Dilution is preferable to paying cash taxes on unrealized gains - the other socialist/progressive "solution" to people being successful. And, one would hope that negotiations would get things closer to a reasonable percentage from 50%, like the 10% the US government took in Intel.

It aligns the interests of the government with the company - you can't pay dividends on a wealth fund based on equity stakes if you take actions (policy or otherwise) that tank the value of the stock.

If anything, having the government as a partner (preferably a silent one) can help boost the stock price. If those shares aren't trading, then they aren't impacting daily price discovery. The only impact is that if the company ever pays dividends, half of the dividends go to uncle sam.

I'm not a proponent of nationalizing companies, but for AI companies to hit max velocity for spend, they need every advantage they can get to clear red tape and public opposition out of the way.

From an October 15th Pew Research report:

https://www.pewresearch.org/gl...

"But many are worried about AIâ(TM)s effects on daily life. A median of 34% of adults say they are more concerned than excited about the increased use of AI, while 42% are equally concerned and excited. A median of 16% are more excited than concerned.

Concerns about AI are especially common in the United States, Italy, Australia, Brazil and Greece, where about half of adults say they are more concerned than excited. But as few as 16% in South Korea are mainly concerned about the prospect of AI in their lives."

Contrast this to Biden era view on AI - which was to legislate regulations and restrictions on development which most likely would have been only to the benefit of the largest players. Open source players in this space would remain unaffected, since the metric is 200M in sales.

That Bernie and Trump are talking similar language (US government taking a stake in AI companies) makes this at least a starting point in discussions. People talking about UBI without proposing a mechanism for financing UBI - this is one possible way of financing things.

Nevermind, I was reading the Ars Technica version of the article that leaves out the part where they take stock instead of cash under the 50% haircut, and are proposing to pay dividends based on that fund.

Strangely enough, I don't have any objections to this plan.

Either:

1. AI is a scam, in which case Bernie is proposing they rob the robbers before the public figures out that they're getting taken. Definitely a heist film.

2. AI is the real deal, in which case Bernie is skimming 50% off the top as part of their deal to let AI have their way with the American economy. Notice he's not promising that he won't came back later to take another 50% haircut.

I'm a little weirded out by the fact that you could also just take an non-voting equity stake in these companies, considering that their spending is powering the US economy. Yes, nationalization is bad, but getting in before the IPO sounds like a really smart idea if your goal is to maximize return the US taxpayer.

You got it in one.

Private enterprise wants to come in and upgrade your infrastructure without you having to float bonds, and somehow this is a bad thing.

This reminds me of when the company that built the monorai for Disney offered to put in monorails for the County of Los Angeles at their cost - the funds to be later recouped in fares (five cents per head at the time.)

https://en.wikipedia.org/wiki/...

"In 1963, Alweg submitted a proposal to the Los Angeles County Board of Supervisors for a privately funded monorail system in the county. The plan included design, construction, and operation of the system at Alweg's financial risk, with construction costs to be recouped through fare revenue. The proposal was ultimately rejected. Some sources attribute the decision to opposition from automotive and petroleum industry interests, including Standard Oil of California and General Motors.[4][5] Author Ray Bradbury, a supporter of the proposal, later criticized the city's decision to develop a subway system instead.[6][7]"

There are legit criticisms, like datacenters not behaving like good baseload consumers (many system designs will to switch to internal power if grid power goes out of spec, causing grid fluctuations to get much worse), but these can be handled by mandating that they build mechanisms (like batteries) to take over base load during situations like that.

You have to wonder who is behind shit like this. Is it organic mass hysteria (possibly driven by algorithmic influence), or is it manufactured outrage in service of some hidden goal (aka some billionare *cough* *cough* *michael bloomberg*, or a state actor)?

They specifically outlined the trojan horse rationale for denying public contributions. Someone plays the long game by submitting patches and gets privileged access to the project and repository, then turns around and backdoors it on the behalf of a state actor.

Example:

https://www.atlanticcouncil.or...

