Texas Energy Report NewsClips
Thursday February 5, 2026
Asterisk (*) denotes news stories that may be inaccessible because portions are behind a paywall
Good morning! Here are today’s Texas Energy Report NewsClips
Oil prices fell on Thursday after Washington and Tehran agreed to hold talks in Oman on Friday, even as differences persist over the scope of the discussions.
U.S. crude oil was down over 2% at $63.8 a barrel in Asia trading (11.34 p.m. ET Wednesday).
Global benchmark Brent also fell 2.04% to $68.04 a barrel.
Iran is seeking to focus talks on its longstanding nuclear dispute with Western powers, while the United States wants the agenda to also cover Tehran’s ballistic missile program, its alleged backing of armed groups across the Middle East, and its domestic human rights record.
On Wednesday, U.S. President Donald Trump said Iran’s Supreme Leader Ayatollah Ali Khamenei “should be very worried,” sending oil about 3% higher.
Trump had warned last month that he could order strikes on Iran if Tehran fails to agree to a deal around its nuclear program. He had also threatened to intervene in support of protesters who have been raising voices against the Islamic Republic.
Analysts cautioned that markets may be over-interpreting diplomatic signals that could quickly reverse.
Top Stories
Texas Monthly – February 3, 2026
The Far-Right Billionaire Who Bankrolled Ken Paxton Has Abandoned Him*
Related: How Taylor Rehmet upset a MAGA candidate to flip a North Texas Senate district — Salon
Since the beginning of his lengthy and oft-scandaled political career, Attorney General Ken Paxton has held one of the most valuable get-out-of-jail-free cards in Texas politics: the seemingly limitless support of Midland oil tycoon Tim Dunn. Whenever Paxton got into trouble, which was frequently, Dunn would be there to bail him out. In turn, when Dunn’s political operation went to war against the Texas Ethics Commission, Paxton, in his capacity as attorney general, refused to defend the agency. For nearly two decades, the Dunn–Paxton partnership seemed unshakeable. But a funny thing has happened in Ken Paxton’s run for the Republican nomination for U.S. Senate. Tim Dunn has disappeared.
Dunn and Paxton both made their first big splashes in Texas politics in the same year, 2002, with similar objectives. Dunn, who would soon become the most influential and ruthless political donor in the state, wrote his first substantial political check that year—a $10,000 donation to Free Enterprise PAC, a group that sought to advocate right-wing causes at the Texas Legislature, among them prohibiting “homosexual marriages and adoptions” and requiring “a super majority to increase taxes.” Paxton, a first-time candidate for state representative who closely aligned himself with the religious right, was Free Enterprise PAC’s biggest single beneficiary in that year’s legislative elections. …
But according to multiple sources I spoke with while reporting my recent Texas Monthly feature on the primary battle between Paxton and incumbent U.S. Senator John Cornyn, when Paxton approached Dunn about backing his Senate challenge, Dunn told him to stay out of the race. One source who is familiar with Dunn’s thinking told me, “Tim sat down and told Ken, ‘I don’t want you to be a senator; I want you to be a good attorney general.’” Dunn apparently saw Paxton’s challenge as a costly and unnecessary drain on resources that would weaken the party for the general election. (The billionaire, who seems to relish conservative internecine feuds and a good Republican primary throwdown, apparently likes Cornyn enough that, so far at least, he hasn’t seen a reason to spend heavily to oust him.)
After Paxton refused to back down, Dunn wasn’t pleased, according to the source. “When you look Tim Dunn in the eye and say, ‘Sorry, I’m doing it anyway,’ that doesn’t go all that well with him,” they said. (Dunn did not respond to requests for comment. A spokesman for Paxton wrote, “You must be crazy if you think that myself or the Paxton campaign would respond to anything asked by a tabloid rag like the Texas Monthly.”)
