There’s a saying I’ve heard that this reminded me of, “if you owe the bank two dollars, that’s your problem, but if you owe the bank two billion dollars, that’s the bank’s problem.” I think it’s relevant because it shows how responsibility shifts as things scale. If you owe the bank a little money then you are just a regular customer and you deal with the bank’s policies. But if you are a big player then it’s up to the bank to negotiate with you and come to mutually agreeable terms.
These companies that have many big data centers are now big players. If they are stressing the grid they will need to be part of the solution in expanding the capacity and infrastructure, either by paying more to the electric companies or by including power infrastructure in their vertical integration. Microsoft has the right idea by investing in Three Mile Island, I think other big players will do similar things.
Unlike banks, grids have an obvious solution to this problem: stop supplying these players with energy when the grid is at significant risk of a black out.
I think many people read my statement and flipped who I thought the banks vs customers are. If you owe the bank $2 billion, that’s their problem- meaning they are exposed and could fail if they don’t negotiate to cover that exposure. If an AI company needs a bunch of power and can’t compute without it, then they are exposed and need to negotiate to make sure the power companies can supply it- they are no longer regular customers.
In my thought process, an analogous statement might be, “if you ask for 10 kilowatts from the power company, that’s the power company’s problem. If you ask for 10 megawatts, that’s your problem. If you (an AI company) ask for a historic amount of power and your business fails if you don’t get it, then it’s your responsibility to ensure the grid can supply that much power.
Every problem has an ‘obvious’ solution on the surface after thinking for ten seconds.
Data centers/supercomputers/similar facilities have agreements to ensure uninterrupted power.
The grid would sooner cut off residential power than risk running foul of SLAs.
Most developing countries are very familiar with this, the technical term ‘load shedding’ having entered common parlance because of the frequency of power cuts faced by consumers.
Banks have an obvious solution as do grids. Build their reserves and infrastructure and scale to their biggest customers. A stressed scale out system just requires more scaling. It feels weird to say any other solution, especially when the customer is a paying customer.
It only feels weird if you consider paying customers getting what they want has to be of the highest priority.
Others who are regular readers of IPCC publications might value the survival of big parts of earths habitable zones and the most densly populated costal areas higher. But priorities differ.
Except bitcoin had no practical value. I think only the most jaded think AI has no practical value. Most lucid observers recognize there’s immediate value and the future is either “a lot of value” or “mind boggling amounts of value,” or some middle ground. Most lucid observers of crypto realize its primary value is in sanctions evasion, money laundering, and other illegal transactions. Not saying no one finds practical value in that but it’s not broadly useful to society.
AI has a similar amount of value as bitcoin in its current form too. Guess I'm just jaded, but AI is broadly an arms race to nowhere and unlike bitcoin there is no value provided from past energy expenditure, the older models become useless after newer ones are published. This cycle will continue until money stops pouring into the market sector, we won't reach a true AGI in this cycle like some suggest, this is all purely fueled by hype.
A trillion dollars of market participants disagree with you, now including institutions and banks
I happen to agree that Bitcoin has very dubious utility, but I suppose it has nailed the "store of value" use case, whereby you can send it anywhere without any friction, and also if you need to, say, escape the country during war or a natural disaster, it's much easier to remember 12 words than try to sneak gold through customs, while the cash you store in your house might be underwater. Bitcoin for many institutions is a digital commodity to diversify for tail risk etc.
Financial institutions will make money by intermediating anything that has a market. Meanwhile, escaping with assets during a war and evading customs is a an example of "sanctions evasion, money laundering, and other illegal transactions"
It is not a big deal to the US government or Apple for example. It is something they rather avoid of course but it doesn’t threaten their existence the slightest.
The data center is paying the grid’s bills as well.
And that single customer is paying more than likely millions of other customers.
Notably, if the grid has a good PR/marketing department, those customers are a lot more likely (individually) to take a black out ‘for the greater good’ than the data center.
See California’s rolling blackouts, etc. in the past.
there is not and should not be an "open market" for power. the sale of electricity from the power grid is highly regulated, and for good reason. delivery to residential customers and essential services should always be prioritized over industrial bulk purchasers.
bulk purchasers already have the opportunity to use power sources that are not connected to the grid, if they want to use grid power they should be prioritized according to their benefit to society, not their cash on hand.
