Dreams of artificial general intelligence are destroying the tools that actually run the U.S. economy—thanks entirely to misguided government policy.
The economic story of 2025 reveals a techno-feudal state where citizens fund unnecessary and harmful technology at the expense of what they truly need. Government-driven investments in hyperscale AI data centers, marketed as innovation and national strategy, now consume land, food, water, and energy on an unprecedented scale. Energy Secretary Chris Wright explicitly stated: “It takes massive amounts of electricity to generate intelligence. The more energy invested, the more intelligence produced.”
This policy shift has already warped markets and devastated consumer electronics. Capital once sustaining the digital economy’s hardware and software ecosystem is being diverted into subsidized “AI factories” chasing artificial general intelligence instead of practical, cost-effective narrow AI solutions. As a result, free chatbot slop proliferates while laptops, phones, and consumer hardware grow scarce and expensive.
For decades, personal computers delivered deflationary economic benefits—lowering the CPI for “personal computers and peripheral equipment” by 96% from December 1997 to August 2015, far outpacing medical care, housing, and food costs. Today, AI data centers are crowding out consumer electronics. Major manufacturers like Dell and Samsung have scaled back or discontinued entire product lines due to diverted components for AI chip production.
Prices for phones and laptops are surging. Dell and Lenovo recently imposed 15%-30% price hikes on PCs, citing insatiable demand from the AI sector. DRAM inventory levels plummeted 80% year over year, leaving just three weeks of supply—down from nine and a half weeks in July. Samsung has doubled DDR5 contract prices to $19-$20 per unit, while SK Hynix warns shortages will persist through late 2027.
The damage extends beyond pricing. Research into conventional computing technologies has stalled as capital and talent shift toward AI accelerators. Meanwhile, manufacturers retool factories: Samsung may exit the SSD market entirely, Nvidia threatens to cut RTX 50 series production by up to 40%, and Dell has already reduced RAM capacity in entry-level laptops from 16GB to 8GB—rendering devices unable to run the very AI applications they were designed for.
This policy-driven distortion reflects a broader pattern: government initiatives like Stargate have redirected investments toward AI infrastructure, creating incentives for firms to abandon consumer hardware. The result is not organic market evolution but deliberate resource reallocation that sacrifices everyday technology for speculative data center projects. As inventory collapses and prices spike, the U.S. economy faces its most severe tech bubble since the 2008 financial crisis—driven entirely by state policy rather than consumer demand.
