Prominent economist Steve Hanke has dismissed predictions that artificial intelligence will become free and universally accessible, labelling expectations of “free AI” a delusion driven by flawed economic thinking. Hanke, a professor of applied economics at Johns Hopkins University and a former senior economist on President Ronald Reagan’s Council of Economic Advisers, warned that the extreme resource requirements of AI infrastructure make zero-cost access impossible. His comments push back against Tesla and xAI CEO Elon Musk, who has argued that AI will usher in an era of post-scarcity abundance. As per Business Insider, generative AI relies on continuous, high-cost physical infrastructure, including advanced graphics processing units (GPUs), massive electrical power and millions of gallons of cooling water. “This belief is based on a disconnect from reality, as well as a good dose of idiotic economic reasoning. AI is incredibly costly; it is very resource intensive. It requires huge amounts of water, power, and physical capital,” Hanke said. He criticised tech visionaries who equate AI with legacy software, describing the comparison as “apples and oranges”, and predicted that the finite availability and rising cost of physical resources will dictate the boundaries and pace of the AI boom. Major technology groups, including Microsoft, Google-parent Alphabet, Amazon and Meta, have projected hundreds of billions of dollars in capital expenditures for specialised data centres. Hanke also rejected claims that AI will trigger immediate, widespread unemployment, countering that replacing human workers with AI will often prove expensive for