> they should be prioritized according to their benefit to society
The fact that they have the capability to pay for and consume this power is the strongest signal that they are indeed providing value to society. The money comes from somewhere. If that turns out not to be the case, they have the strongest incentive to stop.
But this sort of rationing at the hands of some regulatory body has historically proven to be a far more deadly cure than whatever the presumptive disease was.
That argument would require regular socialization and redistribution of all wealth. The market does not prioritize what the society needs, because individual needs are weighted by wealth and income.
In a Western society, everyone's needs are supposed to be equally important. We often don't even make majority decisions, because we assume that the constitutional rights of a minority are more important than what the majority finds reasonable.
> The market does not prioritize what the society needs
What do you think prices do? What do you think income is reflective of?
Companies that make lots of money provide things that lots of people are willing to pay for. This is the reflection of what people need. Exxon makes money because people want to stay warm. Cargill makes money because people want to eat. Apple makes money because people want to be entertained. Eli Lilly makes money because people don't want to die.
What do you know that millions of people all acting in their own self interest don't know?
Parent is saying that people with more money can affect the price signal more. That simply isn't as fair as weighting individuals equally. A lot of people don't like the economic impacts of this, so they tend to justify it rather than accept it as valid criticism.
> What do you know that millions of people all acting in their own self interest don't know?
That education of the poor is important, perhaps?
In reality, I'm pretty sure they do know that. Which is why they vote for politicians ensure the poor are educated, regardless of the fact that that can't necessarily pay for it at the time. They don't rely purely on laissez-faire capitalism to determine all our social policies.
A weighted average can be very different from the unweighted average.
In our current society, children can benefit from the wealth and social connections of their parents. That gives the needs of some people additional weight in the market without any actual merit. To get rid of that market distortion, children would have to be raised collectively without any contact to their parents.
There is a lot of wealth that has been created with business practices that later became illegal. Because we prefer not to punish people for actions that were legal at the time, we let people keep that wealth. But if we want the market to prioritize the needs of the current society, such wealth would have to be confiscated.
A society where the market actually reflects the needs of the society would be incredibly dystopian.
right, hospitals and farmers should just massively raise their prices so they can better compete with crypto miners, that will make the world better...
money is not a good indicator of value provided to society. there is a ton of ways where it falls apart, and there are a lot of people devoted to finding the ways they can collect the most money while providing the least benefit to society.
This only hold true in relation to the economy if you say every person has the exact same wealth. This isn't true in capitalism and is (arguably) the reason capitalism exists. Such a system, however you choose to develop it, would invariably be closer to socialism in spirit.
Spotting and stopping the odd case where it’s gone haywire doesn’t mean ditching market pricing across the board. You can just fix (maybe even only temporarily!) the part that’s doing wacky, undesirable stuff.
we don't need to invent a whole new economic system. we can just say "this is bad, and we should do less of it". and making sure that power goes to people's homes before it goes to datacentres is one of those things. and the best part is that's the way the world already works, so nothing even needs to change.
The problem with these conversations is that capitalists seem incredibly brittle-minded. Meaning even a small, and fair, critic devolves into "oh so you want communism?"
Public vs private isn't black and white, it's a spectrum. Energy providers sit on this spectrum. In some way, they're public infrastructure. In others, they're private companies. Slightly pushing them more towards "public" via regulation is what we HAVE been doing for a long time. This shouldn't be setting off your communism senses. If it is, you have a fundamental misunderstanding of how the economy works in regard to these kind-of-public-infrastructure goods and services.
It's providing value to whoever is spending the money. Right now, that's "investors". We'll see about society. If it provides that much benefit to "society", what is the activity that benefits? It's not just going to be people knowing things, there is a finite limit to what people care about. If the outputs from AI drive increased economic activity, that'll be reflected as increaded energy usage. Which will likely dwarf the AI's usage.
The Environmental Protection Agency (EPA) has many accomplishments, including:
Reducing air pollution
The EPA has reduced air pollution by regulating auto emissions, banning pesticides, and cracking down on factory and power plant emissions. New cars are now 99% cleaner than 1970 models, and the EPA's efforts have led to a decrease in smog and asthma cases.
Cleaning up toxic waste
The EPA has cleaned up toxic waste through the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund), which provides funding for cleaning up abandoned waste dumps.
Protecting the ozone layer
The EPA has protected the ozone layer by reauthorizing the Clean Air Act in 1990 to phase out chemicals that deplete it.
