The Dark Side of AI: We’re Heading Towards An Energy Crisis
Summary
TLDRThe video script addresses the looming electricity crisis due to AI's soaring energy demands, highlighting the irony of tech giants advocating for energy conservation while contributing to the problem. It points out the rapid growth of AI energy needs, far outpacing electricity production. The script proposes Bitcoin mining as a practical solution, explaining how it can support renewable energy projects, provide a secondary revenue stream for energy providers, and act as a flexible partner during energy crises. Examples from around the world illustrate how Bitcoin mining is already positively impacting renewable energy financing and consumption.
Takeaways
- 🔋 The looming shortage of electricity could impede the operation of AI chips, suggesting a potential energy crisis driven by AI's growing energy demands.
- 💡 AI is creating an energy crisis that could significantly increase electricity bills, highlighting a dark side of AI development that is not widely recognized.
- 🏢 Tech giants like Tesla, Google, and Microsoft are contributing to the AI energy crisis despite advocating for energy conservation and sustainability.
- 🌐 The rapid growth in AI's energy consumption is outpacing the increase in electricity production capacity, indicating a potential future shortfall.
- 💰 The high costs and energy demands of data centers are making them a unique asset class in real estate, with significant implications for energy supply.
- 🚀 Tesla's gigafactory in Austin, Texas, exemplifies the scale of energy consumption for AI, with massive data centers requiring substantial power to train AI models.
- 🔌 The energy-intensive process of AI model training is compared to the energy usage of constructing skyscrapers, emphasizing the scale of the problem.
- 🌿 Bitcoin mining is presented as a solution to the AI energy crisis, as it can help finance renewable energy projects and provide a steady buyer for energy.
- ⚡ Bitcoin miners can act as flexible energy consumers, adjusting their consumption during peak and off-peak hours, which benefits both the miners and energy providers.
- 🌍 Global examples of Bitcoin mining aiding renewable energy projects, such as in the United Arab Emirates, Iceland, and Kenya, demonstrate the practicality of this solution.
Q & A
What is the potential next shortage that could impact technology, according to the video?
-The potential next shortage discussed in the video is electricity, as there might not be enough electricity to run all the chips required for AI and technology advancements.
What is described as the 'dark side' of AI in the video?
-The 'dark side' of AI refers to the energy crisis that AI is creating, which could lead to a significant increase in electricity bills and affect everyday energy usage.
Why are data centers considered a unique asset class in real estate according to the video?
-Data centers are considered a unique asset class in real estate because each building can cost four to five billion dollars and require massive amounts of power, which are unprecedented in the real estate business.
What are the two main questions raised by the video regarding the development of data centers?
-The two main questions raised are: where will we get the energy from to power these data centers, and who will pay for it.
How does the video suggest that large tech companies contribute to the AI energy crisis?
-The video suggests that large tech companies, while advocating for energy conservation and net carbon zero, are major contributors to the AI energy crisis due to their massive energy consumption for AI and data centers.
What is the significance of the Tesla gigafactory in Austin, Texas, as mentioned in the video?
-The Tesla gigafactory in Austin, Texas is significant because it is the largest car manufacturing plant in the country and is also set to become one of the largest data centers in the world for training AI models.
What does the video claim about the growth rates of electricity production capacity and AI energy demands?
-According to the video, electricity production capacity is growing by about 2% a year through 2035, while AI energy demands are growing at a much faster rate of 23% a year.
How does Bitcoin mining provide a solution to the AI energy crisis as per the video?
-Bitcoin mining is presented as a solution to the AI energy crisis because it helps finance renewable energy projects, provides a secondary revenue source for energy providers, and can shut off operations during severe weather or energy shortages, making it a flexible and beneficial partner.
What are the three key ways in which Bitcoin mining helps bootstrap the AI revolution according to the video?
-Bitcoin mining helps bootstrap the AI revolution by making financing renewable projects more feasible, providing a secondary revenue source for utilities, and being a better partner during energy crises by being able to shut off operations when needed.
What is the role of battery storage in the context of the AI energy crisis as discussed in the video?
-The video questions the feasibility and cleanliness of battery storage projects as a solution to the AI energy crisis, pointing out the challenges in scaling up battery storage to meet the projected demands and the environmental impact of battery production and disposal.
Outlines
🔋 AI's Looming Energy Crisis
The video script discusses the impending energy crisis due to the rapid advancement of AI and its insatiable appetite for electricity. It posits that the next major shortage will be in electricity, as the demand for power to run AI chips outstrips supply. The script suggests that before hitting a capital investment threshold, energy constraints will become a limiting factor. It highlights the dark side of AI, where billionaires are aware of the energy crisis that AI is creating, which could lead to a surge in electricity bills. The video aims to expose this reality and propose solutions to prevent a dystopian future. It questions the sustainability of the data center business, given the massive capital expenditures by tech giants and the unique challenges of power supply and cost associated with these facilities.
