A race is underway among the world’s largest corporations for dominance in artificial intelligence and, so far, investors are along for the ride. Leading artificial intelligence chip maker NVIDIAis now the world’s second largest company by market capitalization. OpenAI, the Microsoft-backed leader in AI models, raised $6.6 billion in last month’s investment round, one of the largest private investments in history.
Among these energy demand drivers, AI is unique in that a competitive advantage tends to go to those companies that use more energy . This suggests that the rapid acceleration of AI’s energy consumption is not likely to end anytime soon.that the U.S. power sector would take offline just 105,000 megawatts of coal-fired power by 2035, a 21% decline in retirements projected a year earlier.
Climate change particularly jeopardizes AI profitability. Unlike other new technologies, to become profitable AI must bring in revenues sufficient to offset large annual capital expenditures. Key AI industry observers, such asThe AI investment case in response is that companies in virtually every industry sector will want to find out how AI might provide them with a competitive edge. But if a significant downturn in the economy emerges, this widespread adoption becomes much less likely.
Any hope for Congressional action on these ideas would require tech industry leadership on carbon pricing that to date has been missing.Fortunately, meaningful actions to decarbonize the electricity system outside of Congress are feasible.