AI, Energy, And Social License

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In a recent article about data centers, I suggested that many of these enormous computing installations are being powered by old fashioned thermal generation that relies on burning fossil fuels. Several readers pushed back on that assertion, claiming that in fact, renewables are the primary source of power for them. It turns out we are both right and both wrong.

Yes, a number of large tech companies like Alphabet, Microsoft, and Meta have put a priority on powering their data centers with renewables, but that was then, this is now. The business of artificial intelligence is exploding in a way never before seen in human history. Companies are tripping all over themselves to build new facilities and the energy to run them is simply not there.

While corporate guidelines may favor renewables where possible, when they are not possible, they are turning to any source of power they can find. Microsoft is part of a billion dollar boondoggle to reactivate the Three Mile Island nuclear generating station in Pennsylvania that has been shuttered for thirty years. Opinions vary about nuclear power, but it is clearly not as non-polluting as solar farms.

Data Center Pollution In Memphis

In Memphis, Elon Musk’s Colossus data center is powered in part by a dozen portable methane generators because the local utility will not be able to deliver enough electricity for years and Elon, of course, can’t wait. So the hate-filled spew that Grokipedia is spitting out 24/7 is also filling the air over Memphis with pollutants that are harmful to human health and the environment. But Elon doesn’t care. He doesn’t have to breathe the crud Colossus is creating.

Part of the concern about Big Data and AI is, no matter how environmentally conscious the companies tried to be in the past, now all bets are off as the race to dominate AI reaches a fever pitch. Add in the toxic attitude toward renewables emanating from the MAGA crowd, and the future of computing looks like it will be powered more and more by fossil fuels.

Just this week, alleged energy secretary Chris Wright suggested companies should turn on all their diesel backup generators, which he claimed would instantly add 35 GW of electricity to the grid. Of course, it would also benefit the companies that sell diesel fuel as well. According to Bloomberg, Wright told the North American Gas Forum last week that doing so would eliminate the need to build scores of power plants costing tens of billions of dollars.

So, dear reader, the issue is not what the tech companies have done in the past. The issue is what are they going to do in the future. The answer appears to be “burn, baby, burn” and plenty of it. Its proponents fail to notice that AI is supposed to be the savior of humanity, but burning fossil fuels may well lead to the death of billions. We wonder which B Schools are teaching their students that killing their customers is a good long term strategy.

Social License And AI

A report by Politico claims Microsoft CEO Satya Nadella warned recently the vast amount of energy consumed by artificial intelligence could turn people against the industry. He suggested AI and tech companies need to earn public trust to turn things around. “At the end of the day, I think that this industry — to which I belong — needs to earn the social permission to consume energy, because we’re doing good in the world,” Nadella said.

While downplaying the immediate impact of AI on power consumption, Nadella admitted that the rapid growth of data centers is “putting a lot of pressure” on the electric grid, and that the public will accept that pressure only if it “results in economic growth that is broad-spread in the economy.” Nadella’s remarks add to a growing chorus of industry voices warning that the sector’s ravenous appetite for electricity could spark a public backlash, Politico said.

Several successful candidates in November’s elections campaigned against the vast energy consumed by data centers, creating a new political liability for the industry and threatening a new, populist-tinged complication for the current party in power.

Asked if AI might be creating an investment bubble, Nadella argued that AI won’t do so as long as it delivers broad productivity gains that translate into an expanded economy. He warned that nothing  — not even a runaway hype machine like AI — can outrun economic fundamentals. “It can’t be a few companies in one sector, in one continent having all the returns, it has to be a much broader phenomenon,” he said. “Otherwise it will be a ‘road to nowhere.’ But I feel pretty confident that we are on a path to this. But at the same time, it won’t be linear — nothing is.”

In a recent report, J.P Morgan Asset Management strategist Stephanie Aliaga said AI-related capital expenditures were now a significant chunk of overall GDP growth, “outpacing the U.S. consumer as an engine of expansion.” And you think the government and the industry are going to let a few million tons of carbon dioxide stand in the way? Don’t be silly.

AI As A Tool

There are plenty of people who think AI is just another form of online gaming, where the general rule is “garbage in, garbage out.” Certainly the example of Grokipedia seems to prove that what the computers decide to spit out is directly influenced by who is doing the programming.

Here in South Florida, the most frequent passtime for older citizens is going to doctors. One physician I entrust my care to recently wrote about the effect he sees AI having on the medical community. “Many of you have asked about artificial intelligence in medicine. It is coming whether we like it or not. And I believe it will be a good thing,” he wrote.

“There are now smartphone apps that allow you to photograph a mole and have it analyzed with accuracy approaching that of a dermatologist. One of the biggest problems in medicine today is access. Care is often too expensive or too difficult to obtain.” He tells the story of a young man he knows who delayed treatment of a mole because of the cost, but it became a large melanoma.

“If that young man had access to an app that could have flagged the changing mole at a price he could afford, he might not have need extensive treatment….If you could stay home a get a full skin exam that is 98 percent as good as an in-person visit…..and it only cost $5.00 instead of $100, wouldn’t you do it? I think many would.

“I believe artificial intelligence  will ultimately be a blessing. A nurse practitioner working in partnership with AI may one day match or surpass the capability of a physician. Access will improve, costs will all, and eventually doctors, nurse practitioners and PAs may be replaced entirely by AI.” He wrote that medical research that used to take hours or even days can now be accomplished in seconds “at virtually no cost.”

The Jury Is Still Out On AI

I give this man of medicine a lot of credit. In my global experience, no other doctor has ever written a personal letter to his patients — something I would like to see more of. It has a way of humanizing our health care professionals, who often are under such time pressure, they have little time to interact at a personal level with their patients.

His optimism about AI is welcome news, but there are still many who question whether this mad dash into the future is rational, reasonable, or even necessary. Not a few observers have drawn a parallel between AI and the great tech bubble that came close to taking down the global economy at the turn of the century.

The best we can say is that the jury is still out. The scramble to build “more, more, more!” data centers makes a lot of people uneasy, myself included. From the outside, it looks more like a money grab than an effort to make life more fulfilling for the hoi polloi. Your opinion may be different than mine. I am a skeptical SOB when it comes to oligarchs promising to help when the only ones they are really helping are themselves.

James Michener has a famous line in his book Hawai’i that goes like this: “The missionaries came to Hawai’i to do good and they did right well.” In fact, they built fortunes on the backs of the Indigenous people they were there to minister to. Human nature being what it is, I remain skeptical that tech bros have my best interests at heart.

The one thing that seems certain is that the demand for electricity will double in coming years after being basically flat for years. There is a mad scramble to find new sources of energy and with the current US administration strongly favoring thermal generation and opposing renewables, AI and the data center explosion could do irreparable harm to our fragile environment. AI may truly be a miracle for some, but at what cost to society?