"The XZ saga began when the original maintainer of XZ Utils was pressured by other contributor accounts into adding user JiaT75 as a maintainer of the project. JiaT75 had been contributing to the XZ Utils community since 2022. A group of accounts and JiaT75 questioned the original maintainerâ(TM)s ability to maintain the XZ Utils project and spent years convincing them to bring JiaT75 on board as an additional maintainer. Once JiaT75 was provided maintainer access, they replaced the original maintainerâ(TM)s contact information with their own on oss-fuzz, a project that scans open source projects for vulnerabilities. After further preparation, they issued commits for XZ Utils versions 5.6.0 and 5.6.1, implementing the backdoor into the code. This backdoor had the potential to infect Linux operating systems, but thanks to the keen eye and curiosity of a Microsoft engineer, it was discovered before causing widespread harm. "

"Christopher Robinson (he/him/his), Chairperson, OpenSSF Technical Advisory Council; Director of Security Communications, Intel

âoeThe attack itself is not novel; it strings together a series of social engineering/cyber-bullying tactics, and leverages embedding offline malicious files during the CI/CD stage of publication. What is unique is how well the attacker studied and exploited common community behaviors and norms to penetrate the project and take maintainership that could allow the later actions in secret.â "

So I interpret it as closing off one channel for attack, which isn't taking public pull requests, but shutting off public contributions entirely, and limiting the ecosystem to known, trusted entities only.

I suppose as long as they let you fork, someone can always create a derivative that accepts public contributions, and then they can take the risk of dealing with that particular risk.

I can't find the citation for it, but in at least one case, part of the reported allocation of water for datacenters was due to the water consumed during construction. I would consider this kind of consumption legit if called out as a temporary usage of water, but FUD if just assumed as part of the overall calculation of ongoing water demand.

As for creating/destroying water:

https://www.fwpcoa.org/content...

"Air cooling (water-free): Many smaller or older data centers rely on air conditioning and chilled air circulation to remove heat. These use mechanical chillers or heat exchangers and do not consume water for cooling (aside from minimal water for humidification). Air cooling is common in cooler climates or where water is scarce, but it can require more electricity to run compressors or fans.
Evaporative cooling (open-loop): A majority of large, modern data centers use water-based cooling for better energy efficiency. This often involves cooling towers or evaporative chillers: warm water absorbs heat from servers and is then cooled by evaporation in a tower. As water evaporates into the air, it carries away heat â" dramatically cutting the electrical power needed for cooling. The trade-off is high water consumption. Most big data centers today use some form of evaporative cooling because itâ(TM)s energy-efficient, especially in hot climates, but it directly uses water (often drawn from municipal supply).
Closed-loop water cooling: In closed-loop systems, water circulates in sealed pipes or coils that cool the servers without directly exposing water to air. Because the water isnâ(TM)t evaporated to the environment, losses are minimal â" itâ(TM)s mostly the same water recirculating (with some makeup water added occasionally). These systems can include water-cooled heat exchangers or liquid-to-liquid cooling loops. Closed-loop cooling can reduce freshwater use by up to 70% compared to traditional open evaporative methods. The downside is higher cost and complexity, but they are far more water-efficient since water isnâ(TM)t âoeburned offâ into the air."

"However, a growing number of data centers are now shifting to recycled water. Tech giants have begun partnering with utilities to use treated wastewater (effluent) for cooling instead of fresh drinking water. For instance, Google uses reclaimed or non-potable water at over 25% of its data center campuses (one notable example is its Douglas County, Georgia data center, which runs on recycled municipal wastewater). Amazon Web Services (AWS) announced in 2023 that 20 of its data centers are cooling with purified wastewater instead of potable water. After cycling through the cooling system, this water is sent back to the treatment plant to be cleaned and reused again. These initiatives leave more drinking-quality water for the community and exemplify the industryâ(TM)s trend toward âoestrategic water sourcing.â Still, as of today, reclaimed water use is the exception. Most data centers worldwide are still using fresh water for cooling, although this is slowly changing with new projects and local regulations."

