What If Tech Execs Don’t Really Need All These Data Centers? – Wisconsin Energy Institute
The rush to build new computing and energy infrastructure for artificial intelligence comes with a lot of unintended consequences—especially if this new infrastructure isn’t actually needed.
A “fiber glut” might sound like a phrase uttered by a wellness influencer extolling the virtues of ancient grains. In reality, it’s the name for an early 2000s phenomenon that drove some of the world’s fastest-growing companies into the ground. Amid the pre-Y2K dot-com boom, corporations, industry analysts, and even the U.S. Department of Commerce began to circulate a shocking statistic: that the internet doubled in size every one hundred days, implying an annual growth rate of 1,000 percent. Millions of miles of fiber-optic cables were buried below streets and oceans in the late 1990s to keep up with supposedly exponential demand that never materialized. By 2002, just 2.7 percent of the fiber installed in the preceding few years was being used.
Companies that drove the fiber glut were saddled with financial ruin and accounting scandals.
Vint Cerf, senior vice president at the fiber optics firm WorldCom, admitted to The Wall Street Journal, said:
The actual traffic growth was never close to 1,000% per year,
“But I don’t think it was an attempt to misstate anything—it was an honest characterization of what kind of demand we were seeing from these companies.”
Today, a new generation of tech executives are making similarly audacious claims about demand for their products, justifying yet another infrastructure-building binge. The industry this time is artificial intelligence. OpenAI founder Sam Altman has been pitching everyone from the Biden administration to the United Arab Emirates for help in building out a fleet of data centers that would each require five gigawatts of electricity, about a thousand times more than the average data center. OpenAI’s vice president of global affairs—Clinton administration alum Chris Lehane—recently predicted that the U.S. would need to invest $175 billion in AI infrastructure: funds, he contends, that will “reindustrialize the country” and “revitalize the American Dream.” Banks and consultancies have bolstered those claims. Goldman Sachs, for instance, projects that data centers will require an additional 47 GW of power through 2030. The consulting firm Grid Strategies has forecast that U.S. electricity demand will grow by 456 percent over the next five years, by 128 GW. After meeting with OpenAI, Meta, Microsoft, and other firms pushing a data center build-out, the White House is now reportedly mulling an executive order that would fast-track data center construction, potentially allowing new facilities to exceed pollution limits, build on federal lands, and receive preferential access to available power supplies.
Given that most of the country’s power is still generated from fossil fuels, this raises some obvious climate concerns. Major tech companies have started investing in next-generation energy technologies like nuclear fusion, carbon capture, and small modular nuclear reactors. But those require lead time and in some cases luck, and the same companies want new data centers now. Data center growth is already helping to extend the life of coal-fired power plants and fueling a boomlet for the gas power providers furnishing Silicon Valley titans with new turbines. There is nothing inevitable, though, about the tremendous energy demand that AI boosters say they’ll need.
Jonathan Koomey, a researcher and consultant who studies the energy impact of internet and information technology, says :
Nobody has any idea what AI electricity usage in data centers is going to be in three to four years
Electricity demand is indeed growing for the first time in over a decade, he says. Not all of that is from data centers, and larger spikes in demand are generally concentrated in places with new factories and data centers, like Virginia and Georgia. The modest overall load growth happening now, moreover, doesn’t indicate that there’s some looming crisis in which the U.S. will run out of electricity as data centers proliferate.
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What If Tech Execs Don’t Really Need All These Data Centers? – Wisconsin Energy Institute, source