Increasing recycling
The EPA has increased recycling.
Revitalizing brownfields
The EPA has revitalized brownfields, which has led to increased property values, reduced impervious surface expansion, and reduced residential VMT.
Reducing water use
The EPA's WaterSense program has helped Americans save water, with a cumulative savings of 8.7 trillion gallons as of the end of 2023.
Banning cancer-causing pesticides
The EPA has banned or restricted many cancer-causing pesticides, including heptachlor, chlordane, EDB, daminozide, and chlorpyrifos.
Testing schools for asbestos
The EPA required all primary and secondary schools to be tested for asbestos starting in 1982.
Rating energy efficiency of appliances
The EPA introduced the Energy Star program in 1992 to rate the energy efficiency of household appliances.
EPA History: Documents about Agency Accomplishments | US EPA
Nov 17, 2023
And sure, tell them they get disconnected first when there's a shortage. But a hard block is worse than taking their money and using it for improvements.
>delivery to residential customers and essential services should always be prioritized over industrial bulk purchasers.
This is not how the grid works in the US. Industrial is very frequently critical and gets higher priority over residential. Outages at major industrial operations can cost millions in lost revenue and can cause direct damage to hardware.
The grid absolutely is a market and should be. Reliable power at fixed prices is a thing you can try to buy from it, but that’s by no means guaranteed.
...but generally not a free market in most jurisdictions. The Texas grid is an ongoing experiment, and yet even the Texas legislature had to step in to bail out[1] providers' massive losses from with very high energy spot prices - it turns out the demand for energy is pretty inelastic at below-freezing temperatures.
1. Via a surcharge on all future customers. That's not very free market of them.
What do you mean it’s not a free market? In the western grid I can absolutely contract for access to the grid without any kind of government intervention. So it’s definitely a free market in who can buy and the price is negotiated.
In Texas it’s just a different pricing structure with instantaneous pricing. That’s not more or less free market.
The state government stepped in to socialize the losses incurred by private companies during the last snowstorm. Perhaps we can call it "Free markets with Texan characteristics"?
> Are you suggesting it should be illegal for these players to buy energy on the open market?
Part of the problem is the AI companies are unwilling to sign long-term power purchase agreements. That means the utility is on the hook for both the capital cost of the development and the risk of unloading a bunch of excess power if the tech company decides to relocate.
A lot of the AI companies are also the major cloud providers, i.e. existing large consumers of electricity.
Google could entice someone to invest in generation capacity for a new AI datacenter by agreeing to buy their output for a few years, or building their own generation. Then if the AI thing doesn't work out, use that power for their existing data center uses, i.e. move the existing servers into the AI data center. That would be essentially shifting the risk to the power company in the location where the existing data center is, even if that's not the same one they have the power purchase agreement with.
> may also be circumstantial evidence that they don't quite believe all their own hype
No company, particularly one with negative cash flows, wants to saddle itself with long-term liabilities.
There might an opportunity for useful financial engineering: instead of a fixed power purchase agreement, one which floats and is married to a no-shop commitment.
For example: start-up agrees to purchase 10 units of power at a fixed price for 10 years. It has the option of only purchasing 9 units, but must pay a 20¢ fee on the unpurchased power. In this way, if the start-up hits a rough patch, the burden is shared in a way that is meaningful to the start-up's surival probability. In exchange, the start-up commits to not reducing its power purchase while ramping up usage with someone else, presumably at a lower rate, and, once lowered, commits to ramping up its usage with this provider before ramping it up with anyone else.
Now here is the critical part: the utilty doesn't hold that risk. Instead, it pays a fee to a hedge fund or endowment or whatever by which that party agrees to make up the 80¢ (or some fraction of it) on unpurchased power.
In summary, the utility winds up with a reliable cash stream in all worlds except the start-up failing. (One could mitigate that risk by requiring some pre-funding.) The start-up gets a long-term, guaranteed-price source of power. The hedge fund gets a weird financial thing to play with. (A natural provider of that guarantee would be one of the tech giants. I like the idea of it going into the market because one can see those contracts being aggregated and thus diversified.)
For emergencies, there are already methods to shut off power to low priority businesses. And say, keep hospitals open.