So evaporative cooling "destroys" water. And using treated wastewater (pure enough to use for datacenter usage and probably irrigation, but still too ick for some people to drink directly - aka toilet to tap), if part of their investments were to purify even more water than the municipality was already processing, combined with closed loop usage could be considered "creating" water.

Your guess is as good as mine though, it all sounds like marketing hype in an attempt to combat FUD.

Well written code is self-documenting, specifically because once you start putting documentation somewhere else, you start getting a divergence in truth. And I'm not talking about leaving comments in the code - that's also documentation, as anyone who has had to reconcile business processes with code can attest upon discovering that the comments and the code also don't agree with each other. (This is where I try and sell people on having detailed commit messages, and then realize that they're all going to be lost the next time someone advocates for a squash merge...)

Refactoring is how you refresh your knowledge of the code and remove any accumulated cruft. Stuff like "Oh, we meant to do that in the next release, but we've completely removed that functionality, so this stub can go too.", and "Well shit, this algorithm doesn't work the way we thought it did - and the test suite is missing the test that would tell us that it doesn't work for that last 10% of use cases.", and "Uh... this method doesn't only do that one thing anymore, time to refactor and dry things out."

The moment you start relying on "tribal knowledge" to manage your code, you're fucked. Because very soon, as you have turnover (doesn't have to be layoffs - people can get promoted up or sideways, a bunch of people get hired, some people get transferred to special projects and start forgetting the stuff they maintained), the tribal knowledge distills to one thing: "If it isn't broken, don't touch it - you'll break it."

In other words... If your codebase is in decent shape, AI code bots are not a net negative unless people are blindly approving commits. If your codebase is in shitty shape, you're probably already having issues with diverging truth (and inability to scale), and you're fucked either way.

This actually has been a problem for utilities for a long while.

https://freemannews.tulane.edu...

"As more and more homeowners install solar panels, they generate their own electricity and buy less from utility companies. While consumer solar adoption is good for the environment, it reduces the revenue that utilities generate from consumers. To make up for the shortfall, utilities raise electricity prices, which in turn pushes more people to switch to solar, further decreasing demand for utility-provided power. This âoeutility death spiralâ can lead to skyrocketing prices for consumers and financial instability for utility companies."

EVs were supposed to be a lifeline, but that whole push has been sidelined.

The energy company deciding to end service is not the utility directly serving customers:

"NV Energy, the Nevada utility that has supplied the bulk of Lake Tahoeâ(TM)s electricity for decades, told Liberty Utilities â" the small California company that services the region â" that it will stop providing power after May 2027. The reason: NV Energy needs the capacity for data centers being built by Google, Apple, and Microsoft around the Tahoe-Reno Industrial Center east of Reno, according to Fortune."

Liberty Utilities is the electric company. NV Energy is their main supplier. NV Energy found a customer willing to pay more, and is giving Liberty Utilities notice to figure out a different method to make up the shortfall. Is Liberty negligent? Not at all:

https://california.libertyutil...

https://california.libertyutil...

"Liberty is preparing for a planned transition in our supplemental energy supply beginning in 2028, while continuing to provide safe, reliable electric service to our customers. Liberty began this process in 2019 when Liberty filed for the transmission capacity reservations to enable this transition to the market. Liberty cannot access the greater energy market without these transmission rights, and weâ(TM)re excited to receive those rights when NV Energyâ(TM)s Greenlink-West project goes into service, expected December 31, 2027.
Today, we serve customers through a combination of Liberty-owned solar generation and supplemental wholesale power purchased from NV Energy. Our 60 megawatts of locally owned solar generation will continue to play an important role in our long-term energy mix.
Beginning in 2028, NV Energy will no longer serve as our wholesale energy supplier. To prepare for this transition, we are pursuing a competitive process to secure new supplemental energy supply arrangements focused on sustainability, affordability, and reliability. NV Energy will remain our transmission provider and neighbor, and we will continue using the existing transmission system to deliver electricity to our service territory."

