Read the press release and you'd think the AI market is blossoming into a competitive bazaar. Oracle will rent out Google's chips. It will also add OpenAI's Jalapeño processors and Cerebras hardware, and it will keep selling Nvidia. More options, more resilience, more choice.
Look at who is on the menu. Google is a cloud rival of Oracle. OpenAI is Oracle's anchor customer and also its partner. Nvidia remains the unshakable supplier. This is a small club of firms that compete in public and cross-invest, cross-license and cross-rent in private. When Oracle's cloud chief says the new accelerators address "chip availability constraints," he is telling us what the scarce resource is: the computing power that every business, school, hospital and government will increasingly need. A handful of companies control it, and they are now wiring themselves together.
That should trouble anyone who remembers how the last tech cycle ended. We were promised an open internet and got a few landlords. Cloud computing already concentrated into three dominant providers. Now the next layer, the chips and models that sit on top of the cloud, is being stitched into the same structure before any regulator has asked who benefits. Google's decision to sell its custom silicon to outside customers may well lower prices at the margin. But a cartel can also behave generously while it is still dividing the territory.
The cost of this buildout is not borne only by shareholders. Oracle has been borrowing heavily to build data centers for its AI commitments, and the whole industry's spending depends on the assumption that demand will justify it. Circular arrangements, in which investors, suppliers and customers are often the same companies, are exactly how a bubble looks from the inside. If it pops, the executives will have their golden parachutes. Workers, pension funds and the communities that were promised jobs will absorb the losses.
And even if the boom holds, the public is already paying. Data centers are enormous consumers of electricity and water. In several regions, utilities are asking ordinary ratepayers to help finance the grid upgrades. Local governments are handing out tax abatements in exchange for a few dozen permanent jobs. The industry calls this progress. A household watching its power bill climb would call it a subsidy.
This is where my own side deserves scrutiny. Too many Democratic governors and mayors have competed to host these facilities, waving through abatements and secret negotiations because "AI" sounds like the future and nobody wants to be the state that said no. That is not a progressive industrial policy. It is a bidding war in which the public sets the price too low.
A real Left position is neither panic nor technophobia. Compute is becoming infrastructure, and infrastructure carries obligations. Companies that build on public grids should pay the full cost of the capacity they require, with contracts open to regulators. Subsidy deals should come with enforceable job and wage terms, and clawbacks if the promises fail. Antitrust enforcers should examine the web of equity stakes, supply deals and exclusive arrangements among chipmakers, clouds and model developers before it hardens into the market's permanent shape. Smaller firms, universities and public-interest researchers need guaranteed access to compute at fair terms, so that the future of AI isn't decided by whoever can afford the rent.
Oracle's announcement is a business story about supply constraints. It is also a reminder that the supply is controlled by very few hands, and those hands are increasingly clasped together. We can ask hard questions now, while the architecture is still being poured, or we can ask them after the next crash, when it will be too late to matter.
How it may affect me
If you live near a planned or existing data center, your electricity costs may be affected by how your state regulator allocates grid-upgrade expenses. Check your public utility commission's dockets for large-load tariffs and data center contracts, and attend local hearings before tax abatements are approved.