And, if you want to pay, you can pay a premium to have more 'secure' power. This is an option today, already. No need for any discussion about markets and 'government is holding back the free market'. There is already a market to pay for premium power. And the utilities can charge AI customers more if they want.
this is actually a major problem in the netherlands at the moment.
a part of the energy grid cannot handle the load being generated by all the solar being deployed, and upgrading the grid takes years.
In the meantime, bussinesses and even households simply are not getting a new power connection unless they are deemed of enough importance.
Markets are neither open nor free, they are closed and regulated. So yes, block their purchasing, tell them to sort their own. Here's the thing, do you cut off one customer when supply is tight or do you risk political suicide by kicking the bucket to millions of small customers? Power utility companies will kick one customer, if they don't they will lose their social license to operate and get legislated out of business.
the grid gets to choose how it prioritizes power. if they want too much power at a time the grid doesn't have enough to go around, they're likely fairly early on the cutting block
The suggestion is that they can buy it at certain times, but not when the grid is nearing capacity. And yes, that's a perfectly reasonable thing for a society to decide.
It's shared infrastructure, mainly paid for by public funds. If a government decides the priority should be the millions over the few, that's what happens in a functioning government.
Or they can pay for their own power stations and infrastructure to be built.
Energy should not be an open market. It has been given unbelievable amounts of public funds and is public infrastructure.
We should work out a mutually beneficial agreement - I think it makes no sense to nationalize energy providers off the bat. But, part of that agreement should be ensuring energy for residential areas. And if that requires cutting off energy pigs in the meantime, so be it.
AI jerks will just start putting big red crosses on their buildings, open one 10'x10' space in their facility with some barely passed the exams to get a license type of doctor and claim it to be a medical facility of some sort. Just like other hospitals, they'll have a shortage of beds.
I'm only half joking as from what I've seen of those involved, I would not put this type of consideration past them.
No, but we should have a discussion about if it is worth it to expense so much energy for something with very little hard, real use case. Al be it bitcoin or LLM's.
there is a lot of money behind AI, but i have yet to see any of them actually get us a use case which work reliably.
Not to mention, AI is fun and all, but that energy could be far better spend making the economy less reliant on fossil fuel.
I think you might misunderstand your analogy. If you owe the bank two billion dollars it's their problem because a missing 2 billion dollars is large enough to be painful for the bank.
I think you and the original metaphor maker are still not seeing the failure of the analogy. The bank with a $2B default gets bailed out by taxpayers and the billion dollar borrower gets bailed out through bankruptcy court—also the taxpayer. The person borrowing $2 screws themselves, and the same person borrowing $2 gets to bail out the bank and billion dollar borrowers.
And the bank stands to lose far more money than the company they have lent to who will just fold.
In renewable energy it is actually common for the funding institutions to be paid a cut of the profits and to have no recourse to repossess assets. They take all the risk because they provide all the funding. The job of the actual developer is to provide a project worth funding.
In a vacuum, your bank metaphor is solid. The problem is that these energy demands don’t exist in a vacuum, nor do the consequences of consumption.
To expand upon your bank metaphor, let’s say the bank are energy utility companies, and the customer that owes $2bn is Company A. Yes, this is the bank’s problem in a vacuum because it needs to remain solvent for its other customers (provide energy) while still collecting on its owed debt (the power bill from Company A). However, the bank also has an obligation to reduce the total amount of currency that changes hands in the first place (reducing energy use) or finding more efficient ways of exchanging that currency (renewable energy). With that broader scope in mind, Company A charging $2bn in debt isn’t just a problem for the bank, but a problem for that bank’s customers, and any customers of any other banks that do business with the affected bank.
In other words, the problem isn’t merely hyperscalers and generative models gobbling up vast amounts of power or purchasing nuclear power plant capacity, it’s that we sorely needed that capacity to wind down total fossil fuel usage and to focus on efficiency of resource usage until we addressed the climate crisis. That’s where I (at least) have a beef with the current state of datacenters, hyperscalers, and generative models. So long as compute remains insanely cheap and “infinite” in scale, we lack any incentive other than financials to reduce consumption or increase efficiency. And financial incentives only work as long as the penalty is significantly more expensive than the insurance.
The best outcome for all of us is for tech companies to get into power. Tech got into telecom (dark fiber, undersea cabling) and provide free services (youtube, gmail, etc), which used to cost a lot historically. Everyone had to shell out a few hundred dollars/month just for phone calls (billed per minute) and txt messages. Now, we are at a point all communication is free. We can do video conferences with upto 100 people worldwide for free.