🌐 The Digital-Physical Transformation Gap
Paragraph 2 delves into the disparity between the growth of digital transformation, fueled by AI, and the physical infrastructure's ability to keep pace. It cites studies showing that while electricity production capacity is increasing by about 2% annually, AI's energy demands are growing at a staggering 23% per year. The script discusses the energy-intensive process of AI model training, which is likened to the energy consumption of constructing a skyscraper. It also touches on the continuous energy usage of inference models that run in the background. The paragraph emphasizes the irony of tech giants advocating for energy conservation while simultaneously contributing to the AI energy crisis. It contrasts the growth in carbon emissions of companies like Google and Microsoft with their sustainability reports and goals, suggesting a disconnect between their actions and their environmental commitments.
⚡ Bitcoin Mining as a Renewable Energy Solution
The final paragraph presents Bitcoin mining as a practical solution to the AI energy crisis. It outlines three key ways in which Bitcoin mining can support renewable energy projects: by making financing more feasible, providing a secondary revenue stream for energy providers during off-peak hours, and being a more flexible partner during energy crises compared to AI data centers. The script discusses real-world examples of Bitcoin mining being used to monetize stranded energy and fund renewable projects globally, such as in the United Arab Emirates, Iceland, and rural Kenya. It challenges the feasibility of large-scale battery storage as an alternative solution, questioning both the environmental impact and the cost of such projects. The video concludes by advocating for Bitcoin mining as a tangible and already implemented method to support the growth of AI in a sustainable manner.
Mindmap
Keywords
💡Electricity Shortage
💡AI
💡Data Centers
💡Energy Constraints
💡Sustainability
💡Carbon Emissions
💡Bitcoin Mining
💡Renewable Energy
💡Hydropower
💡Energy Consumption
💡Inference
Highlights
Next year may see a shortage in electricity due to the increasing demand for powering AI chips.
AI is creating an energy crisis that could lead to a significant increase in electricity bills.
The data center business might be facing a bubble due to high valuations and unprecedented capital spending.
Data centers are built to meet the needs of big tech companies, creating a demand for massive amounts of power.
The energy required for AI is so high that it could affect everyday energy use for appliances and lights.
Elon Musk's quote about not being able to find enough electricity to power AI chips is highlighted.
Tesla's gigafactory in Austin, Texas, is set to become one of the largest data centers in the world.
Tesla, in partnership with Nvidia and Dell, is working on Colossus, the largest AI training model.
Tech giants are contributing to the AI energy crisis despite advocating for energy conservation.
Google's and Microsoft's sustainability reports show an increase in carbon emissions despite their eco-friendly claims.
The global spending on cloud infrastructure is outpacing the spending on new power plants by electric utilities.
AI energy demands are growing at a rate that far exceeds the growth of electricity production capacity.
Training AI models is as energy-intensive as building skyscrapers.
Bitcoin mining is presented as a solution to bootstrap AI and renewable energy projects.
Bitcoin mining can provide a secondary revenue source for energy providers during off-peak hours.
Bitcoin miners can shut off operations during severe weather crises, making them better partners than AI data centers.
Examples of Bitcoin mining helping to fund renewable projects in the UAE, Iceland, and rural Kenya are given.
Bitcoin mining is positioned as a practical solution for funding AI projects and building infrastructure.