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KTBC – February 4, 2026
Judge blocks Texas law prohibiting state investment in anti-fossil fuel companies
A Texas law requiring state entities to sever ties with financial companies that “boycott fossil fuels” has been blocked by a district judge. The judge decided Senate Bill 13, which prompted an $8.5 billion hit to BlackRock, violates two amendments to the U.S. Constitution.
U.S. District Judge Alan D. Albright ordered Tuesday that the State of Texas is enjoined from implementing and enforcing SB 13, which blocked state contracts with companies that were believed to be harmful to the fossil fuel industry. Albright found that the law violates the 1st and 14th Amendments, saying the law was overly broad, unconstitutionally vague, and enables arbitrary and discriminatory enforcement.
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The Wall Street Journal – February 4, 2026
The Dell Scion Who Wants to Shore Up the Texas Power Grid*
Zach Dell aims to shore up the Texas power grid with an army of batteries installed one home at a time. The 29-year-old is the son of billionaire computer pioneer Michael Dell and the co-founder and chief executive of Base Power, a home-battery company that says it is adding over 50 customers a day in markets including Austin, Dallas-Fort Worth and Houston. Base Power has raised more than $1.3 billion from investors as battery storage is booming and grid-reliability issues are sending homeowners in frantic search of backup power.
Utility customers across the country increasingly face less reliable service from a combination of severe weather and an aging electricity system, while federal regulators have warned that power demand is outpacing infrastructure development. In states like Texas, both hurricanes and winter storms can cause disruptions. Base Power describes itself as a subscription service. The company owns the batteries and acts as a retail power provider for its customers, offering what it promises will be a lower-than-average rate. If the lights go out, the batteries will power a home for a day or two, depending on the size of the installation.
In the meantime, Base Power bundles the scattered residential batteries and plays power trader, acting as a single power plant. The company has more than 10,000 customers and about 200 megawatt-hours of installed capacity so far. The Austin-based company hopes to expand beyond Texas. “When the grid’s up and running, we use the battery to support the grid,” Dell said. “When the grid goes down, you get the battery back.” Homeowners pay $695 to install one unit, plus a $19 monthly subscription fee, in addition to their electricity bill that is based on usage. Its current energy rate is 8.5-cents per kilowatt-hour, which rises to around 14.3 to 14.5 cents after adding utility transmission-and-distribution costs. Texas residential rates averaged 16 cents in November, according to government data.
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KDFW – February 4, 2026
ERCOT ranked D- for Texas power grid planning, among nation’s worst according to report
The Electric Reliability Council of Texas (ERCOT), which manages power for about 90% of the state’s electric load, received a D- grade in 2025, according to a Feb. 2025 transmission planning report by Grid Strategies and the nonprofit advocacy group Americans for a Clean Energy Grid. Texas’ D- grade for its electric transmission planning and development, ranks among the lowest-performing regions in the country as electricity demand from data centers, industry and population growth accelerates.
The grade reflects weaknesses across multiple categories, particularly Texas’ lack of interregional transmission planning and limited long-term, scenario-based grid planning, the report said. This is because Texas operates its own electric grid through ERCOT, which connects more than 54,000 miles of transmission lines and over 1,200 generation units, but is largely isolated from the rest of the U.S. power system.