If tech companies get into power and break down the regulatory capture of utilities, they can make money off of energy storage and virtual power plants while providing free power for people.
The geometric decreases in cost that you cite (in terms of communications and SaaS) are due primarily to Moore's Law. Unfortunately there is no similar law affecting power generation costs.
If tech companies got into power, the inevitable result would be that they embrace and extend the regulatory capture of utilities, with the explicit goal of maximizing their profit at the expense of human needs. As well as of course the evisceration of as much pesky environmental regulation as their lobbyists can get their hands on, to the extent that it serves as an impediment to this paramount goal.
Solar has its own Moore’s Law called Swanson’s Law which shows that solar has been decreasing geometrically in price.
In power generation there is little appetite for innovation from producers since they are either monopolies or government agencies. So instead all innovation has been going to local generation like solar and wind.
>As well as of course the evisceration of as much pesky environmental regulation as their lobbyists can get their hands on
As if any tech company would build anything but solar. You don't need to bend the rules here and you don't need too much storage either. You just need cheap land, a fuckton of solar to get your peaks to your base consumption and you already do 60% of energy renewable. Anything above that is battery storage and more land.
It's such a no brainer in cost and from an operations PoV the only thing that is easy enough to go into power.
Meanwhile, both solar and wind also have their environmental externalities (from the mining of raw materials, to the sheer amount of land that needs to be put under shade for solar farms, and the noise pollution caused by wind farms), and correspondingly, tons and tons of rule for these companies to bend.
I imagine they will just finance their own small nuclear reactor plants probably through power purchase agreements in whatever states which will allow them to do so. Those states will be where the new data centers and jobs go.
They're not going to build a second grid, or power plants for everyone else. That's an awful business. These companies are in good businesses. They don't want to get into an awful business.
There's so much wealth to be created given the multiplier these SMNR companies are likely to have. And the tech companies will invest in the SMNR companies they purchase power from. Some of them are already invested.
Hopefully, they'll have enough scale that whatever they need to do makes it cheaper for the grid at large.
I think this is what you are saying, but to clarify, they will not own the power infrastructure. Execs from Google and Microsoft have already said this[0]
Microsoft have already entered into an agreement with Constellation Energy which pays to restart one of the reactors at three mile island. This comes with a 20yr purchase of the power from that plant.
There aren't many usable and idle nuclear power plants sitting around. It's extremely likely, as you point out, that states will soon be competing for jobs by offering land for both data centers as well as new power plants.
The best estimates I've seen but new construction of nuclear plants at 5-7 years. If this could safely be sped up then I assume big tech is already working to make it happen.
Of note, there are already some third parties/regulators working to stop big tech from capturing large shares of existing power generation[1]
Telecom is not more affordable today than it was in 1990. Back in 1990 the private phone line we shared at home for a family of 4 primarily to support connecting to local BBSes and the internet cost $20/month, or roughly $48.65 in 2024 dollars. That $20 was enough to be able to send and receive email through Fidonet and UUCP, download software and connect to the local Freenet for internet access. Today's telecom spend is on the order of $250/month once a cell phone, landline (since there is no cell phone service here) and internet connection are all included. That's pretty much a factor of 5x increase in telecom spend required for a family of 4. Sure, we can do a lot more, but it's not cheaper when directly compared to the historic cost of telecommunications services.
I don't think tech getting into power will make things better. Just look at what is happening in Texas and other parts of the world: grid operators have to pay bitcoin miners to turn off their farms when grid capacity is overwhelmed, which drives up cost for everyone. Depending on where data centers are located, construction of new transmission lines becomes necessary. All this increases the baseline operating cost of the grid. Personally, I don't want more AI generated content or timelines powered by AI driving toxic engagement because it gets more clicks. The "improvements" we're seeing now are beyond the point of diminishing returns. Tech will abuse any externalities that exist worth exploiting, and society will end up paying for it.
Handwaving away all the additional utility seems unfair to me. These pipes are a lot fatter, more accessible than ever before, and there are many more ways to use them. Working from home, eliminating shopping trips, telehealth, video calls, online banking and bill pay, podcasts, maps, music, gaming, the list goes on and on.