Transcripts
then the next shortage will be
electricity so I think next year you'll
see the electricity that they just can't
find enough electricity to run all the
chips there is a capital question of
like okay at what point does it stop
being worth it to put the capital in but
I actually think before we hit that
you're going to run into energy
constraints there's a dark side of AI
that the billionaires know that the
average American doesn't AI is creating
an energy crisis that's going to cause
your electricity bill to to explode
today we'll uncover this dark reality
and propose some solutions for how we
avoid this dark Future Let's Usher in
the AI revolution in a sensible
[Music]
way is there a bubble in the data center
business given some of the valuations I
mean the question is and we we all watch
the reports you know for the big tech
companies how much what's their Capital
spend going to be in the following years
but this asset class is is very unique
for Real Estate the each one of these
buildings could cost four or5 billion do
you're talking about power numbers that
we've never en encountered in the real
estate business 100 megawatt 200 up 500
megawatts those buildings it's so what's
amazing about them power as difficult it
is to get becomes the uh constraint to
new development so you don't have over
supply of these data centers and for the
most part they're built least to one of
the the big hyperscale tech companies
the two obvious questions that should
come from this are where are we going to
get the energy from and who's going to
pay for it these sheer amount of
resources that are needed to provide
compute for another supercomputer are
just going to rob us of everyday energy
applications like our appliances or our
lights or the ability to charge a cell
phone don't take my word for it the
billionaires already know that we don't
have enough energy to fuel this AI
Revolution we do need way more energy in
the world than I think we thought we
needed before my my whole model of the
world is that the two important
currencies of the future are compute SL
intelligence and energy um you know the
ideas that we want and the ability to
make stuff happen and uh the ability to
like run the compute and I think we
still don't appreciate the energy needs
of this technology let's go back to this
quote that we started the video with
from Elon Musk they just won't be able
to find enough electricity to power
these chips well Tesla is one of the
main contributors to this AI energy
crisis that we are barreling into right
now the Tesla gigafactory in Austin
Texas is already the largest car
manufacturing plant in the country and
soon to be one of the largest data
centers in the world to train models for
their full self-driving capabilities in
their Tesla cars in a tweet earlier this
summer he announced that they're
building for 130 megaw of capacity and
soon to be tripling that number in just
18 months this past weekend he announced
Colossus the largest training model in
AI data center in the world he announced
these plans in conjunction with their
Partners Nvidia and Dell and they will
have over 100,000 of the h100 chips
which is nvidia's chip in the most
powerful AI chip in the world the crazy
part about this is they said they did it
in 122 days this is by far the fastest
that anyone's been able to stand up this
amount of energy and compute for an AI
data center project to dat and they're
not the only ones we haven't even gone
into other projects from meta or Google
or any of the other large Tech Giants
the irony is these large Tech Giants
were the main ones talking about how we
need to conserve energy how we need to
go net carbon zero and yet they're the
main culprits in this AI energy crisis
that we're heading head first into I dug
into Google's 2024 sustainability report
and what's interesting about the
sustainability report is there's an AI
insight button which produces more
emissions and makes us less sustainable
but when I asked it the question of has
Google increased its carbon emissions
here's what it had to say Google has
been cost planing us and saying that
they're doing good for the environment
when actually their carbon emissions
have increased 47% from 2019 to 2023 and
you know what Microsoft sustainability
report wasn't much better Microsoft has
increased their carbon emissions from
2020 to 2023 by 30% what's funny is that
when when you look at this chart their
carbon emissions are growing 10% a year
and yet they expect to go negative
carbon emissions by 2030 I'm not good at
math but that math doesn't math to me
the problem is pretty simple Mark Mills
the author of The Cloud Revolution and
AI energy expert said it in a pretty
simple manner that we can easily
understand in dollar terms uh we
spending more money building
infrastructure for the cloud globally
Capital then all the electric utilities
in the world are spending combined
to build new power plants in a nutshell
it's pretty simple digital
transformation is outpacing physical
transformation according to an eel
energy study the amount of electricity
production capacity is growing by about
2% a year through 2035 but the AI energy
demands are growing at 23% a year and if
you think that number is crazy Boston
Consulting groups numbers aren't that
far off they're projecting 50 to 20%
growth a year from now to 2030 the
capacity for AI data center energy usage
is expected to Triple to 72% of total
energy consumption why is that well
there's two types of training there's
training a model which has to be updated
daily and retrained every time there's
new data and there's new information and
this takes about as much energy as
building a skyscraper this training is
electricity intensive taking about 1300
kwatt hours per day to train one of
these models then there's inference
which means means that the model that's
continually being updated and trained is
continually running in the background at
all times that's why a chat gbt search
takes 3 to 30 times as much energy as a
basic Google query and if any of you
have ever used any of these sort of
models in the past you know that it
doesn't nail the answer on the first
time contributing to a larger number of
queries than a general Google search
which has more results on a single page
and the crazy thing about all of this
this is just the AI data Center's impact
on our energy usage we're not even
considering the fact that we want to
have more electric vehicles and we want
to onshore the manufacturing that's gone
overseas to China over the past several
decades so what's the solution to our AI
energy crisis I've Heard lots of things
from our folks that have been talking
about the Green Revolution for several
decades but there's actually a real
practical and already implemented
