AI is fueling a data center boom
But what will it lead to? New energy and AI chip infrastructure, but at what cost?
Image: Nvidia Blackwell GB200-powered AI servers at Microsoft Azure. Source.
Hey Everyone,
I’m very drawn to the idea that a major datacenter expansion is underway that will change the future of energy and even how BigTech is impacting climate change and environmental reforms, or worsening existing global problems in their big bet on Generative AI, investing in Cloud computing growth, and trying to dominate future markets that don’t even really exist yet.
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These are foundational years for a radically alterted future.
It turns out data centers are a big part of all of this. This is the first in a series of deep dive on what I see as a great acceleration of datacenters and the U.S. racing to lock down and create moats on AI infrastructure against their rivals. The environmental impacts of AI infrastructure also interests me and we will cover this as well today. But put simply, what is a data center?
A data center in simplified legacy terms, is simply a facility that centralizes an organization's shared IT operations and equipment for the purposes of storing, processing, and disseminating data and applications. It typically includes a variety of components such as servers, storage systems, networking equipment, and support infrastructure like power supplies and cooling systems.
The energy, water, CO2 emissions, corporate control and geopolitical aspects of AI’s infrastructure is all going to become a lot more under the microscope and mainstream as these AI supercomputers and AI chip fabs begin to proliferate all over the world at an astounding rate that begins in the 2025 to 2035 period.
In this document I refer to this datacenter expansion push as the Great datacenter Boom, or GDB.
The Datacenter Boom is going to Impact Energy consumption in a Globally significant way
The tension between building up AI infrastructure in an AI arms race between countries and corporations, and the climate and regional impacts its going to have is just the kind of story of why the AI Supreamcy Newsletter exists that I started nearly three years ago. This story is on-going and is going to take more than one article to do any justice with.
🟢 The article "Microsoft’s Hypocrisy on AI" by Karen Hao, published in The Atlantic, explores the contradiction between Microsoft’s public climate commitments and its ongoing business relationships with fossil-fuel companies. Microsoft is helping OpenAI build a powerful and Middle Eastern backed consortium around the future of A.I. Infrastructure.
🟡 While it is clear that the drive to develop more powerful AI capabilities will require significant infrastructure investment to support it, it will also balloon energy demands and some of the estimates and projections are fairly shocking if you care about the Environmental impacts at all or believe powerful corporations have a responsibility to deal with climate change and contribute positive social outcomes and not just profits. There are also egos and wealthy actors involved. The Generative AI movement is also about elites consolidating power and nations harnessing their AI Supremacy for various kinds of privilege, exceptionalism and unfair economic advantages.
🔴 There are powerful people involved: Elon Musk’s fallout with OpenAI and failure to purchase DeepMind before Google got its hands on it and his own ambitions as well as the founder of Softbank, Masayoshi Son, and of course Sam Altman’s own AI infrastructure ambitions with a rising player in MGX of the UAE means there are colorful characters involved here and not just faceless corporations. Microsoft and Google both especially are showing a major global datacenter expansion movement and initiatives in 2024 in multiple parts of the world, as if carving up a Techno-geopolitical map of BigTech colonialism and a new order of its hegemony.
The ‘Altman Principle’
“A ChatGPT query needs nearly 10 times as much electricity to process as a Google search. In that difference lies a coming sea change in how the US, Europe, and the world at large will consume power — and how much that will cost.“ - Goldman Sachs, 2024 (source)
Advent of the Great datacenter Boom (GDB)
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