The AI Boom: Profits for the Few, Scarcity for the Many (2026)

Imagine a world where the apocalypse isn't a fiery disaster, but a booming marketplace—where stock markets soar to dizzying heights, GDP ticks upward, and tech giants promise untold riches from artificial intelligence. Yet, beneath the surface, everyday life feels increasingly bleak. Is this the dawn of prosperity, or are we witnessing something far more unsettling?

But here's where it gets controversial: everything feels kinda…terrible, doesn't it?

Jobs vanish not in dramatic crashes, but through a slow, insidious erosion. The cost of basic necessities like food and housing stubbornly refuses to drop. The chasm between the sleek digital realm and our tangible, physical world grows ever wider. We're assured this is merely a temporary transition, that 'efficiency' comes with inevitable messiness. Yet, that nagging sense of unease isn't paranoia—it's a rational response to a fundamental shift. Those upward-pointing arrows on stock charts no longer reflect the vitality of the average person's economy; instead, they chart the triumph of a takeover.

We're observing a profound transformation in governance itself. Power is slipping from public bodies to a web of private corporations, and alarmingly, we're the ones holding the door ajar for them.

When Silicon Valley Acquired the Government

For decades, we've discussed the 'revolving door'—that cozy arrangement where officials exit government roles only to land lucrative positions at the very companies they once oversaw. It was a straightforward conflict of interest, one we could grasp. But that analogy falls short now. This resembles a full-blown merger.

A select group of billionaires and venture capitalists has surpassed mere lobbying. They're constructing the very framework of the state themselves. No longer content with bending the rules, they aim to author the code that enforces them.

Consider the key figures:

Peter Thiel: The Palantir founder who's openly declared (https://www.theatlantic.com/politics/archive/2023/11/peter-thiel-2024-election-politics-investing-life-views/675946/) that democracy and freedom are incompatible.
Elon Musk: Who leverages his platforms to promote 'techno-populism' while clinching enormous federal deals.
Marc Andreessen: The VC whose 'techno-optimist manifesto' urges unchecked technological advancement, disregarding societal repercussions.

These aren't merely entrepreneurs; they're architects of the state. Over the past decade, they've funded a pipeline of talent into pivotal government roles.

Thiel's ex-chief of staff, Michael Kratsios (https://www.whitehouse.gov/articles/2025/03/ostp-press-release/), steered the White House Office of Science and Technology Policy.

An Anduril executive—backed by Thiel's Founders Fund—was appointed Army under-secretary despite holding up to $1 million in company shares (https://www.authoritarian-stack.info/).

This strategy has yielded results. By late 2024 and into 2025, we witnessed a significant transfer of federal authority to private entities.

SpaceX secured a $1.8 billion secret deal (https://www.reuters.com/technology/space/musks-spacex-is-building-spy-satellite-network-us-intelligence-agency-sources-2024-03-16/) with the National Reconnaissance Office for an extensive spy satellite system.
1789 Capital, co-founded by Donald Trump Jr., invested in Vulcan Elements, which promptly secured a $620 million Pentagon contract (https://techcrunch.com/2025/12/03/company-backed-by-donald-trump-jr-s-firm-nabs-620m-government-contract/).
Palantir saw 55% of its revenue—about $1.7 billion—stem directly from government contracts by late 2024 (https://www.visualcapitalist.com/cp/where-does-palantirs-revenue-come-from/).

They've uncovered that the ultimate profit engine isn't peddling goods to shoppers; it's delivering 'governance as a service.'

We cheer this efficiency, but it poses a thorny dilemma: When a corporation operates the software governing the nation, who truly holds the reins?

And this is the part most people miss: Abundance for the elite, scarcity for the rest.

This emerging system demands immense resources.

Visionaries of this revolution frequently extol 'abundance.' Tune into Sam Altman or AI proponents, and they'll enthuse about an impending 'fusion utopia,' where AI vanquishes climate woes and unleashes boundless clean energy.

That's the pitch, and perhaps it'll materialize someday. But today's reality involves acute resource strain.

To fuel colossal data centers (https://oilprice.com/Energy/Energy-General/Data-Centers-AI-and-Energy-Everything-You-Need-to-Know.html) powering their AI, these firms are siphoning from the U.S. energy grid on an unprecedented scale.

The International Energy Agency (IEA) forecasts data center power use more than doubling (https://www.iea.org/reports/energy-and-ai/energy-demand-from-ai), from 415 terawatt-hours in 2024 to 945 TWh by 2030.

To illustrate, that's akin to introducing Japan's total electricity demand into the global mix within six years.

From where will this energy originate?

Not futuristic fusion reactors, but the existing grid upon which we all depend.

In the PJM market, spanning 13 states from Illinois to New Jersey, data center needs have already inflated capacity costs.

