Liebreich: Generative AI – The Power and the Glory

This year will go down in history as the year the energy sector woke up to AI. Every energy conference offers multiple sessions on the subject, and they are standing room only. Last year’s Electricity Market Report published by the International Energy Agency (IEA) contained not one single mention of data centers, this year’s report had a whole section on them.

This is also the year AI woke up to energy. The most powerful tech titans in the world have been humbled by the realization that their plans for world domination could be stymied by something as prosaic as electricity – and have embarked on a land grab for whatever sources of dispatchable power they can, triggering something of a gold rush.

Is the data center power frenzy just the latest of a long line of energy sector bubbles, or is it the dawning of a new normal? Do data centers create such strong demand pull-through that they trigger a new era of new-build nuclear, geothermal and other clean, dispatchable technologies? Or do they just suck up existing sources of clean power and increase the use of fossil fuels, causing a wave of resentment and regulation?

AI has been around for many decades, during which time it has undergone multiple Gartner Hype Cycles. Anyone old enough will remember the excitement in 1997, when IBM’s Deep Blue defeated chess champion Garry Kasparov – but all the public saw were slightly better chess computers. In the 2000s, machine learning led to breakthroughs in computer vision, but the only mass market product that resulted was a robot vacuum cleaner that couldn’t avoid dog poop.

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