Data centers will eventually drive down electricity prices, perhaps to zero. If not, close to zero.
Which means Ohio gubernatorial candidate Vivek Ramaswamy is on to something. And that's true even if he was simply backtracking.
For background, we turn to “revelations” of Ramaswamy’s past support for data centers. Supposedly it was energetic. Gasp. Polling data in the present indicates that data center enthusiasm is bad politics, which explains Ramaswamy’s efforts to put a happy face on his past apostasies.
Specifically, Ramaswamy has called for free electricity. Republicans can sure go left when it's needed, or not.
More specifically, Ramaswamy's expressed view is that those living near data centers should enjoy free electricity. Ramaswamy's pandering is a bit odious. But for seemingly the wrong reasons, the would-be Ohio governor has happened upon a brighter future that may include a zeroing out of electricity prices, all of it free of political force.
For evidence supporting the above claim, we need only contemplate the various AI's so prominently given life by data centers. Those who use Muse, Gemini, ChatGPT, Grok, Claude, and countless others do so largely without paying for the privilege. Stop and think about that.
AI's that give us advice, do endless amounts of research for us, write term papers, book reports, and thank you notes, do so for free or close to it. Except that nothing's free. And AI's are no different.
They can charge most of us next to nothing because corporate users of those same AI's pay them hundreds of thousands and millions annually for usage that's quite a bit more expansive. Which is the electricity point, and it's rooted in the brilliant truth that data centers are such herculean consumers of electricity.
Since they are, and since they'll hopefully be size consumers going forward, electricity producers will have every incentive to expand output. If the need for data centers grows as the work they represent becomes essential for billions of human workers rendered much more productive by data centers, it can only be that electricity-consuming data centers will proliferate.
In the proliferation, it's easy to see much lower electricity prices. Assuming soaring amounts of profitable consumption by data centers, the ability of utilities to charge individual consumers quite a bit less will grow too.
Bringing it back to Ramaswamy, his comment about free electricity was seemingly a pivot meant to spare him political blowback from his allegedly impolitic views of data centers in the past. Politics is revolting.
Just the same, Ramaswamy will arguably be proven right, albeit for the wrong reasons. If anything, Ramaswamy’s suggestion or promise hasn’t gone far enough.
Translated, it won’t just be free electricity for those close to data centers, it’s reasonable to speculate that much cheaper electricity consumption awaits us all. Such is the genius of mass consumption. It lowers prices for everyone.
If utilities can sell in gargantuan amounts to their biggest customers, they’ll have the profitable means to charge individual consumers much less. This isn’t fantasy, or theory, rather it’s a reality found in the genius of AI itself.