To satisfy this, the government is shifting gears. The Department of Energy is boosting funding (https://oilprice.com/Energy/Coal/Coal-Is-Making-a-Comeback-in-the-US-Under-Trump.html) for coal and natural gas to sustain the servers.

This fosters a tricky situation:

Big tech secures 'clean' baseload power, such as Microsoft's arrangement to revive the Three Mile Island nuclear plant (https://oilprice.com/Alternative-Energy/Nuclear-Power/Three-Mile-Island-Reactor-Gets-a-1-Billion-Government-Lifeline.html) exclusively for its use.
The public grid shifts toward the erratic 'spot market,' frequently gas-dependent.
Local areas shoulder environmental burdens, like the 6 billion gallons of water consumed by Google's facilities in 2024.

It's not inherently malicious—it's arithmetic. Yet, the equation results in consumers footing higher bills to underwrite another AI surge.

How 'Efficiency' Is Eroding the Middle Class

This transformation extends beyond utility costs; it's reshaping the job market.

Markets thrive on 'efficiency' promises, and technology undeniably boosts productivity. For workers, though, 'efficiency' resembles a barrier.

We fixate on splashy layoff figures. Indeed, in early 2025, over 126,000 tech employees (https://news.crunchbase.com/startups/tech-layoffs/%5D) lost roles, per Crunchbase data.

But the deeper narrative unfolds post-layoff.

Enter 'silent firing'—a subtle phenomenon.

Firms aren't merely terminating staff; they're refraining from replacements. When someone departs, duties vanish or shift to algorithms.

A Zety and Allwork study revealed 73% of employees (https://allwork.space/2025/11/workers-say-quiet-firing-is-everywhere-as-73-report-being-pushed-out-in-2025/) encountered 'quiet firing' in 2025, where support dries up and positions become obsolete without fanfare.

Automation targets entry-level roles first. Aspiring junior analysts, copywriters, or new coders find opportunities dwindling that would have existed five years prior.

This compresses the middle class, widening gaps in career paths. Leaders are aware, yet proceed.

The Pitfall of Exporting Global Sovereignty

This dynamic transcends U.S. borders. 'Privatized sovereignty' is spreading worldwide.

Europe espouses 'Digital Sovereignty,' seeking autonomy. Yet, crafting indigenous tech is costly and sluggish.

The Centre for European Policy Analysis (CEPA) estimates true independence at €3.6 trillion (https://cepa.org/article/digital-sovereignty-can-europe-afford-it/).

Few nations are equipped or inclined to foot this. Thus, they ink deals.

74% of Europe's public companies (https://proton.me/blog/us-tech-rules-europe) rely wholly on U.S. platforms.

Take the UK.

The NHS inked a £330 million agreement (https://www.politico.eu/article/palantir-bid-wins-480m-british-health-service-contract/) with Palantir for its data infrastructure. It's streamlined, effective—but entrusts British health data to a U.S. firm.

Or Ukraine, whose defense hinges on Starlink. It's saved lives, but binds military comms to one American company's whims.

It's a compromise: Access to premier tech, but at the cost of becoming 'client states.' Genuine foreign policy autonomy evaporates when infrastructure is leased from California.

If major G7 powers can be demoted thus, the average U.S. worker is doomed.

The architects anticipate this, crafting a 'safety net' for the displaced.

UBI: A Deceptive Safeguard

We must address the 'safety net' these innovators pledge.

Every tech mogul echoes the refrain: AI will obliterate jobs, necessitating Universal Basic Income (UBI).

It seems benevolent, unavoidable. But actions betray intentions—more snare than shield. While hyping future UBI, they're dismantling funding mechanisms now.

Elon Musk insists UBI is 'essential' in an AI era. Yet, he spearheaded the Department of Government Efficiency (DOGE), slashing trillions in federal outlays.

You can't slash budgets, ax personnel, gut the IRS, and simultaneously dispense checks to 330 million citizens.

Nor is he donating personally.

He remarked (https://www.nytimes.com/2025/12/02/us/politics/elon-musk-foundation.html#:~:text=Mr.%20Musk%20is%20the%20world's,told%20his%20interviewer%2C%20Nikhil%20Kamath.): 'The biggest challenge... is trying to give money away beneficially.'

If philanthropy stumps him with his fortune, why trust him to manage national funds?

Sam Altman, OpenAI's head, proposes 'Moore's Law for Everything (https://moores.samaltman.com/),' taxing capital for citizen dividends.

Yet, his venture—Worldcoin (https://world.org/cofounder-letter)—exposes the motive.

It trades iris scans for crypto tokens, amassing biometric data for private ownership.

This is user acquisition, not welfare.

For Peter Thiel, UBI aims to abolish government, not aid the needy.

UBI is the 'nanny state's' farewell package: Checks in exchange for axing Social Security, Medicare, infrastructure.

It masquerades as liberation, but it's a poor bargain.

Checks, no matter the size, can't replicate state leverage—bulk healthcare pricing, subsidized transit.