If you're "cord cutting" and not paying for cable TV anymore, then you likely still come out ahead even after folding a couple of streaming services into the mix.
If all you have are 1990 expectations, then you should be able to make do with something for about $50/mo, maybe less. Either a cheap phone plan, or entry level internet and VOIP. And it'll still be leagues more useful.
That private phone line you shared could only be used by the one computer in the household, if there even was a computer, which more often than not there wasn't, and when it was online, you couldn't take phone calls, which was more of a problem than now, because it was 1990.
And we don't live in fear of our telephone bills like we used to. We don't charge long distance, by the minute, or per text. Data caps are annoying, but they're not life-changingly expensive, and hey, if you're living it up like it's 1990, you'll never get anywhere close to exceeding them anyway.
I believe Microsoft is currently doing just that, reserving the output of Three Mile Island. The article was here on HN around a week ago.
I don't necessarily see anything wrong with that, and I can see the communication of demand changes back to generation being useful to those running the plant(s).
Microsoft's commitment allows Constellation Energy to restart the 819 MW nuclear fission reactor at Three Mile Island. This reactor operated without problems for approximately 45 years and was switched off in 2019.
Nuclear fission is the only clean baseload power source mature enough to be widely adopted. Today there are 440 nuclear fission reactors operating in 32 countries. Having used fission reactors for 70 years, we know how to build them and operate them at 95%+ efficiency (https://www.energy.gov/ne/articles/what-generation-capacity). For example, Vogtle 3 and 4 have been operating at 100% of their capacity.
In contrast, solar and wind are not baseload power solutions. They are intermittent and unreliable, fundamentally weather dependent. If you have battery backup sufficient for time T and the weather doesn't cooperate for time T+1, your data center is offline.
Furthermore, even a day or two of battery backup eliminates the cost advantage of solar and wind. As a last resort, fossil fuel backup plants can be built, but building them is costly and using them is dirty. See Germany's power grid for an embarrassing real-world example.
Solar + wind + batteries is an intrinsically unreliable, unacceptable solution. Please see Yann LeCun's comments, reflecting Meta's view on this topic: https://news.ycombinator.com/item?id=41621097
>solar and wind are not baseload power solutions. They are intermittent and unreliable.
Being 5x cheaper more than makes up for that though.
None of the viable modes of storage (pumped water, hydrogen, batteries) are expensive enough to make paying 5x per kilowatt hour worthwhile any more.
If you roundtrip solar and wind via hydrogen stored for months and back into electricity again (the most expensive mechanism), it's still cheaper than every single kilowatt hour of nuclear power delivered on the sunniest, windiest days.
It really is difficult to overstate just how mind bogglingly expensive nuclear power is. Unless it's used to cross-subsidize the military nuclear industry it just isnt worth it.
Firstly, we should probably not start by building a mathematical renewable energy model that presumes wind energy doesn't exist. Storing solar energy for use while the wind is blowing hard is a bit pointless and vice versa.
You don't store energy from solar on a sunny winter day to use at midnight when the wind is blowing hardest and consumption is lowest. Your store energy to use on those rarer hours when it is neither sunny nor windy and when consumption exceeds the production of both.
This can be done cost effectively and at scale in two ways - 1) by pushing water uphill for short term storage and 2) by manufacturing hydrogen and storing it underground for longer term storage.
So, you combine overproduced solar, wind, pumping water uphill and electrolyzing and storing hydrogen to match demand with supply.
Solar and wind and their transmission are distributed. This makes them poor terrorism targets. A nuclear plant, on the other hand, is a great target for terrorists.
>I feel sure Ontario does not have nuclear weapons ambitions.
Canada actually used to be a nuclear power until 1984. Since then it has signed up to the NPT and disavowing weapons but maintaining a nuclear industry that would let it spin up a nuclear weapons program in a hurry should it deem it necessary (i.e. if the American nuclear umbrella faltered).
There are several countries around the world that follow a similar policy - Japan, South Korea, Sweden, Iran. There's value to belonging to the NPT but there's also value to being able to get a nuke in months if an existential crisis presented itself (as it has for Iran).
>Do you have any examples of this at commercial scale (hundreds of MW) and their costings?
> Canada actually used to be a nuclear power until 1984.
