Is The AI Backlash Coming?

It’s 2026, in just a few years AI has gone from being a distant hypothetical, to something hundreds of millions of people use every week. Big tech companies are spending billions building out AI infrastructure. AI has been used to empower people to execute tasks far outside their area of expertise and comfort. A regular person with no programming skills can create a web application. An entrepreneur can get feedback and ideas on products they are developing. It can provide recipes for your left-over Christmas food and ingredients. Or it can help shorten and fact-check my overly long eToro posts like this one.

AI has undoubtedly brought immense benefits to companies and individuals who embrace it. But in recent months some meaningful downsides of AI have started to emerge - and I see a growing likelihood that people begin pushing back.

Electricity And Data Centers

I’ve spoken about this quite extensively over the last few years, so feel free to check out my last couple of posts about AI’s demand for electricity here: https://shorturl.at/GHJwc https://shorturl.at/5DuMD 

The US DOE (Department Of Energy) released a report a year ago projecting Data Centers could consume as much as 12% of all US electricity by 2028 vs around 4.4% in 2024. The International Energy Agency estimates global electricity demand from data centers will more than quadruple by 2030, consuming more electricity than entire countries such as Japan. Despite big tech investing heavily in new energy generation, mostly by building renewables and re-commissioning old nuclear power plants - it’s not enough. Supply is not keeping pace with the growing demand, leading to higher bills in many regions of the world where data centers are prevalent. 

A Bloomberg analysis of wholesale electricity prices across thousands of locations in the US revealed the price had increased as much as 267% over the past 5 years in areas located near data centers. This infographic from bloomberg adds a lot of colour.

Residents living close to data centers are not only impacted by higher energy bills though. Water is also required in high quantities for data centers, and noise pollution has become a major complaint for surrounding communities, turning AI data centers into an important local political issue in many regions.

Hardware

Hardware prices have exploded in the past year, and the impact of those higher costs have not yet hit mainstream consumers. PC gamers were among the first to feel the pain. High performance Memory especially Graphics chips are very similar to what is used in data centers. As demand has grown, gamers are increasingly bidding against tech giants with deeper pockets for their hardware, driving prices higher.

Memory producer $MU recently announced their exit from the consumer RAM market, halting sales to 3rd party brands, and discontinuing their own 30 year old Crucial Memory brand. They specifically cited AI demand as the reason for the decision. Samsung’s internal mobile and tablet division was reportedly denied RAM allocations for future devices by their own memory division, who were instead prioritizing AI clients. This has led to industry insiders suggesting that new smartphones, tablets, laptops and other devices could have worse hardware specifications than their predecessors, including flagship phones. Recent industry reports suggest that both $NVDA and $AMD will hike prices for their GPUs in early 2026 by more than double in some cases. The Nvidia 5090 (their flagship Graphics Card) is expected to rise from $1,999 to $5,000 - making already expensive top-end gaming PC’s completely unobtainable for most consumers. The end result - consumers and businesses are left with more expensive, less powerful devices. Something I believe could impact productivity.

AI Slop & Disinformation

Again, I’ve written about this quite a lot recently, check out my eToro post here for a deeper dive: https://shorturl.at/m1LwA  AI slop is arguably adding to the frustrations of those facing higher electricity bills and more expensive electronics, because a huge amount of the resources being consumed by AI are ultimately being wasted generating useless AI Slop that doesn’t bring any tangible value or productivity benefits to the world.

More nefarious than that though, is the use of AI to produce and spread misinformation and disinformation across social media. The EU is now taking major enforcement action against X under the Digital Services Act because of their failure to tackle disinformation, and enabling misleading information to spread. I see this as the first in what could be a wave of actions taken against AI by the EU. Tighter regulations and restrictions appear inevitable over the coming years.

Content Without Consent

This is very much related to the AI Slop & Disinformation category above, and I touched on it in the same eToro post as linked above. A large number of AI models were, and continue to be trained on data that they do not have explicit permission to use in this way. This problem most significantly impacts creative industries - Photographers, Writers, Graphic Designers, Artists, Song Writers, etc.

Interestingly, the US Copyright Office released a report last year stating that some uses of copyrighted material for AI training are not defensible under ‘Fair Use’. In the EU there are calls from politicians to improve opt-out mechanisms and transparency on AI training practices. Disney raised concerns that Midjourney may have trained on their films, and there are a growing number of lawsuits against AI companies suspected of training on data without consent.

Scams

A former colleague of mine recently reached out to me about his investment in copying my crypto trading on another platform. He said he messaged me about it a few weeks earlier, but he hadn't messaged me, he had messaged an AI bot set up to impersonate me.This was later made clear when he expressed concern to the bot about how it was acting. The AI bot responded:‘When you say “this doesn’t sound like you” what specifically feels off to you? Tone, wording, pace , I genuinely want to align with how you prefer me to communicate. ’The bot likely trained on my eToro and social media posts, and is the first time I’ve seen AI used as part of scammers attempts to impersonate me.- Please note - I ONLY use eToro for any kind of copytrading! Please always take care and conduct due diligence investing online. -There are also an increasing number of scams now that involve spoofing your phone number then using an AI generated voice to impersonate you to your friends and family members, with the goal of extracting money from you. There is now a tangible risk associated with having a broad online presence, because scammers can use that data to train AI to impersonate you.

There are more use-cases beyond this too, AI can be used to narrow down where you live, your income level, your work schedule, hobbies, social network, etc, which can then be used to plan robberies or more elaborate targeted scams.

Final Thoughts

Despite some undeniable advantages of AI already being realized, there are real tangible downsides emerging that are causing real harm to people. If those same people are not seeing benefits of AI directly for themselves, it’s likely they will start to dislike and distrust AI and could support politicians and policies to further restrict or regulate AI. Personally, I think some additional restrictions and regulations could be useful, but AI enthusiasts and tech leaders argue this will slow innovation. If there is a tangible movement against AI, we could see valuations for AI companies and adjacent businesses correct sharply downwards. As an ethical investor, AI is now a meaningful component in my ethical vetting process. Like most new technologies, it can be used for good and for bad, different people, governments and companies all see the balancing point in different places. I’d love to see some lively debate and discussion about the pros and cons of it in the comments, please share your thoughts and experiences. December’s Monthly Portfolio update, my Quarterly Performance Report, and a 2025 Year in Review post are all in the works, so stay tuned.As always, thanks for copying/following, I hope you had a great Christmas and New Year!