-zero instantly and the market prices of said firms collapse.
From this will come opportunity in that being able to buy things at 10 cents on the dollar is quite lucrative if you can use them productivity. I ought to know -- I did it several times and it worked out really well. But never was I out over my skis in that there was no debt that required service and deploying said things thus dropped straight to the bottom line as a lower cost of sales.
So yes, there will be joy on the horizon on the other side of all of this -- but the smiles will be on the faces of those walking on the ruins of that which first collapses, and the indications of that, and that it will come (and unfortunately is going to get a bunch of state and municipal governments too, not just private industry) is a certainty.
Trump will be known as Hoover -- or Carter -- within a few years and so will Vance if he doesn't distance himself from this bleating about rates while the government runs a 6% deficit which pegs the actual neutral rate at about 7%. I'm certain of it because right now all players are actively inflating a bubble that has already reached unprecedented levels of insanity on valuation from which there is no possibility of growth into it down the road. The continued refusal to put a stop to the excess demand thus crazy escalations in price along with wild-eyed and intentional depression of wages guarantees a 1930s-style outcome -- and that's if we're lucky.
These acts were stupid, they've gone on for decades and now the check is on the table.
No technology has ever come into existence that doesn't follow the pattern of "faster, cheaper and better."
Not once through history, and this will not be the first time that said reckoning will have to be faced and paid.