Individual Economists

OpenAI Pauses U.K. Stargate Over "Regulation And Power Costs"

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OpenAI Pauses U.K. Stargate Over "Regulation And Power Costs"

OpenAI's broader Stargate push to build next-generation AI infrastructure in the UK has been put on hold, with the company citing regulatory conditions and high energy costs as major obstacles to long-term investment. That outcome is hardly surprising: Britain, like much of dying Europe, has layered on regulatory burdens, while years of backfiring 'green' energy policies have left power costs structurally elevated. It's a toxic mix for power-hungry AI data center buildouts.

"We see huge potential for the UK's AI future," OpenAI told Bloomberg in an emailed statement earlier today. "AI compute is foundational to that goal — we continue to explore Stargate UK and will move forward when the right conditions, such as regulation and the cost of energy, enable long-term infrastructure investment."

Stargate UK is just one piece of OpenAI's much larger global expansion plan, which involves spending hundreds of billions (up to $500bln) on AI infrastructure to localize and scale AI capabilities.

The pause in Stargate UK signals that growth in AI data center buildouts is colliding with power constraints and regulations in the Western world, as left-wing leaders prioritize de-growth economies with extremist climate policies, while on the other side of the world, China did the complete opposite and boosted baseload capacity on the grid with some of the dirtiest mix of power generation. 

Similar OpenAI projects are underway in Norway and the United Arab Emirates. The core buildout has been in the US, specifically the flagship data center in Abilene, Texas. However, the company abandoned a planned expansion of that data center.

OpenAI's global compute buildout takeaway: 

  • US = scale + policy support

  • Middle East = capital + energy

  • Nordics = cheap power + cooling

  • UK/Europe = constrained by cost + regulation

Last week, Bloomberg reported that nearly half of the US data centers planned for this year were delayed or canceled - not because of memory chip shortages - but instead shortages of electrical equipment, such as transformers, switchgear, and batteries.

Related:

It certainly appears that data center buildouts are running into real-world constraints that could be a negative for AI momentum trades.

Tyler Durden Fri, 04/10/2026 - 04:15

Germany Restricts Emigration To Prevent Young Men From Escaping The Military Draft

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Germany Restricts Emigration To Prevent Young Men From Escaping The Military Draft

Authored by Ryan McMaken via the Mises Institute,

Late last year, German lawmakers passed new legislation paving the way for military conscription. As the Guardian reports, “The change will include the obligatory screening of all 18-year-old men to gauge their suitability to serve in the military from 1 January..” This is not (yet) full-blown conscription, but clearly moves in that direction, providing the German state with a plan to measure and assess the availability of young men who can be used as a resource in coming military conflicts. 

Now, the legislation faces additional opposition because it turns out the law “requires men aged up to 45 to get permission from the armed forces before any significant stay abroad, even in peacetime.” In other words, the law restricts the emigration of young men who might be of some use to the state as cannon fodder. According to The Guardian: 

The fine print, which went largely under the radar until a media report called attention to it this week, says men aged 17 to 45 would have to apply for authorisation to leave Germany for more than three months. ... The clause could potentially affect millions of German citizens embarking on anything from a gap year or study abroad to a new job or sabbatical.

It touched off agitated media coverage in a country where the changes to the military service policy have already led to street protests by school pupils subject to the law’s new requirements.

From restrictions on free speech to attempts to shut down entire political parties, the German state has increasingly showed its affinity for despotism in recent years. Now, by introducing emigration controls, Germany is reverting to an old tactic used by militarist, socialistic European regimes of the past. 

As I showed in a 2018 article on how restriction on emigration are a hallmark of despotic states, mandatory military service has long been used as a justification for regulating those who seek to leave the country:

According to Stanley Johnson, in Emigration from the United Kingdom to North America, 1763-1912, “In Germany, an enactment of 1897 forbade the departure of any citizen who had not completed his military training; it appointed also, a special staff of officials to regulate the emigration agencies.” Also: “The movement in Italy is practically in the hands of the Government, and no one can lawfully depart from trans-Atlantic ports without special permission.” In Italy, as in Hungary, there were only certain government approved “routes by which all migrants are to travel.” In Russia, “permits for crossing the frontier are only granted when all military obligations are at an end.”

Military service was not the only reason for restricting emigration, of course. European states restricted emigration whenever it was thought potential migrants might be fleeced for tax revenue or other riches before being allowed to leave. In Alan Kulikoff’s book From British Peasants to Colonial American Farmers, he states

Dissatisfied German peasants, like those in Britain, could emigrate, but German states, worried about losing population and taxes, put roadblocks in their way. Emigrants had to settle all debts and taxes. Free emigrants had to pay large fees for permission to depart and to take property with them, and serfs - a substantial part of the populace - had to pay manumission fees amounting to 12-25 percent of their property.” 

