Exploring the AI boom, on the ground in Silicon Valley

Earlier this month, “Marketplace” kicked off our AI series looking at whether the industry, with its hundreds of billions of dollars in spending on data centers specifically, is becoming too big to fail. “Marketplace” host Kai Ryssdal also visited a Los Angeles data center, and “Marketplace Tech” host Meghan McCarty Carino looked into people’s negative feelings about our AI future. 

To wrap up this leg of the reporting, Ryssdal and McCarty Carino spent the day on the ground together in Silicon Valley to explore the AI economy — and the trade-offs that come with it. 

Despite the AI boom, McCarty Carino, who both lives in and grew up in the Bay Area, noted that it doesn’t feel like a boom time for the local economy. 

“There are certain metrics you can look at, like the number of tech jobs in the Bay Area is still lower than it was during the pandemic,” she said. “I’ve heard from a number of people that the job market in tech here hasn’t felt this brutal since the dot-com bust.” 

Tiny Fish AI

According to analysis by Pitchbook and the National Venture Capital Association, AI startups, of which there are thousands, pulled in $222 billion in venture capital investment in 2025. That means AI startups received about 65% of all VC dollars last year. 

Ryssdal and McCarty Carino visited one of those AI startups, called TinyFish AI. It got about $47 million in VC funding last year. That’s small compared to companies like Anthropic and Open AI, but for AI to pay off the way investors are expecting, it will require a whole ecosystem of AI companies. 

“The problem is that as AI is becoming more and more powerful and value-driven, the chasm between the large and small companies [is] expanding,” said TinyFish co-founder and CEO Sudheesh Nair. “We are intentionally trying to see if it is possible for us to bridge that.” 

TinyFish makes AI software that makes it easier for information from small, independent hotel websites to appear in search results from platforms like Google Hotels or Expedia.

“I would say we are the infrastructure layer on which we want others to build applications,” Nair said.

Nair does acknowledge that deploying AI across the economy—from startups like his and others— will have consequences, especially in places with cheaper water and electricity for data centers.

“Smaller communities are going to be really affected by this,” he said. “Sort of like invisible fracking.”

He believes that the value of AI will eventually reach them, but it could take years. “For example, if we find a new cancer drug,” he said.

Digital Realty data center

After TinyFish, Ryssdal and McCarty Carino visited one of the defining images of the AI economy right now: a data center. This one, still under construction, is owned by Digital Realty. With more than 300 data centers worldwide, the company is one of the biggest data center colocation providers. In Silicon Valley alone, Digital Realty has 15 data centers, including the Santa Clara location the “Marketplace” team visited. 

Digital Realty broke ground on the facility in 2021. It’s 430,000 square feet, with an empty, identical 12-megawatt data hall on each of its four floors. Chief revenue officer Colin McLean told Ryssdal and McCarty Carino that it’s expected to become operational in 2027. 

“Obviously we have to work very closely with the municipalities and utility grid when power is delivered,” McLean said. “It’s a challenge if you don’t have power for a data center, so we have to wait for the timing of that.” 

McLean said power will be “the issue” moving forward when it comes to data centers. A Carnegie Mellon and North Carolina State University study found that data center growth could increase electricity bills 8% nationally by 2030. In some communities, like parts of Virginia that are home to many AI data centers, those costs could increase by more than 25%. 

Even though this facility isn’t operational yet, McLean said the company starts leasing data center space to customers 12 to 14 months in advance of securing power.  

“There is a kind of insatiable demand for data center capacity,” McLean said. “We do see a continued trend of more consumption. Data is becoming more and more valuable, it’s almost like the new oil in terms of value proposition.” 

Digital Realty’s data centers can be used for AI or for more traditional colocation purposes – think an app or bank that needs data center space close to its clients. 

Ryssdal asked McLean about concerns with how much power and water demand data centers bring to communities. 

“We understand, and we want to be good partners to the community,” McLean said. “We feel like the data centers add quite a bit to the digital and local economy, not just in the form of tax dollars, but in the form of jobs and how we’re supporting the infrastructure needs.” 

Click the audio player above to hear the full episode.