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The Steep Cost of A.I.

October 23, 2025
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The Steep Cost of A.I.
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This week, problems at an Amazon data center in Northern Virginia caused crucial services to go down across the world. The outage brought home just how much the global internet relies on a few — primarily American — technology providers. And that reliance will only grow in the age of artificial intelligence.

Today, my colleagues Adam Satariano and Paul Mozur write about A.I. haves and have-nots, and the steep cost of pursuing “A.I. sovereignty.”

What it costs to keep up with the A.I. boom

Adam Satariano” class=”css-dc6zx6 ey68jwv2″>Paul MozurAdam Satariano and Paul Mozur

We’re reporting on A.I. around the globe.

Soon after Microsoft opened a data center near La Esperanza in central Mexico last year, the town began suffering power outages. At a local health clinic, a doctor stitched up children by flashlight and turned away patients when equipment stopped working. One patient was rushed to the hospital after an oxygen concentrator lost power.

This is what can happen when data centers — power-and-water-hungry warehouses that provide the computing power and storage needed to train and run A.I. systems — move into regions not prepared for them.

Haves and have-nots

Over the past year, we’ve been following the A.I. boom to understand the consequences in countries far from the center of it.

In June, we wrote about what we called the global A.I. divide. We found that the race for computing power was splitting the world into haves and have-nots. The U.S. and China dominate. Just about everyone else, whether they’re in Europe or South America, fear they’ll be left behind. That could stunt growth, stall scientific research and deepen dependence on foreign corporations and governments. In September, the U.N. warned that this divide ranks among A.I.’s most pressing global threats.

More recently, we’ve been reporting from countries that are trying hard not to be left out. Their strategy is to attract investment in data centers with subsidies, land deals and tax breaks; the hope is that jobs, start-ups and a foothold in the digital economy will follow. But we found these choices came with severe consequences.

Mexico, for example, followed that playbook. Querétaro, an industrial region north of Mexico City, has become the country’s hub for data centers thanks to friendly government policies. But residents told us the benefits had come at a cost.

Poor communities that already struggled with water and electricity shortages said those problems had worsened. Families threw out spoiled food when refrigerators stopped functioning. Neighbors pooled cash for private water deliveries. Elementary schools closed when their toilets wouldn’t flush.

Microsoft disputes that its data centers are to blame, saying its facilities use only minimal power and water. The local utility company pointed to causes like lightning strikes and wandering animals. Amazon and Google also operate facilities in the state.

But while it can be hard to make a direct link between any data center and local power and water shortages, experts told us that building in areas with unstable grids and existing water strains will pressure already fragile systems, increasing the potential for a cascade of effects.

Mexico is not alone experiencing problems. We also found them in places like Ireland, where data centers consume more than 20 percent of the country’s entire electricity output; this has led to a moratorium on construction around Dublin. In Chile, there’s been concern that data centers are putting depleting aquifers at risk.

A.I. sovereignty

There is also a cost for missing out on A.I.

In Argentina, Nicolás Wolovick, a computer science professor, laments the loss of top students to countries with more powerful computers. He operates one of his country’s most powerful A.I. systems out of a converted room, while in the U.S., OpenAI is building megaprojects the size of New York’s Central Park.

In Kenya, coders from one start-up wait until Americans are asleep to access U.S. servers, because that’s when the internet speeds are faster. They don’t have their own servers to draw on.

These challenges don’t have simple fixes. Policymakers talk about A.I. sovereignty, in which countries and regions build their own computing infrastructure instead of relying on global tech giants. The approach won’t work for every country. It’s expensive and uses huge amounts of resources.

Yet, it illustrates the fear that a handful of American and Chinese companies will dominate what could be this century’s most important technology, and reap its rewards: power, wealth and freedom.

In Africa, for example, a company called Cassava is developing regional data centers to serve start-ups, researchers and businesses. In Chile, there’s a push to force large tech companies that build data centers in the country to share A.I. resources locally.

Whether any of this works could determine the makeup of economic and geopolitical imbalances in the future. The hope is that there is a way to capture the promise of A.I. while keeping the damage in check. If not, the choice is stark: build for the future at a steep cost or be left behind.


Interested in providing feedback on this newsletter? Take our short survey here.


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Football: Arsenal kept their Champions League campaign perfect with a 4-0 victory over Atlético Madrid.

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New Delhi

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Picnic at Sunder Nursery, a sprawling garden in the heart of New Delhi that’s surrounded by Mughal-era monuments. It’s the place where the British experimented with plants and trees during colonial times.

Eat at Triveni Terrace Cafe, an open-air cafe inside the Triveni Kala Sangam arts complex, one of several modernist architectural gems in central Delhi. Come for a plate of pumpkin and lentil kebabs or some coffee and ginger cake. From the cafe, you might hear music from the dance classes held in the amphitheater next door or wander over to the nearby gallery.

Shop at Mehar Chand Market, a strip near Lodhi Road. This market was established soon after India gained independence, by refugees who had fled Pakistan after partition. Today, it’s perhaps best known for clothing boutiques selling contemporary designs of traditional textiles.


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You’re done for today. See you tomorrow! — Katrin

A correction: Yesterday’s newsletter misstated the title of a book in our recommendations section. It was “King Sorrow” by Joe Hill, and not “King of Sorrow.”

We welcome your feedback. Send us your suggestions at [email protected].

Katrin Bennhold is the host of The World, the flagship global newsletter of The New York Times.

The post The Steep Cost of A.I. appeared first on New York Times.

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