solution happening all over the world
that is bootstrapping AI generation and
renewable energy projects globally
that's Bitcoin mining Bitcoin mining
helps to bootstrap the AI revolution in
three key ways number one it helps to
make financing these projects more
feasible you see when you're standing up
a large power project or a renewable
energy project typically that energy
source is far away from City centers and
people that actually buy and use that
energy and so the further that energy is
away from these people or the buyers of
that energy the more infrastructure you
have to put in place
Transformers lines CA
all of these things to transport that
energy from the source to the buyer then
you also have the fact that energy
dissipates the more distance that it
travels and so the main issue when
financing these projects is you don't
have a ready and early buyer for this
energy until you've sunk a ton of money
into the project insert Bitcoin mining
they bring the mining machines right to
the source of the energy and they have
an Always On Demand buyer of this
electricity and so you're able to
actually fund and get profits from
projects much sooner than you otherwise
would win-win for everybody number two
Bitcoin miners provide utilities and
energy providers and producers a
secondary Revenue Source let's take a
look at this chart throughout a typical
day peak hours for energy and the costs
of energy are most expensive between
8:00 a.m. and 1: p.m. with the most
costly part of the day being between 4:
p.m. and 10 p.m. when we all get off of
work or if you're in Texas or California
you come home and you turn on your air
conditioning and so the cost of this
energy is unsustainable and not really
good for Bitcoin miners but when energy
usage is at its lowest or off peak hours
from 12:00 p.m. or 12: at night to 8:00
in the morning well then you have a
great time for Bitcoin miners to be able
to come online consume that energy at
more profitable rates for the utility
and energy producers this seems like a
win win win for everyone opportunity
number three Bitcoin miners are just
Flatout better Partners than our AI
overlords when there's a severe weather
crisis or there's a need for people that
actually need electricity to have it
back Bitcoin miners are able to shut off
and turn off at a moment's notice let's
compare this to someone like Tesla who
maybe they have a large AI training
computer that's running in their Austin
Texas gigafactory that's used to program
and provide updates to all of their cars
running their full service driving
technology well what if they need to
make a critical update to all of the
cars that are on the road driving
themselves while you're asleep do you
think that because there's bad weather
outside or there's inclement conditions
that they're just going to turn that off
for the sake of being a good partner I
don't think so Bitcoin miners have
already been doing this and have
demonstrated this capability in places
like Texas and Tennessee for years and
before you think this is just some crazy
Pie in the Sky idea this is already
being done at several places around the
world in the United Arab Emirates
Bitcoin miners are soaking up stranded
solar farm energy and desalination plant
energy that would otherwise be wasted to
profitably fund more renewable projects
in the world what about Iceland where
they have a large amount of potential
Hydro power that's not being monetized
while Bitcoin miners are going near
waterfalls and actually consuming this
energy through the mechanical output of
this Hydro or this water and turning it
into revenue streams that are profiting
Iceland what about a village in rural
Kenya where a company like gridless with
Eric hman is taking Bitcoin miners
straight to a volcano and Mining this
stranded energy in order to build the
infrastructure to power 5,000 homes in
rural Kenya that otherwise wouldn't have
been able to finance infrastructure
projects to transmit that energy out to
those rural places a lot of people in
the Bitcoin industy already know about
cruso energy who's able to slash
emissions by 63% and prevent the spewing
of methane gas into the atmosphere by
literally capturing that flared gas
putting it into a generator and Mining
Bitcoin with it win win win for everyone
there are Bitcoin miners like ter wolf
who use 93% of zero carbon energy
sources in order to fund their Bitcoin
operations through nuclear and through
Hydro there's several other publicly
traded miners like core scientific or
Marathon who've already been capturing
this trend the solution is simple
Bitcoin actually makes renewable
projects profitable the next push that
you're going to see versus real things
that have been implemented in the wild
is projects like what the economist is
pushing ter
battery storage for electricity grids
it's taking us 20 or 30 years to get to
200 megaw of battery storage for grids
but somehow we're going to get to a
gigawatt by 2030 and a terawatt of
battery storage by 2050 I'm not a math
guy but that math doesn't math to me two
obvious questions should arise again is
the actual clean battery storage
projects that are being built are they
actually clean how are you going to
dispose and create these batteries in
the first place coal and natural gas and
the next question question that's
obvious is who's going to pay for it the
Ia will say that we need more batteries
nvidia's CEO Jensen Wong will say that
we need the AI chips to actually be
implemented so that AI can help us
determine whether or not we should have
electricity on it'll help us dynamically
balance the grid that sounds convenient
for someone whose sole job is to sell
more chips Bitcoin mining seems to
provide a real tangible practical and
already implemented solution to how do
we bootstrap these AI projects how do we
profitably build out the infrastructure
to fund this AI Revolution I'm all ears
for feasible Solutions and today I
haven't heard any if Bitcoin mining
isn't the solution to funding our AI
Revolution then what is I'd love to hear
your thoughts in the comments this is
part two of our Bitcoin in AI series I'm
going to be diving deep for the next few
weeks on the implication of Bitcoin as
it relates to an AI future so tune in
next Tuesday on what we're covering next
Bitcoin and AI payments and as always
I'm all about building real Community
Real expertise real connections real
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Journey I've had the pleasure for doing
this for hundreds and thousands of
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we're signing off today hope that I was
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guys this is Dante cook happy stacking
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