Ruling-Class Control of AI Is Making Things More Expensive and You Poorer |
More focus is needed on the downsides of the AI “revolution,” which is better understood as a speculative bubble (built in part through shaky circular financing deals between chip maker Nvidia, cloud provider Oracle, and model builder OpenAI, among others) that’s liable to burst. If and when that happens, OpenAI CEO Sam Altman’s preemptive lobbying for a taxpayer-funded bailout is likely to pay off, leaving the public on the hook. That would be outrageous, of course, considering how much direct and indirect financial support tech giants have already received from federal and state governments, before and throughout the ongoing artificial intelligence frenzy. On the other hand, if AI “succeeds”—destroying millions of jobs, pillaging communities, and despoiling ecosystems in the process—working people will have subsidized our own subjugation. Widespread opposition to planned data centers across the political spectrum suggests that the public understands this.
Here’s a tangible downside: The prices of many essential goods are already rising as a result of the anti-democratic rush to build hyperscale data centers and the growing use of AI programs in numerous sectors. In what follows, we explain how the proliferation of both AI software (i.e., seemingly immaterial computational tools) and hardware (i.e., the resource-intensive and highly polluting infrastructure underpinning those tools) is driving up the costs of necessities now and in the future.
Energy-hungry AI systems require immense amounts of computing power. That’s why tech giants like Amazon, Google, Meta, and Microsoft are investing billions of dollars to expedite the construction of massive, primarily gas-powered data centers across the United States. This AI-driven surge in electricity demand, combined with the Trump administration’s ongoing attacks on renewable energy supply and battery storage, is putting increased strain on the power grid. The result? Higher utility bills.
According to a Bloomberg analysis published in 2025, “Wholesale electricity costs as much as 267% more than it did five years ago in areas near data centers. That’s being passed on to customers.” The rapid development of data centers connected to PJM Interconnection—the largest power grid operator in the United States, serving 67 million customers throughout the Midwest and Mid-Atlantic—increased the cost of procuring electricity by $9.3 billion from June 2024 to June 2025, with expenses only expected to rise further.
If this trend continues and data centers become the majority-users of a utility, then utilities may demand even deeper sacrifices from everyday ratepayers to keep their most powerful customers happy.
Residential ratepayers are shouldering this burden unfairly. As the beneficiaries of state-granted monopolies, for-profit utilities are subject to state regulation of prices. Public utility commissioners are supposed to set rates that enable customers to receive affordable power and utilities to cover operating costs and make enough profit to attract investors to fund infrastructure expansions and upgrades. For years, however, increasingly captured commissioners have been approving rate hike requests that pad the pockets of utility executives and shareholders (to the tune of $50 billion per year in excess profit, according to the American Economic Liberties Project).
Now, there’s mounting evidence that state regulators are subsidizing Big Tech’s out-of-control power consumption by forcing customers to fund discounted rates for data centers. This is a boon for investor-owned utilities, which profit from greater energy use. For the rest of us, it makes it harder to scrape by every month. If this trend continues and data centers become the majority-users of a utility, then utilities may demand even deeper sacrifices from everyday ratepayers to keep their most powerful customers happy.
Earlier this month, the US Centers for Medicare and Medicaid Services (CMS) launched the so-called Wasteful and Inappropriate Service Reduction (WISeR) Model. This pilot program allows six companies in six states to use AI to determine whether traditional Medicare enrollees’ requested medical care should be covered.
Reporting on this AI-powered prior authorization program last year, the New York Times noted that “similar algorithms used by insurers have been the subject of several high-profile lawsuits, which have asserted that the technology allowed the companies to swiftly deny large batches of claims and cut patients off from care in rehabilitation facilities.” Firms tapped to manage the WISeR Model “would have a strong financial incentive to deny claims,” the newspaper observed. “Medicare plans to pay them a share of the savings generated from rejections.”
An early warning that CMS Administrator Mehmet Oz is imposing “AI death panels” aimed at preventing seniors from accessing needed healthcare is apt. It’s also worth stressing that Medicare Advantage and private insurance plans have already been using AI-powered prior authorization, with costly and deadly effects for ordinary people.
Property insurers, too, are increasingly relying on AI to project—with zero transparency and questionable accuracy—climate risks, which is contributing to coverage withdrawals and rate hikes in communities around the United States. According to a recent report from McKinsey & Company, the insurance industry’s growing use of AI has led to “a 10 to 15% increase in premium growth.” While industry profits and executive compensation are on the rise, homeowners and renters alike are being hurt by the declining availability and affordability of home insurance. A climate and insurance-driven foreclosure wave, which would starve municipal budgets and could trigger a broader economic crisis, is a real possibility.
Two shoppers could walk into the same grocery store at the same time and purchase the same product—and yet be charged different prices. This was the conclusion of a recent........