The problem is that apparently NV Energy is moving up the deadline from beginning 2028 to May of 2027... effectively giving 1 year notice to Liberty Utilities basically from now.

https://fortune.com/2026/05/12...

"Data centers used 22% of Nevadaâ(TM)s electricity in 2024, and that share could rise to 35% by 2030. In NV Energyâ(TM)s own 2024 resource plan, about 75% of major-project load growth is attributed to data centers, according to Sierra Club expert testimony filed with Nevada regulators and reviewed by Fortune, and most of it is concentrated in Northern Nevadaâ"using the same system that feeds power to Lake Tahoe.

NV Energy is building Greenlink West, a 525-kV, $4.2 billion transmission line from Las Vegas to Yerington, expected online in May 2027. Schwarzrock said Liberty would be âoefirst in the waiting lineâ when Greenlink opens, giving it access to a wider pool of energy providers. But that timeline matches the contract deadline exactly, leaving almost no margin for error. About 70% of the projectâ(TM)s costs will be borne by Southern Nevada customers. "

So basically Liberty was expecting until December 2027 to make the transition, understandably allowing for delays and other transition activities. NV Energy is basically saying - there will be no delays, be prepared for the cutover to happen in May.

I'm not going to call the parent article complete flamebait, because it does highlight the very specific problem that the Tahoe grid has (it doesn't connect to California, but it is regulated by California regulators.) However, it is a far cry from saying that datacenters are going to cause Tahoe to go dark. That's a potential possibility if there are delays but NV Energy decides to cut them off anyway, but it is not a definite likelyhood.

This is just more datacenter FUD.

Or 300M plus interest per year over 5 years.

Not including Federal capital gains taxes on sale of any company shares that he liquidates, or California income taxes, likely at the 14.4% tax bracket.

Or he could try and find a bank to lend him 300M in cash every year, secured against his equity stake. Anyone?

So wait... if I migrate my stuff to the ME datacenters, I won't have to pay? I'm aware that service may not be available or intermittent, and that resources may be lost permanently without warning... but if I'm designing for fault tolerant operations, this seems like a perfect proving ground, and not having to pay during the reconstruction period seems like a bonus...

If you made the mistake of buying into the platform you're faced with a decision:

1. Rationalize your continuing with the platform
2. Tossing the platform and choosing a different platform
3. Giving up on the various platforms as all suspect and doing something else with your life

Substitute platform for anything that you have to invest a non-trivial amount of cognitive focus, time, money, etc. It's not like your abuser is going to show their stripes from the get go - if they did, you would have already moved on.

See Cory Doctorow's thesis on enshittification:

https://en.wikipedia.org/wiki/...

"Doctorow argues that new platforms offer useful products and services at a loss, as a way to gain new users. Once users are locked in, the platform then offers access to the userbase to suppliers at a loss; once suppliers are locked in, the platform shifts surpluses to shareholders.[9] Once the platform is fundamentally focused on the shareholders, and the users and vendors are locked in, the platform no longer has any incentive to maintain quality. Enshittified platforms that act as intermediaries can act as both a monopoly on services and a monopsony on customers, as high switching costs prevent either from leaving even when alternatives technically exist.[7] Doctorow has described the process of enshittification as happening through "twiddling": the continual adjustment of the parameters of the system in search of marginal improvements of profits, without regard to any other goal.[10] Enshittification can be seen as a form of rent-seeking.[7]"

Not everybody on the internet today was around when the Sony rootkit incident happened (over 20 years ago).

For reference for those who want to find out about said rootkit incident:

https://en.wikipedia.org/wiki/...

"n 2005, it was revealed that the implementation of copy protection measures on about 22 million CDs distributed by Sony BMG installed one of two pieces of software that provided a form of digital rights management (DRM) by modifying the operating system to interfere with CD copying. Neither program could easily be uninstalled, and they created vulnerabilities that were exploited by unrelated malware. One of the programs would install and "phone home" with reports on the user's private listening habits, even if the user refused its end-user license agreement (EULA), while the other was not mentioned in the EULA at all. Both programs contained code from several pieces of copylefted free software in an apparent infringement of copyright, and configured the operating system to hide the software's existence, leading to both programs being classified as rootkits. "

This is an interesting question, which probably can only be answered by triggering a natural experiment and having the ultrawealthy (as opposed to the merely well-to-do) [maybe] leave the state.

