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AI Compute Is Running On Fumes
Out of power // Illustration by Kate Walker
As AI usage grows exponentially, top tech firms are grappling with insufficient computing power to keep up with demand — leading to system outages even at companies like Anthropic.
The Big Picture: AI compute — the output of data centers filled with microchips that power these systems — is turning out to be a finite resource that’s already running short. That could put a wrench in companies’ plans to remake themselves in the age of AI.
Behind The Curtain: If you’re in line to get some compute for your AI, stay in line.
The recent explosion in demand for compute is driven by the rise of autonomous AI “agents,” which can be programmed to complete complex tasks. These agents require far more resources than simply querying a chatbot.
It’s not just companies using these agents — their customers are, too. That’s putting added pressure on firms to secure as much compute as possible… or build infrastructure more quickly.
The compute crunch has led to project cuts to free up resources (goodbye, OpenAI’s Sora), metering supply to customers (Anthropic is in ration mode for Claude Code), and major price increases (rentals for Nvidia’s Blackwell chips have nearly doubled).
Last Token: While companies are racing to build data centers to keep up, those projects take time — and a lot of money. And that’s not to mention growing pushback from communities, which argue they juice up electricity costs and strain water resources.
No wonder so many companies are exploring data centers in space or underwater. But while those projects may solve future compute issues, those looking to get ahead in 2026 may need to update their plans.
The Future: Due to the compute deficit, companies may start making increased allowances a key bargaining chip to win over talent.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.