I know: quite a long time since I last posted. Been spending a lot of time getting all the agents’ bugs worked out once and for all, and yes, I’m quite close. But that’s not why I’m here.
Caught this post on BlueSky earlier today.
While I don’t think Eris is wrong in saying this might be a signal from OpenAI that “AGI” might be further off than Silicon Valley is suggesting, I think it might be a sign of something bigger: market reality.
Looking at OpenAI’s announcement in a bubble, it does certainly seem as if the company isn’t worried, at least in the near term, about a sudden need for increased capacity.
Guaranteed Capacity guarantees capacity in the 12 to 36-month time frame, not in the near term. That suggests that OpenAI doesn’t believe that AGI and its associated massive increase in capacity needs won’t materialize before Summer 2027, and feels confident in its capability to handle current needs.
Okay, that’s fair. Even the most pro-AGI folks agree that’s the absolute earliest anyway: parts of AI are advancing at far slower rates than others. Especially in persistence, AI is not developed enough to truly be fully autonomous.
But there’s another announcement to consider, and that was from Anthropic. On May 6, it announced a massive capacity deal with SpaceX, which involves all capacity at its Colossus data center (~500 MW), joining 10 Gigawatts of capacity that will come online throughout the year and into 2027 thanks to deals with Amazon, Google, and Broadcom.
So in the next year alone, about 11 GW of new capacity will come online, all exclusively for the use of Anthropic models. That. Is. Huge.
This is a problem for OpenAI. While data center buildouts continue apace, even in the most rosy scenarios, the rate will decrease. This is due to a variety of factors:
- Bipartisan opposition to data center buildouts, especially at the local level
- New state and local regulations, especially in zoning, will be pushed by this opposition. Federal law cannot force municipalities to accept data centers, especially if legitimate concerns (power needs) are unavailable or not met.
- Lack of power-generating capacity.
That last one’s a big one. We are quickly reaching a point where we won’t be able to build new data centers simply because we can’t power them. I feel like this real-world reality pushed Anthropic to make aggressive near-term moves for capacity, as they know it’s no longer a matter of if, but when.
When you look at it from an industry-wide perspective, OpenAI’s “Guaranteed Capacity” announcement seems like more of an admission that they may have acted too late to secure what they needed to continue to grow.
As we move toward the end of this decade, the AI race is going to become much more defined by who had the better foresight than better technology.
It may not happen today, this month, or this year. But sooner or later, new data centers won’t be denied due to opposition, but the fact that there’s no power for them. OpenAI may find itself one of the first victims.