Many emigrated anyway, often illegally. Indeed, military conscription proved to be a motivation for countless men across many regions from Spain to Germany to the Ottoman Empire, and to Japan. As I note in this article from 2022: 

Some immigrant groups in America, such as the Volga Germans, are practically defined by their avoidance of conscription. Specifically, the Volga Germans in America are descended from Germans who emigrated to Russia in the eighteenth century on the condition that they would not be subject to conscription into the czar’s army. When these exemptions were revoked in the nineteenth century, many Volga Germans emigrated to the United States, where they today constitute a sizable portion of the ethnic German populations of the Dakotas, Nebraska, Kansas, Oregon, and Washington. Anabaptist subgroups of the Volga Germans also fled to America to avoid conscription. Groups such as the Hutterites and the Mennonites were explicitly opposed to military service. ...

Before the Volga Germans, many other Germans had fled the German kingdoms. A large percentage of Germans arrived in Chicago “during the 1830s … to avoid conscription in the army.”

In Spain during the 1860s, unknown numbers of young men fled to avoid military service to the crown, even in spite of the watchful eyes of government agents seeking to prevent emigration. Wayne H. Bowen writes:

Given the poor conditions for troops, conscription was always a challenge for the central government. Many potential soldiers did their best to avoid service, even through leaving Spain. Emigration was a serious problem, as the families of young boys tried to send them to the colonies or encouraged them to emigrate to Latin America or the United States in order to avoid conscription. The Guardia Civil, Spain’s national paramilitary police, had orders to watch the coast and port cities for young men trying to leave, and colonial governors were prohibited from issuing passports to boys who could not prove service or exemption.

Membership in an ethnic minority in Spain likely provided an added impetus to exit, and “evasion of military service was … widespread among Spanish Basques.”

Meanwhile, in Japan, “militarization [in the early twentieth century] and the initiation of the so-called blood tax or national conscription also encouraged many young Japanese males to emigrate to avoid the draft.” Many went to Peru and Brazil.

Although the German state has not yet adopted full conscription, Berlin is clearly up to its old tricks. Of course, the fact that the German state has to take these steps at all shows just unpopular German foreign policy is. After all, if the public were supportive of the state, conscription—or “pre-conscription,” so to speak—would not be necessary. The “need” to impose forced military service on the population is always an illustration of a state lacking legitimacy. Moreover, if a state has to intervene to prevent people from leaving, what does that tell us about that state’s so-called “social contract.” After all, how many times have we heard the political myth that sounds something like this “by choosing to live in this country, you are saying that you will abide by all the state’s demands and rules. Thus, everything the state does to you is voluntary.” But now, it seems, young men will need to get permission to leave. That’s a truly strange social “contract” indeed.  

Tyler Durden Fri, 04/10/2026 - 03:30

China's Debt Surpasses Europe For The First Time

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China's Debt Surpasses Europe For The First Time

China’s government debt has surpassed the European Union’s for the first time, marking a major shift in the global debt landscape.

Since the 2008 financial crisis, the U.S., China, and Europe have followed very different borrowing paths. While Europe kept debt growth relatively constrained, both the U.S. and China expanded rapidly—especially after 2020.

The chart below, via Visual Capitalist's Niccolo Conte, visualizes annual government debt totals for the U.S., EU, and China from 1995 to 2025 in current U.S. dollars (not adjusted for inflation), using data from the IMF.

In 2025, China’s government debt reached $18.7 trillion, surpassing the EU’s $17.6 trillion total for the first time.

The crossover underscores how rapidly China’s borrowing has scaled over the past two decades.

The Rapid Rise in U.S. and China’s Government Debt

In 2008, U.S. government debt stood at $10.9 trillion, roughly in line with the EU’s $10.7 trillion total. By 2025, it had surged to $38.3 trillion, leaving the EU behind by $20.7 trillion.

The data table below shows the government debt of the U.S., China, and EU from 1995 to 2025 in current U.S. dollars:

From just $1.2 trillion in 2008, China’s government debt grew at roughly 17% annually—fast enough to overtake the EU in less than two decades.

Since 2008, U.S. government debt expanded at about 7.7% per year, compared with roughly 3.0% per year for the EU.

Why China and U.S. Debt Grew Much Faster than Europe’s

While the EU’s slower debt growth partially reflects weaker nominal growth across the bloc compared to the U.S. and China, it also is a symptom of the bloc’s tighter fiscal constraints after Europe’s sovereign debt crisis, which peaked between 2010 and 2012.

In contrast, China’s surge in debt was driven by credit expansion, infrastructure spending, and state-backed growth.

The U.S., meanwhile, combined crisis-era borrowing with persistent deficits, especially after 2020, allowing debt to scale far beyond Europe’s. With fewer fiscal constraints at the federal level, Washington has maintained higher spending levels—helping explain why U.S. debt now stands far above both China and the EU.

If you enjoyed today’s post, check out The World’s $111 Trillion in Government Debt on Voronoi.

Tyler Durden Fri, 04/10/2026 - 02:45

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