Artificial Intelligence: The Energy, Computing Power, and Geographical Changes It Will Need, and Why That is Good

One of several large concerns about AI is getting enough resources for it, namely electricity and data center capacity.  Here’s a fast look at seven articles showing it can’t make it on what’s out there now.

“How Amazon goes nuclear” (Dan DeFrancesco, Business Insider, October 25^th) started with “What’s bigger than tech’s ambitious plans for generative AI?  The amount of energy needed to power it.”  It may call for a large, controversial source, as “Amazon has led a $500 million financing round for a company developing modular nuclear reactors.”  Google has started similar endeavors, and “should these data center efforts continue to struggle, companies’ big bets on generative AI could also falter.”

Otherwise, “AI’s leaders puzzle over energy question” (Marissa Newman, Bloomberg Tech Daily, October 30^th).  That puzzling, happening at Dubai’s Future Investment Initiative which was “mostly centered on AI,” included how to deal with a possible 40% next-decade rise in electricity use – not that much more for AI, but overall.  The Saudi Arabian Oil Company’s CEO “made his pitch” on data centers there using natural gas at relatively low cost.  Others saw merit.

Stateside, “Exxon Plans to Sell Electricity to Data Centers” (Rebecca F. Elliott, The New York Times, December 11^th).  That will also be powered by natural gas, generated at a large power plant, possibly completed by late 2029, of undisclosed cost and location, and will be a new line of external business for ExxonMobil.

With these new facilities, it is fair to consider “How A.I. Could Reshape the Economic Geography of America” (Steve Lohr, The New York Times, December 26^th).  Cities “well positioned to use A.I. to become more productive” include “Chattanooga and other once-struggling cities in the Midwest, Mid-Atlantic and South,” such as Dayton, Scranton, Savannah, and Greenville, each of which has “an educated work force, affordable housing and workers who are mostly in occupations and industries less likely to be replaced or disrupted by A.I.”  A variety of other businesses, many connected with trucking and freight, stand to benefit.

What is “The 19^th-Century Technology That Threatens A.I.” (Azeem Azhar, still The New York Times, December 28^th)?  It’s electricity, on which “America has a long way to go.”  In Virginia, “a hotbed for data centers,” those wanting “to connect to the grid” could face a seven-year wait, and “some counties in the state are introducing limits” on them.  Our country, per the author, has “a patchwork of conflicting regulations, outdated structures and misaligned investment incentives” slowing or stopping infrastructure building, along with “a skills gap in labor shortages in construction and engineering, a complex permitting process trapping projects in years of bureaucratic review across multiple agencies,” “high costs of capital,” and “local opposition.”  Overall, per Azhar, “if the United States truly wants to secure its leadership in A.I., it must equally invest in the energy systems that power it.”

In answer to a question arising naturally from the first source above, Bradley Hoppenstein, writing in CNBC, told us “Why tech giants such as Microsoft, Amazon, Google and Meta are betting big on nuclear power” (December 28^th).  It’s because of “the energy demands of their data centers and AI models” that “nuclear power has a lot of benefits,” including having no carbon, its providing “tremendous economic impact,” and “can be always on and run all the time.”  However, we haven’t seen anywhere near as much opposition from anti-nuclear groups as we probably will. 

On the front page of Sunday, December 29^th’s New York Times business section was “Data Centers Are Fueling a New Gold Rush” (Karen Weise).  They named installations being built in less populated areas of Washington state, resulting in “electricians flocking to regions around the country that, at least for now, have power to spare” and “a housing crunch” almost certain to create more jobs.

The electricians in Washington were matter-of-fact about the boom not lasting forever.  When work runs out there, they hope to find it elsewhere, and probably will, even in the same industry.  No matter what happens in the long run with artificial intelligence, it is building economies now.  Don’t expect that to stop this year – or the next.