Carney's AI promise that no one asked for

Update: Evan Solomon promised an average of $1.5M to 44 AI companies in Canada. For some reason, they didn’t name the companies.

Mark Carney announced on Bluesky yesterday, “it’s time to build.” This was on the heels of an announcement in Vancouver where MPs, mayor Ken Sim and employees from Telus announced that Telus would build sovereign AI in Canada.

Telus CEO Darren Entwhistle, surely thinking about how much of an incredible scam these projects are, said, “They’re going to be sexy as hell.” Sure thing, bud. A normal comment about massive energy-sucking factories that will deliver to Canadians nearly nothing. One of the centres will be built in downtown Vancouver.

Even though Minister Evan Solomon announced the project, the government has not publicly said what they’re prepared to pony up for it. As I am in the final weeks of writing my book about the decline of Canadian democracy, this is a very good example — if Canada isn’t investing anything in this project, why is a minister announcing it? Oh right, there is near certainly a backroom deal that we aren’t allowed to know about yet.

Now, I don’t recall Carney being elected by promising to build massive data centres. That wasn’t part of his plan. As much as Carney wants to claim that this is for sovereign AI infrastructure, Telus is a private company and is not Canada. Canadians don’t actually get anything out of this other than a big, probably completely unsexy building in the middle of downtown Vancouver that will power Telus to gobble up more of our public health system through Telus’ health services wing.

What’s worse, while the BC projects will be powered by hydro (obviously) Taylor Noakes found that the Carney will allow dirty energy to power AI data centres, something that happened after intense lobbying just a few months ago.

Americans are realizing the impact of these centres, which have grown significantly in the past few years. Consider this, from the Lincoln Institute of Land Policy:

data centers truly are resource-ravenous. Even a mid-sized data center consumes as much water as a small town, while larger ones require up to 5 million gallons of water every day—as much as a city of 50,000 people.

Powering and cooling their rows of server stacks also takes an astonishing amount of electricity. A conventional data center—think cloud storage for your work documents or streaming videos—draws as much electricity as 10,000 to 25,000 households, according to the International Energy Agency. But a newer, AI-focused “hyperscale” data center can use as much power as 100,000 homes or more. Meta’s Hyperion data center in Louisiana, for example, is expected to draw more than twice the power of the entire city of New Orleans once completed. Another Meta data center planned in Wyoming will use more electricity than every home in the state combine

These facilities also draw huge amounts of water to help keep them cool. In the United States, citizens are paying for these centres, while the companies that own them make massive profits: “Data centers are among the reasons ratepayers nationwide have seen their electric bills increase at twice the rate of inflation in the past year. Part of that is the new infrastructure data centers will require, such as new power plants, transmission lines, or other investments. Those costs, as well as ongoing grid maintenance and upgrades, are typically shared by all electric customers in a service area, through charges added to utility bills.”

Every time it seems that Mark Carney uses the word “sovereign,” what he actually means is “Canadian corporate profits.” There’s nothing sovereign about these AI data centres, other than the fact that they’re located in Canada and owned by companies (that treat their customers like an endless source of money). Hundreds of people in Sherwood, Regina protested a proposed Bell Canada data centre, but government-appointed councillors who don’t even live there voted in favour. I guess it all happened in Canada so that’s sovereignty?

Carney doesn’t actually care about Canadian sovereignty, digital or otherwise. If he did, he would have announced a made-in-Canada version of Microsoft products to help Canadians untie themselves from the American supercompany just to be able to do word processing. I wouldn’t be writing this post on Substack. We’d have a public Internet. We would have Canadian tools that would allow us to browse and send emails, and a Canadian videoconferencing platform. We would not be sold in every minute of our digital lives to foreign companies.

Neither would we allow the Teluses, Rogerses and Bells of the world to charge us higher fees than most telecoms in the world. We wouldn’t allow these companies to move into the healthcare and education spaces. We’d have Canadian digital storage options.

But we don’t, because sovereignty just means Canadian profits.

AI is a giant bubble. People are already showing signs of fatigue with interacting with AI images. AI writing is increasingly garbage, full of words that either no one uses or don’t actually exist. AI videos on Youtube serve what purpose, beyond making everyone’s brains fall out of their ears?

Huge investments in giant buildings are touted as helping the economy because they employ construction workers — 1000 according to yesterday’s announcement. The thing about construction workers is that they can build anything and it’s the same economic benefit. The promised $9B in economic activity will be what? Telus buying hydro from BC Hydro? Telus jacking their rates because people are being forced to use chatbots to ask TelusHealth about their chest pain? The projects will only create 525 jobs across the three centres. The government could build three new CRA offices, hire 1000 new workers and have them go to town on all the money that corporations hide from CRA and we’d get more economic development than these centres.

But there is a serious bubble growing in the United States that Canada would be wise to learn from. Consider this from Time:

At the core of the AI bubble is a basic math problem. There is a fundamental mismatch between the trillions being invested in the infrastructure to develop AI and the billions people and companies are spending to use AI. Specifically, J.P. Morgan Chase analysts anticipate $5 trillion of spending on AI infrastructure between now and 2030. This year alone, four tech companies—Amazon, Alphabet, Meta and Microsoft— have plans to invest $670 billion on AI infrastructure. When measured as a percentage of U.S. GDP, this is more than the Apollo space program, the U.S. interstate highway system, railroads, and every other major capital expenditure in U.S. history except the Louisiana Purchase, according to the Wall Street Journal. Yet OpenAI and Anthropic have annualized revenues of about $25 billion and $19 billion, respectively. Unless AI revenues grow by orders of magnitude soon, there’s a Grand Canyon-sized gap that will be hard to cross.

Sound familiar? Bell hasn’t announced who its AI company partner will be for its data centre in Regina. The Telus plans will use Nvidia chips but they didn’t say which AI company they’d be partnering with to actually operate the facility. Are we supposed to believe that a Canadian company that has not been revealed to us yet, is going to be able to scale faster than an OpenAI or Meta has been able to in the US?

Perhaps Solomon isn’t aware of the growing bubble south of the border. At the press conference, he explained: “‘What does digital sovereignty look like to you?’ Solomon asked during his remarks. ‘The truth is it looks like infrastructure … It looks like Canadian companies building things that will function under Canadian law, free from the coercion of others, used by Canadian researchers, Canadian innovators, Canadian businesses, and Canadian institutions. It looks like building, as the prime minister says, with steel, concrete, and code.’”

Infrastructure. The giveaway that these projects are little more than money laundering — inject fast cash through construction into the economy, allow Telus to attract investors. Cross everyone’s fingers. In the US, public money has had to make up some of the gap between investment and revenues, and there’s little question that the same will happen in Canada. As Ganesh Sitaraman and Asad Ramzanali write in Time, “Even if AI is a technology that is widely adopted and transformative for society, its mismatch of investment and revenues, coupled with all these financial interconnections, could crash the economy.”

What kind of sovereignty is this?

There has been no public debate on AI. Canadians have been told to embrace it, that it’s mostly good. Except, any time that it’s discovered that a public agency has used AI, it causes an outrage. People are not as all-in on AI as our corporate masters want (need) us to be. But Carney is not going to allow debate on this. He is going to plough through, hook Canada up to the promise of datacentres and while it will eventually go to shit, hopefully a few people can make some very handsome profits.