The Latest TERse Tips
Oil refiners on the U.S. Gulf Coast are struggling to absorb a rapid surge in Venezuelan crude shipments since last month’s flagship $2 billion supply deal between Caracas and Washington, pressuring prices and leaving some volumes unsold, according to traders and shipping data — Reuters
US Crude Oil Inventories Take Big Hits In Storm Aftermath — Oil Price
Meta announced that it has signed a Power Purchase Agreement with Madrid-based Zelestra for the production of 176 MW of energy from a new solar project in Texas — ESG Today
Energy developer Aypa Power, a Blackstone portfolio company that operates utility-scale energy storage and hybrid renewable energy projects, announced the closing of its $1.5-billion construction warehouse revolving credit facility, with an additional $0.5 billion accordion feature — Power Magazine
Case Summary: Shannon Wind Chapter 11 — Shannon Wind has filed for Chapter 11 bankruptcy to pursue a Section 363 sale of its 204 MW wind farm in Clay County, north Texas, driven by legacy hedge liabilities stemming from Winter Storm Uri — Bondoro
Howard Energy Partners today announced that its chief executive officer, Mike Howard has been appointed to the National Petroleum Council (NPC) by Secretary of Energy Chris Wright — Morningstar
Baker Botts has added Cody Carper as a partner in its Houston office, where he will serve as co-chair of the Oil and Gas practice — see the press release
MPLX LP Reports Fourth-Quarter and Full-Year 2025 Results — see the press release
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Oil & Gas Texas
CNBC – February 4, 2026
Chevron has signed a memorandum of understanding, or an initial agreement, with the Syrian Petroleum Company and the Qatari firm UCC Holding to evaluate the exploration for oil and gas offshore Syria, a spokesperson for the U.S. major said on Wednesday. Syria’s coast in the eastern Mediterranean lies between major gas discoveries in Israel and Egypt.
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February 4, 2026
Hawk Dunlap is not a politician. He’s an outsider, a renegade, a veteran West Texas oil and gas man looking to shake things up in the Texas Railroad Commission. Republicans eager to address a multi-billion-dollar burden on Texas taxpayers — not to mention an urgent threat to natural resources and public health — should give him their vote in the March 3 primary. The Railroad Commission — the misnamed agency that actually oversees Texas’ oil and gas industry — estimates there are more than 11,000 abandoned oil and gas wells in Texas. After passing through a series of transfers to various companies as production wanes, these so-called “orphan wells” become the property and financial burden of the state by default. When not plugged properly, they often leak harmful pollutants, threatening livestock, ranchland, farmland, groundwater and air quality. …
In our view, Railroad Commissioner Jim Wright, a Republican up for reelection this year, has not shown sufficient independence from the industry he regulates. The revamped waste management rules Wright introduced not long after taking office in 2021 were written by industry executives and consultants. Wright owns stock in several hazardous waste companies in Texas.
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San Antonio Express-News – FEbruary 4, 2026
Texas law barring state investment in firms boycotting fossil fuels declared unconstitutional*
A federal district judge on Wednesday declared a 2021 law restricting state investments in companies boycotting the fossil fuel industry unconstitutional, calling it “facially overbroad” and citing free speech and due process concerns. Legislators passed Senate Bill 13 as a way of discouraging divestment from oil and gas companies, as financial figureheads at the time had signaled they intended to make climate change initiatives a larger factor in their investment considerations. The law requires the comptroller’s office to maintain a list of financial firms that refuse, terminate or penalize business with a fossil fuel company “without ordinary business purpose.” SB13 is commonly referred to as an “anti-ESG” law, which stands for “environmental, social and governance.”
U.S. District Judge Alan Albright delivered the summary judgment, and affirmed in the 12-page order that the way SB13 determined what constituted boycotting a company was too broad and undermined First Amendment free speech protections of the firms affected. The ruling also cited 14th Amendment due process concerns. “SB 13’s ‘boycotting’ definition is comprised of three clauses, all of which are undefined and not susceptible to objective measurement or determination,” Albright wrote in the ruling. Albright also wrote that the law already had led to “discriminatory enforcement” of its provisions. After SB13 was passed, huge state investment funds, including the Teacher Retirement System of Texas and the Texas Permanent School Fund, divested billions from firms.
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Politico – February 4, 2026
Exxon Mobil renews calls for plastics-to-fuel recycling support*
Exxon Mobil is re-upping the pressure on lawmakers and EPA to adopt friendlier policies regulating “advanced” or “chemical” recycling facilities. The petrochemical powerhouse announced Monday its third advanced recycling plant in Baytown, Texas, was operational and increasing its capacity to eventually transform up to 250 million pounds annually of hard-to-recycle plastics back into their molecular building blocks.
