AI Infrastructure Investment: The Difference Between Skepticism and Self-Limitation

By Tony Grayson Tech Executive (ex-SVP Oracle, AWS, Meta) & Former Nuclear Submarine Commander

The $7.5 Billion Mirage: The Kemper Project looked like a breakthrough during construction. It ended as a demolition site. This is what happens when timelines take priority over thermodynamics.

I’ve been called a pessimist lately.

I look at the current surge of AI infrastructure investment (specifically the $100 billion data center announcements), and I don’t just see progress; I see grid congestion.

I look at the financing models, and I see 1999 all over again. I look at the "infinite scale" roadmap,s and I see physics getting ready to snap back.

If you’re reading this and thinking I’m anti-AI, you’re missing the point.

I’m not a pessimist. I’m a safety engineer.

I spent my early career inside a steel tube with a nuclear reactor behind my bunk. When you command a submarine, "optimism" gets people killed. You don’t survive by hoping the math works out. You survive by being ruthlessly honest about what the machine can actually do versus what you want it to do.

That didn’t make me cautious. It allowed us to push reactors to their absolute limit in hostile environments, because we knew exactly where the edge was.

The Kemper Trap: Why Physics Matters in AI Infrastructure Investment

There’s a difference between ambition and delusion. One gets you the Apollo Program. The other gets you The Kemper Project.

Kemper was a $7.5 billion "clean coal" mega-project that collapsed because executives ignored the engineers. The leadership pushed a chemical process that worked in the lab but became unstable at commercial pressure. They ignored the thermodynamics to save the timeline, and seven years later, the plant was demolished—a monument to wishful thinking.

Right now, too many AI infrastructure investment strategies are Kemper Projects in waiting. They assume that if you pile enough cash into a server farm, the laws of physics will politely step aside.

They won't.

How to Spot the Real Deal (3 Tests for AI Leaders)

When I push back on these narratives, I’m not telling you to think smaller. I’m telling you to think sharper.

When I look at a project (whether it's at Northstar, or back in my days at Oracle and AWS) I look for three things:

1. Do they respect the heat?

If a roadmap assumes a miracle in cooling or transmission by Q3, it’s not a plan. It’s a gamble. Thermodynamics is the only law you can't lobby against.

2. Do the unit economics close?

If it costs you $1.00 in compute and power to generate $0.80 of revenue, scale is not your friend. You aren't growing a business; you're just magnifying your losses.

3. What's the failure mode?

"Happy path" engineering is easy. I want to know what happens when the grid fluctuates or the supply chain breaks. Real resilience is built for the bad days, not the demo days.

Let's Build Real Things in our AI Infrastructure Investment

I’ve heard "that’s impossible" my whole career.

I heard it when we talked about running nuclear reactors quietly enough to avoid detection by sonar. I heard it when we started deploying modular data centers in days instead of months.

But there is a difference between people who say "that's impossible" because they lack imagination, and engineers who say "that won't work" because they've done the math.

Ignore the first group. Listen to the second.

We need more moonshots. We need massive clusters. We need to guide AI infrastructure investment toward projects that can actually survive contact with reality.

But we need to do it on solid ground, not on a bubble of cheap money and bad math.

Dream without limits. Build with discipline.

That isn't pessimism. That's the only way we actually get to the future.

See you out there,

Tony Grayson

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Tony Grayson is a recognized Top 10 Data Center Influencer, a successful entrepreneur, and the President & General Manager of Northstar Enterprise + Defense.

A former U.S. Navy Submarine Commander and recipient of the prestigious VADM Stockdale Award, Tony is a leading authority on the convergence of nuclear energy, AI infrastructure, and national defense. His career is defined by building at scale: he led global infrastructure strategy as a Senior Vice President for AWS, Meta, and Oracle before founding and selling a top-10 modular data center company.

Today, he leads strategy and execution for critical defense programs and AI infrastructure, building AI factories and cloud regions that survive contact with reality.

Read more at: tonygraysonvet.com