Over the past year, the technological and business disruption caused by artificial intelligence technologies, particularly generative AI applications, has created global issues that the world has not yet considered. The question is how humanity will cope with the increased energy consumption required to process such large amounts. Existing power grids around the world were built in a previous era and designed to power homes, factories, and businesses.
However, over the past decade, these networks have had to cope with two new types of demand that far exceed their capacity to supply. The first is to charge electric vehicles, and the second is to support the power needs of data centers that include cloud infrastructure that performs large amounts of computation. .
1 View gallery
Yair Snir, Managing Partner, Dell Technologies Capital, Israel and Europe
(Photo: Dell Technologies Capital)
It's no wonder that consulting firm Grid Strategies predicts that U.S. electricity demand over the next five years will double compared to projections released last year. In addition, power shortages have delayed the opening of new server farms by 2 to 6 years.
The tech giants have started an electrical arms race. How does that affect all of our power?
Big tech companies (such as AWS, Microsoft, and Google) are extremely concerned that power shortages will threaten their core business computing capabilities. As such, they have begun an aggressive arms race aimed at building up electricity reserves that will last for the next 20 to 30 years and ensuring energy independence similar to that of nations.
This is a zero-sum game, and one side's victory in gaining a kilowatt always comes at the other's expense. In addition to conventional energy, which they buy in bulk, they seek to monopolize green energy reserves, mainly solar and wind energy.
For example, Amazon purchased 50% of the energy output of Scotland's Moraywest wind farm. In 2022, technology companies purchased approximately 48% of all green energy production in the United States, followed by the energy sector (9%), communications sector (8%), and food and beverage sector (7%).
Tech giants are buying stocks in alternative energies not so much to protect the environment as the prices of these energies have fallen by tens of percent in recent years and there are currently large amounts of available reserves. This is because these energies are the only ones.
It is commendable that these technology companies are taking it upon themselves to build alternative energy projects. However, the aggressive acquisition of these power reserves has raised concerns that they could dominate future electricity markets and undermine the welfare and rights of consumers and businesses who do not have the same purchasing power as they do. I am.
Regulators around the world have yet to address this potential, previously overlooked threat, and must do so now to ensure energy justice for all. Additionally, clear priorities for power distribution must be established, taking into account ethical issues such as who sets priorities and according to which criteria. For example, should there be a priority for a TikTok application or a diagnostic imaging center that serves thousands of doctors and hundreds of thousands of patients?
For Israeli entrepreneurs, unlimited power consumption in the era of AI and GAI is an exceptional business opportunity. Traditional power infrastructure, which has remained essentially unchanged for decades, is expected to become fully digital over the next few years, with entire sectors moving to the power cloud, but this is not the case for the telecommunications industry. It's a similar process to what I went through. This is a call to action for entrepreneurs to enter this competitive sector, which requires innovative solutions in the areas of generation, transmission, supply, billing, collection and other customer interfaces.
Governments must remember that green energy is not only cheap and environmentally friendly, but also ensures energy independence for high-tech industries and the economy as a whole, which require ever-increasing processing power. Without electricity, not a single piece would move from its place.
Yair Snir is Managing Partner of Dell Technologies Capital, Israel and Europe