In the best interests of the side advocating for and against wealth taxes, if California wants to put itself out there for the sake of the answering the question, the rest of the nation should be happy that they're willing to be the guinea pig.

The only caveat is that you need to wait to actually see what the results are in California before attempting to pass/block similar legislation in the rest of the US. Which, in this case, would be about 5 years - the period of time in which the wealth taxes would be collected in California under this proposal.

Man, someone had the knives out for Peter Thiel when they wrote this clause in:

"(7) The following categories of assets shall be exempt from all taxation under this part and also from the reporting requirements of this Section:

(A) Except as described in subparagraph (B), qualified pensions and individual retirement arrangements, including those described by Section 219(g)(5) of the Internal Revenue Code, or foreign pension arrangements similar in nature to those described in that Section and exempted from U.S. taxation by a treaty obligation of the United States;

(B) Amounts held in Roth IRA or other Roth-type retirement arrangements or any substantially similar accounts, except to the extent that the aggregate value in all such accounts in which the taxpayer holds a beneficial interest, either directly or indirectly, exceeds $10 million ($10,000,000) in present value;"

So yeah, tax advantaged accounts are not considered part of your wealth... unless you have more than 10M in your roth account. In which case, they'll gladly consider it as part of the total wealth to evaluate when considering #1 - whether you owe tax, and #2 - how much tax you owe.

If you happen to have more than 1B in assets, and were trying to move money into your Roth (which is a taxable event, btw) to reduce your required minimum distributions, AND it caused your roth to tip over the 10M mark, guess what, it just backfired.

Peter Thiel, in the meantime, already decamped for Florida. For those who don't know why this clause was written, see the ProPublica article, which used stolen IRS data to hang him in effigy:

https://www.propublica.org/art...

https://www.wsj.com/opinion/pe...

This is starting to feel like AB5 when they tried to skewer Uber and Lyft and fucked over freelancers:

https://pacificlegal.org/calif...

And then Uber and Lyft just opened up their wallets and got themselves an exemption.

https://fedsoc.org/scdw/califo...

The prime mover behind that law:

https://thecoastnews.com/comme...

"Exemplifying Sacramentoâ(TM)s incestuous relationship with Big Labor, Gonzalez has since left her District 80 Assembly seat last year to become head of the California Labor Federation.

According to the court, the exemptions, which pick winners and losers, explicitly exclude Uber et al. even though similarly situated app platforms like Wag! and TaskRabbit received exemptions for such workers as dog walkers and yard cleaners.

In trying to defend Gonzalezâ(TM)s poorly drafted law during oral arguments on July 13, 2022, the stateâ(TM)s deputy attorney general withered under questioning from the three-judge panel. It was notable, the court wrote, that counsel for the state was âoeunable to articulate a conceivable rationale for AB 5 that explains the exemptions made by AB 5, as amended.â"

My theory about the cost of housing in California is that a lot of it has to do with pre-loading the cost of the home upfront, in exchange for a guarantee on future property tax increases.

Also, up until the recent prop 19 reversed the previous prop 58/193 laws on passing property tax assessment through inheritance, you were paying up front to guarantee that tax rate and rate of increase to your heirs.

If you think about prop 13 as rent control, it makes sense that the longer you've been in your unit, the more valuable it is... and conversely, if you intend to stay in California a long time, you can amortize the up front cost over a longer period, and reap benefits, especially during high inflation periods.

I haven't actually done the math to see when total cost of ownership breaks even when compared to a cheaper house in a state without a limit on property tax increases. But I suspect that houses being cheap in other states may not only be a function of them being in areas that are undesirable to live in from a lifestyle perspective.