“What’s essential now is supportive policy frameworks — clear, consistent laws and regulations that recognize advanced recycling as a proven solution for hard-to-recycle plastics,” the news release says. EPA Administrator Lee Zeldin toured the Baytown complex in September and commended the “limitless future potential.” Exxon is calling for “federal legislation that would officially recognize advanced recycling as recycling, [to] establish clear standards for recycled content claims, and ensure alignment across federal agencies, providing clarity for both industry and consumers,” according to the release. Chemical recycling, which proponents have rebranded as advanced recycling, is an umbrella term for a suite of technologies that break down plastics for reuse. Exxon uses pyrolysis, the most common technology in the family, which applies high temperatures to plastics to create a substance often used as a fuel additive.
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Offshore Energy – February 4, 2026
$11 billion US Gulf Coast project brokers 20-year LNG and gas deals with Mercuria
Commonwealth LNG has signed an LNG sale and purchase agreement (LNG SPA) with Mercuria Energy Trading to provide 1 million tonnes per annum (mtpa) of LNG for 20 years from the Commonwealth LNG export facility in Cameron, Louisiana and a gas supply agreement (GSA) with Mercuria Americas, together with Mercuria Trading, for the supply of a corresponding quantity of natural gas to Commonwealth.
Commenting on these deals, Brian Falik, President of Mercuria Americas, underlined: “This agreement reflects Mercuria’s commitment to securing long-term, reliable LNG supply from high-quality U.S. projects. Commonwealth LNG’s integrated approach, strong resource backing and focus on responsible, low-emission production align well with our strategy to serve global customers with dependable and competitively priced energy. We are pleased to partner with Commonwealth and Caturus as they advance a project that will play an important role in meeting growing international demand for LNG.”
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Energy Intelligence – February 3, 2026
Devon’s Coterra Takeover Creates New US Superindependent
US-energy-focused investment firm Kimmeridge, which has pushed for Coterra to reduce its reliance on gas, welcomed the deal. “As a significant shareholder in both companies, we are supportive of a combination that can unlock meaningful shareholder value. We continue to believe that will require portfolio rationalization and a renewed focus on the Delaware basin,” Mark Viviano, managing partner at Kimmeridge, said in a Feb. 2 statement. After the deal completes, the new-look Devon will also rank among the most efficient operators in the Delaware subbasin, running 20 rigs — closing in on EOG and Permian Resources’ combined 26 rigs — with estimated drilling costs of $782 per foot at Coterra and $717/foot at Devon.
JPMorgan recently ranked Devon fourth among 14 Delaware operators on productivity metrics, behind Exxon, Chevron and Oxy and ahead of Continental Resources and Coterra. Analysts estimate that across the entire Delaware subbasin, there are about 52,000 drilling locations that are technically drillable, economic under certain price assumptions or not yet drilled for other reasons. The bigger Devon will control roughly 13% of those 52,000 locations, with about 27% of the sites having an adjusted breakeven at the wellhead of $40 per barrel or less. Devon claims this represents the largest inventory of sub-$40 drilling locations in the industry, providing it with more than 10 years of high-quality drilling opportunities. At an average breakeven of $46.80/bbl, Mizuho estimates an average drilling inventory life for post-deal Devon of approximately 21 years.
Oil & Gas National & International
The Wall Street Journal – February 4, 2026
The $100 Billion Bet on Venezuelan Oil Relies on a Broken State Company*
During President Trump’s first term, his administration asserted that executives at Venezuela’s state-owned oil company, Petróleos de Venezuela SA, embezzled billions of dollars and used company aircraft to traffic in cocaine. Now it wants U.S. companies to go into business with the Venezuelan giant. The Trump administration is counting on foreign entities working with the Venezuelan state oil company to fuel what the American president hopes will be a $100 billion investment boom in the South American country’s energy industry. That is setting up a legal minefield for investors that have to go through PdVSA (pronounced peh-deh-VEH-sah) to tap Venezuela’s vast oil wealth.
