AI and heatwaves pose dual threats to power grid: Morning Brief

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Shareholders who participate in AI energy trading will benefit from the massive energy requirements of AI technology.

But these same demands will have difficult implications for tech companies’ sustainability goals — and put enormous new pressure on the energy grid.

Already this month, Big heat wave In parts of the Northeast, Mid-Atlantic and Midwest, an early preview of a potential summer of extreme weather has emerged that will overload the power grid.

These demands pile up with the country’s boom in data center development, which has created long-term electricity demand that has done the impossible — making the utility trade look hot. With energy-hungry AI systems, energy trading is now AI trading.

To put AI’s energy needs into perspective, a ChatGPT query requires, on average, nearly 10 times the amount of electricity to process a Google search. If AI companies succeed in their goal, user interaction with software powered by large language models (LLMs) will make web browsers less power-hungry — or more efficient, one could say — and obsolete.

The rise of generative AI coincides with other factors increasing energy demand, from the electrification of transportation and infrastructure to the onshoring of manufacturing in the United States. In addition, there is another acute demand: AI systems need power all the time. “They won’t accept intermittent data center power,” said Sam Marr, senior advisor at Arnold Ventures.

For companies committed to sustainability, this could, perversely, lead to continued reliance on fossil fuels to sustain their AI ambitions. “They will meet their energy demand one way or another, whether it’s clean energy or fossil energy,” Marr said.

The projections for AI-driven energy demand are so high that tech companies are banking on ambitious energy breakthroughs to offset harmful emissions and power the future. A literal god from the machine.

All major cloud providers such as Google Cloud, Microsoft Azure, and Amazon Web Services are investing in renewable energy to match their annual electricity consumption.

Clean energy projects catching the attention of AI companies include: Fusion and geothermal energyOther plans include connecting massive data centers directly to nuclear power sites.

Critics of the overuse of AI point to the potential for wastefulness and greed. But others see AI-induced desperation for clean energy as a catalyst for energy innovation.

The story continues

“We need to accelerate the timeline for these technologies to make them readily available and scalable to meet our growing energy needs,” Marr said.

If the most profitable and influential technology companies are helping to accelerate renewable alternatives – even in the service of their own far-fetched AI-powered financial machines – is it so bad?

However, there are still risks in the short term.

Demand is growing so fast that it is slowing the shift away from fossil fuels while pushing companies to scale their data centers, said Tamara Nezi, a project manager at Data & Society, a nonprofit that studies the impacts of artificial intelligence.

Some proponents of green AI claim that energy efficiency could alleviate some of the pressures, she says. But even enhanced energy efficiency cannot offset the massive growth in demand. The same efficiency may lead to increased energy use.

If climate change accelerates energy demand, it’s not just shareholders who bear the risk of an AI-driven energy transition. The disruptions that could arise from unsatisfied resource needs have a way of seeping into investment portfolios.

Hamza Shaaban is a reporter for Yahoo Finance covering markets and economics. Follow Hamza on Twitter @hshaban.

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