Power ranges: AI faces supply crunch

This episode of The Intelligence from The Economist explores two major themes: a looming supply crunch in the AI industry and the alarming evolution of sophisticated cybercrime. The first half examines how explosive demand for AI tools is outpacing the physical infrastructure needed to support them, from GPU shortages to delays in data center construction and bottlenecks in semiconductor manufacturing—particularly due to reliance on NVIDIA and TSMC. Despite massive investments, including billions from cloud giants and ambitious but unrealistic plans like Elon Musk’s proposed TerraFab, the hardware lag behind software innovation, raising concerns about rising costs and slowed AI adoption. The second half shifts to the dark side of technological advancement, spotlighting how criminals are now using AI-powered malware, spyware-as-a-service, and deepfakes to launch rapid, devastating attacks—such as the case of an Indonesian NGO worker whose bank accounts were drained in minutes. These cybercriminal networks, fueled by billions in illicit revenue and operating transnationally, are increasingly leveraging AI to evade detection and scale operations. Finally, the episode closes with the dramatic pivot of Allbirds from a beloved footwear brand to Newbird AI, a compute infrastructure company, symbolizing the broader struggles of millennial-era direct-to-consumer brands facing rising costs, saturated markets, and the end of easy venture capital. The episode paints a picture of innovation’s double-edged sword: progress is accelerating, but so are the systemic risks and failures that come with it.