“If a company is going to want to do business in Venezuela, it’s going to have to speak with PdVSA,” said Oswaldo Felizzola, head of the energy center at the IESA business school in Caracas. The country is said to have the world’s largest proven reserves of crude and once produced 3 million barrels a day, ranking it among the world’s oil giants. That production dropped to 300,000 a day at its lowest point under Venezuelan leader Nicolás Maduro and is now about 900,000 a day.
Since the U.S. captured Maduro on Jan. 3, the Venezuelan regime changed its oil-industry law, breaking sharply with a quarter-century of Chavismo, the movement started under Maduro’s predecessor, Hugo Chávez, who advocated “oil sovereignty” with stringent state control through PdVSA. Soon after the oil-industry law was changed last month, the U.S. Treasury Department eased sanctions on PdVSA, issuing a general license allowing American companies to export and sell Venezuelan crude.
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Reuters – February 4, 2026
Equinor sold about 30% of its US gas on spot market during January price spike*
Norway’s Equinor sold around 30% of volumes from its U.S. onshore natural gas assets on a spot basis in January, capitalising on a cold snap that sharply lifted demand and prices, its chief financial officer said on Wednesday. Equinor owns stakes in onshore gas production in the U.S., with the Marcellus position in the Appalachian Basin on the U.S. northeast coast its largest natural gas asset outside Norway.
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S&P Global Platts – February 4, 2026
Trafigura CEO ‘not particularly concerned’ about Europe’s reliance on US LNG
The head of Trafigura said he is not worried about Europe’s growing dependence on US LNG because of buyers’ flexibility to source from elsewhere, if needed. “I’m not particularly concerned about that issue of overreliance on the US,” Richard Holtum told the LNG2026 conference in Doha Feb. 4. Holtum stressed that contracts with US LNG producers are typically on an FOB basis, so “you can take it anywhere.”
“It is not, I would say, that Europe is dependent on US LNG,” Holtum said. “It’s that Europe is dependent on LNG, and today the most efficient supplier is the US.” If needed, the continent could secure cargoes from other producers, supported by the array of import facilities developed in the wake of Russia’s invasion of Ukraine, he said.
Utilities, Electricity & Renewables
Utility Dive – February 4, 2026
Tesla sets battery storage deployment record in Q4 as EV sales slump
Booming demand for energy storage propelled Tesla’s stationary battery deployments to a fresh record in the fourth quarter of 2025 as its electric vehicle deliveries slowed sharply, the company said on Wednesday. Two Korean battery manufacturers, LG Energy Solution and Samsung SDI, also reported strong stationary storage demand last quarter and said they expected more of the same in 2026. Both said their energy storage businesses helped offset slowing North American EV demand.
The Korean manufacturers said U.S. tax credits for battery manufacturing and deployment would drive business in the coming quarters. Tesla executives also said its energy storage business would expand despite ongoing uncertainty around U.S. tariff policy.
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Bloomberg – February 4, 2026
Texas Grid Shows How Batteries Can Help Avoid Winter Blackouts*
Last month’s sprawling winter storm from Texas to New England was one of the first multi-grid tests in the US for big batteries. They passed. Texas in particular benefited from energy storage, which helped cushion the state’s grid during the storm. Texas has nearly 17 gigawatts of installed battery capacity now, up from less than 0.5 gigawatts in 2021, according to data from Electric Reliability Council of Texas, the state grid operator, and Wood Mackenzie. The state is expected to hit 25 gigawatts in 2029, per an annual assessment released last month by the North American Electric Reliability Corporation.
