The AI Race Is An Energy Race, And Regions With Nat Gas Are Winning
The post The AI Race Is An Energy Race, And Regions With Nat Gas Are Winning appeared com. Countries and companies in the AI race are increasingly realizing they are in an energy race. On some days, it seems as if AI is driving energy, with AI data centers representing the most significant new power demand growth in decades. On other days, it seems as if energy is driving AI, with the largest technology companies scrambling to secure power and even vertically integrating to avoid external energy constraints. Whether AI or energy was in the driver’s seat was one of the questions at the SAIT AI Summit this past week, in Calgary, Alberta, the energy hub of Canada, as executives from major energy companies spoke about using AI tools while also working to supply the energy this technology requires. “Energy companies are in the unique position of deploying artificial intelligence internally to enhance operations, while also providing energy to data centers powering this transformational shift in technology. Across our events and programs, we are seeing more integration and implementation of artificial intelligence at the executive level within the energy sector,” said Lora Bucsis at SAIT, Director, Product and Learner Success. The increasing overlap between tech and energy is a welcome change for the energy sector, with the largest companies in the world, from Alphabet to Meta, now deploying all their cash, and then some, into the physical economy. Commodities have not benefited from a true capex boom in decades, but this is now changing. Goldman estimates that capex spending amongst the S&P 500 will accelerate by 17% this coming year, driven primarily by data centers and associated power needs. Returns on AI have so far not kept up with the level of investment, but unique dynamics may sustain capital spending regardless of immediate returns. Governments view AI advantages as existential, so there is nothing stopping governments from printing.