Swapping for cash forces 'retail' purchases in markets aware of inflows. It's exchanging stable rights for fluctuating subscriptions, prices ever-rising like Netflix fees.

Unmasking the 'Self-Made' Myth

Before remedies, examine the facts. Audit the 'self-made' techno-oligarch fable.

They peddle libertarian brilliance—empires born in garages, battling regulatory fists.

Truth: The state was their backer. We were.

Tesla endured via a $465 million DOE loan (https://www.energy.gov/lpo/tesla) in 2010.
SpaceX thrived on NASA contracts shunned by private markets.
Palantir incubated by CIA's In-Q-Tel (https://www.iqt.org/).
OpenAI seeks $500 billion taxpayer-funded grids and credits (https://openai.com/index/announcing-the-stargate-project/).

Beyond cash, tax structures enable hoarding.

2017 cuts dropped corporate rates from 35% to 21%, loopholes let borrowing tax-free via stocks, while workers tax every paystub.

Hidden subsidy: Resource plunder.

Data centers depleting aquifers burden towns with upgrades. Firms cool servers; communities pay.

Not just water—air.

Despite 'net-zero' claims, AI's secret: Diesel.

For 99.999% uptime, generators rival airports in emissions, fouling local air for seamless chats.

Noise too.

Concrete behemoths hum incessantly, a low drone invading homes, sacrificing local peace for reliability.

Infrastructure costs billions in lines, often borne by us, not them.

We've socialized risks, costs, pollution; privatized gains, IP, control.

Reclaiming Our Stake

So, onward?

The prior pact: Firms profit, furnish jobs.

Expired.

They're designing jobless systems.

Public 'ROI' isn't employment, nor pie-in-the-sky UBI amid eroded taxes.

With our capital and burdens, we deserve returns.

A fresh ROI model.

The Sovereign Equity Framework

In VC, investors funding de-risking gain equity, board seats, upside shares.

Taxpayers labeled it 'subsidy.'

CHIPS Act pumped $52 billion into semiconductors (https://www.wired.com/story/chips-act-52-billion-semiconductor-production/)—citizens got the tab.

Bad deal.

Adopt Sovereign Equity.

Government loans, credits, contracts yield equity warrants. Not socialism—capitalism. Like Buffett's 2008 bank bailout, netting billions via warrants.

Blueprint: Alaska Permanent Fund (https://apfc.org/).

Since 1976, oil revenues fund a wealth fund, paying dividends to residents.

Treat digital, energy assets similarly.

Equity profits fund a National Wealth Fund, distributing dividends.

We shoulder risks; we claim gains.

Tax Automation to Sustain the Tax Base

Tax code favors machines over humans.

Hire a worker: Payroll, SS, healthcare taxes. Buy GPUs: Depreciation deductions. We're sponsoring replacement.

Balance with automation surcharges.

Not innovation punishment—survival. Payroll taxes: 30-35% federal revenue (https://www.congress.gov/crs-product/R47062). AI displacing workers collapses it, deficits balloon, economy fractures.

Bill Gates concurred (https://www.weforum.org/stories/2017/02/bill-gates-this-is-why-we-should-tax-robots/): Tax robot output like human wages.

Replacing humans with AI keeps output, voids taxes. Impose levies on that output.

Data Dividends

Data equals oil, yet unpriced.

AI models, valued at trillions, trained on humanity's output: News, art, code, data. Scraped 'digital commons' gratis, resold at $20/month.

Elsewhere, theft. Drill another's land: Royalties. Use timber: Pay.

Generative AI market hits $1.3 trillion by 2032 (https://www.bloomberg.com/company/press/generative-ai-to-become-a-1-3-trillion-market-by-2032-research-finds/).

Raw materials can't be free. We're suppliers; suppliers earn.

Universal Basic Services

$5,000 UBI amid doubling housing, energy, internet costs? Subsidy for landlords, utilities.

Optimal ROI: Reduce living 'overhead.'

Shift to Universal Basic Services (UBS). Fund via equities, taxes, dividends for modern necessities:

Public Compute: Processing as utility. State clusters for researchers, startups at cost, eroding giants' dominance.
Green Public Transit: Optional car ownership, easing debt.
Digital Infrastructure: Broadband as right, not monopoly subscription.

Energy grid, labor limits hit. 'Infinite growth' clashes with finite Earth.

'No growth' needn't mean destitution.

Vibes sour because, intuitively, the contract shifted: Public institutions to private platforms.

The 'New OS' installs—speedier, efficient, impressive.

But do we own this future, or merely use it?

What do you think? Is this privatization of power a necessary evolution, or a dangerous overreach? Do you believe UBI could truly safeguard against job losses, or is it a red herring? Share your views in the comments—do you agree, disagree, or see a controversial twist we've missed? Let's discuss!

By Michael Kern for Oilprice.com (http://oilprice.com/)