“The batteries were the savior this time,” said Barbara Clemenhagen, executive director of the Gulf Coast Power Association and energy consultant, adding that they likely could’ve helped Texas avoid the severe blackouts it experienced when a days-long freeze paralyzed the grid in early 2021. Grid operators are racing to fortify aging grids strained by extreme weather and surging power demand from data centers, new factories and electric cars. The Trump administration is keen to keep old coal-fired plants alive and build new natural gas and nuclear plants. Renewable advocates, meanwhile, say solar farms are cheap and quick to build.
Batteries are also seen as a key tool — they help minimize the intermittency of wind and solar power and can provide short bursts of energy when demand is peaking, especially when gas plants or wind farms are sidelined during intense storms. Batteries are often paired with solar generation and are increasingly being installed next to gas plants, according to battery developer Elevate Renewables. Storage is more common in Texas than New England today.
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Bloomberg – February 4, 2026
Ex-Tesla Energy Chief Raises $230 Million for Battery Startup*
Tesla Inc.’s former energy chief has secured more than $230 million to expand his battery startup into new markets. It’s the latest sign that the multibillion-dollar US home energy storage market is heating up as strain on the grid increases. California-based Lunar Energy develops software that helps optimize home batteries to charge when electricity is cheap and send stored energy back to the grid when demand is high. It also began deploying its own batteries by working with distributors last year. The firm has about 2,000 installations across California, said Kunal Girotra, who left Tesla to found Lunar about six years ago.
The new funding includes a $102 million Series D round led by B Capital and Prelude Ventures, as well as a previously unannounced $130 million Series C round. Lunar will use it to expand battery sales in new markets, such as Texas, Puerto Rico and Hawaii. Girotra said his startup is close to being valued at $1 billion, though he declined to provide specific details. The US added nearly 4.9 gigawatt-hours of home energy storage in 2025, up almost 60% from the prior year, according to an estimate by BloombergNEF. That can help homes keep the lights on during extreme weather and help utilities improve grid management while avoiding firing up so-called natural gas peaker plants during periods of high demand.
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Real Clear Energy – February 4, 2026
Concerns around water use, air quality and environmental impact are often misunderstood. Modern data centers are increasingly designed to rely on reclaimed or non-potable water for cooling, significantly reducing overall water intensity. Air quality is also a key consideration, particularly in non-attainment areas such as the Dallas Fort Worth region. Many new facilities are evaluating alternative cooling technologies, including air-based systems, that limit emissions and protect existing air quality standards. When thoughtfully sited, data centers can also minimize noise and light impacts, support stormwater management, and coexist responsibly with surrounding land use.
North Texas is growing quickly, and meeting the demands of that growth will require more than incremental fixes. Regional leaders, from mayors to county officials, consistently point to the importance of having industrial partners capable of supporting long-term infrastructure investment. Data centers have proven they can play this role by modernizing essential systems while driving economic development in the communities that host them. Texas does not need to choose between growth and reliability, or between economic development and affordability. With thoughtful planning and strong public-private collaboration, data centers can help deliver all four. North Texas is already showing what that future can look like and providing a blueprint for how the rest of the state can prepare for the growth ahead.
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The Wall Street Journal – February 4, 2026
Google Is Spending Big to Build a Lead in the AI Energy Race*
Google plans to spend $4.75 billion to help solve a problem stymieing the AI race: finding enough electricity to run an ever-larger fleet of data centers. The company’s pending deal to buy Intersect, a wind and solar developer, would make it the only tech giant to own a power company. That could give it a significant advantage over rivals as power officials favor tech companies prepared to bring their own electricity sources online and the Trump administration presses them to avoid passing on power costs to consumers.
The deal is the latest in a series of bets Google has made to develop a soup-to-nuts strategy for accessing vast amounts of power. Among its competitors, Google was first to strike deals to develop advanced nuclear and geothermal plants designed to operate constantly. It was first to experiment with how it can reduce data-center power use during times of strain on the grid. And with the acquisition of Intersect, Alphabet will be the first to incorporate within its business the means to build its own electricity sources for Google data centers.
