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Without Subsidies, AI Is Unaffordable

Let's pull all this into an undeniable conclusion: AI is based on massively subsidizing users' costs.

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Charles Hugh Smith
Jul 08, 2026
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What’s already abundantly clear but verboten to say as it would pop the bubble of AI valuations and triumphalism is that AI is unaffordable once the direct and indirect subsidies are withdrawn. Nothing that consumes this much electricity and requires such an immense scale of costly processing and memory capacity can be low-cost, never mind free.

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