“The energy system, I would say, globally, is no longer fit for purpose, for serving the demands of AI,” said Amanda Peterson Corio, Google’s global head of data-center energy. “What we’re trying to do is really think proactively.” The acquisition has the potential to help Google better navigate the challenging process of bringing data centers online as regulators and legislators increasingly worry about electricity supply shortages. Tech companies are seeking to build data centers far more quickly than new power plants can be built to serve them.
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Utility Dive – January 28, 2026
Prime Data Centers uses closed-loop air and liquid cooling to earn Energy Star certifications
Two computing facilities operated by Prime Data Centers have earned the U.S. Environmental Protection Agency’s Energy Star certification, placing them in the top 25% of U.S. buildings for energy efficiency, the Texas-based technology infrastructure company said this month. Located in Dallas and Sacramento, the facilities “emphasize efficiency-driven design, advanced monitoring and benchmarking, and operational best practices intended to reduce energy consumption without compromising uptime or performance,” Prime said in a news release.
High-performance computing facilities face growing scrutiny from elected officials, planning councils, environmental groups and consumer advocates over their impact on water resources, energy costs and the natural environment. Responding to local pushback, developers abandoned 25 major U.S. data center projects in 2025, quadruple 2024’s figure, according to a Heatmap Pro analysis released this month.
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Utility Dive – January 28, 2026
How utilities can prepare for the next wave of data center growth: Tim King, Nexans North America
The speed of datacenter deployment has shocked the world. Recent reporting shows a potential underestimation of datacenter proliferation. The 54-volt in-rack power distribution systems supporting current growth were designed for kilowatts, not megawatts. Nvidia and partners including Schneider, ABB and Eaton are addressing this by developing 800-volt DC sidecars to deliver energy for next-generation data centers, but power demands show no sign of slowing.
According to Moore’s law, the number of transistors on an integrated circuit doubles approximately every two years. For years, power draws declined under Dennard scaling: power density stayed constant as transistors shrank. That relationship has broken down and as transistor counts increase, total chip power consumption continues to rise.
Regulatory
The Wall Street Journal – February 4, 2026
Is AI the Next Climate Change?: Barton Swaim*
“People should stop training radiologists now. It’s just completely obvious that within five years, deep learning is going to do better than radiologists.” So pronounced the cognitive scientist Geoffrey Hinton, colloquially known as the Godfather of AI, a decade ago. He was awarded the Nobel Prize in Physics in 2024 for his work in artificial intelligence. Mr. Hinton thought AI would make radiologists useless. They have since grown in number, demand and income. Mr. Hinton’s claim was among the earliest that AI would make a whole class of human practitioners redundant. Others have come at regular intervals since. In 2023 a Goldman Sachs study concluded that “roughly two-thirds” of U.S. jobs are “exposed to some degree of automation by AI” and that most of those “have a significant—but partial—share of their workload (25%-50%) that can be replaced.” Hedged language aside, that sounds like a lot of people on the unemployment rolls.
Studies like Goldman’s have generally shown more nuance than media reports and political pronouncements on supposed AI job loss. “Amazon axes 16,000 jobs as it pushes AI and efficiency,” Reuters announced last week. Politicians of a progressive bent do their best to dramatize the threat. AI and automation “could replace nearly 100 million jobs over the next ten years, including 89% of fast food and counter workers, 64% of accountants and 47% of truck drivers,” says a report by Democratic members of the Senate Health, Education, Labor and Pensions Committee. Last year Anthropic CEO Dario Amodei predicted that AI could displace about half of all entry-level white-collar jobs over the next five years, even as it drives productivity and growth to new heights. He reiterated that prognosis last week in a 20,000-word essay. Much of what he writes in this piece—on the dangers of crazy people and rogue regimes accessing powerful AI tools, and on the ill-advisability of selling semiconductors to China—is perceptive and interesting. His predictions about AI and the labor market, less so.
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