No, it wasn't, except in the sense that Belgium, Italy, the Netherlands, Germany, and Turkey are nuclear powers today. It was a participant in a nuclear sharing agreements (under the auspices of NORAD, rather than NATO like the other countries) where US-owned and controlled weapons were deployed at Canadian bases, under control of the US military, with plans for transferring them for delivery by Canadian forces in the event of war. It never had its own nuclear weapons or, AFAIK, nuclear weapons program
Page 28 is informative. 220-235 USD/kWh for a 25% blend of unsubsidised PEM hydrogen, or 210-221 USD/kWh a 25% blend for unsubsidised alkaline hydrogen.
>In contrast, solar and wind are not baseload power solutions. They are intermittent and unreliable, fundamentally weather dependent. If you have battery backup sufficient for time T and the weather doesn't cooperate for time T+1, your data center is offline.
ok so weather is predictable and highly accurate for at least 3 days in advance.
You are still able to buy energy from markets.
You can still load battery storage in case of bad weather forecasts.
I don't know what the problem is here? Why do you paint a scenario where data centers magically are now off the grid and have to be on 100% reliable energy sources?
Knowing how and being politically prevented from doing so are entirely different things.
It’s nuclear or fossil fuels until an order of magnitude change in chemical storage.
No one is going to be building enough gas peaker plants sitting idle 360 days a year to achieve the reliability of the grid most consumers and modern civilization require. So it’s burn more gas or coal on a regular basis or enjoy power outages if you want what we have today.
I love solar. I plan to have a week or so worth of battery at an off grid home someday soon. It’s both entirely financially impractical (yay disposable tech income) and I will still back it with an expensive propane generator since I live over here in reality.
I think there is a small matter of national/international politics (running nuclear as renewables backup), a lack of focus within EDF and perhaps a dash of French industrial action (at least a go slow on the refuelling outages).
Who is building and operating a plant (these need to be more or less 1:1 per MW to back your intermittent power sources) that sits idle 95% of the time? That would be a pretty interesting pitch deck.
That’s a pretty damn low utilization rate. The cost per Mwh would make the Texas polar vortex incident look downright cheap. Or you’ll be having the government build and operate idled natural gas (or coal!) plants via taxpayer money since investors are generally not quite that poor at math. An idle plant still needs the same number of staffing and engineering as one operating at 90% capacity factors, before you even begin to look at capex.
Perhaps that will happen. Running your baseload generation balls to the wall at 100% seems to be a far better use of capital to me, and have your cheap intermittent power sources fill in for those peak loads that don’t require reliability.
I can come up with all sorts of great ideas on how to utilize spare solar capacity. None are financially practical in the scale of a human lifetime at a societal level, even with a magic wand to instantly enable the political will to do so.
Humans continue to amaze me with their inability to account for tail risk. The same political magic wand makes nuclear viable within a decade or two, accounting for said tail risk within it.
That said, the current unserious political climate gives me zero hope any solution will be found, so I’m simply preparing for semi regular power outages becoming a thing within my lifetime.
> Who is building and operating a plant (these need to be more or less 1:1 per MW to back your intermittent power sources) that sits idle 95% of the time?
It does feel like an inefficient use of capital. My best explanations for intermittents are
1) they are fuel savers, making natural gas cleaner by having them run less;
2) they siphon money into the generator’s pockets (from taxes via the Inflation Reduction Act and other subsidies, from other electricity generators via renewable energy mandates, from the utilities via rooftop solar which reduces the consumption when energy is easier/less costly to produce).
You nuke fans always conveniently leave out the costs of cleaning up the mess that the civilian nuclear generation program has already created. Last I heard it was about half a $T.
It wasnt tech companies that "got into telecoms", it was telecoms that overbuilt infrastructure which tech companies later bought up for a song when the bubble popped.
This is a "workable strategy" only if you can find a sucker to eat the losses.
The big tech companies are already “into power” - they (Google, Apple, Microsoft, Amazon, etc) are constantly investing in power projects close to their data centers and manufacturing hubs.
>Everyone had to shell out a few hundred dollars/month just for phone calls (billed per minute) and txt messages. Now, we are at a point all communication is free.
Not sure where you are but where I am you still have to pay for cell phone data plans and internet to the house.
Dear sirinsalot, we regret to inform you that this post is not in line with our community guidelines and as such we have temporarily suspended your power. Please speak to our AI representative if you wish to appeal this decision.
So it'd be better for these companies to not pay for their own resources? It's better to let Microsoft consume so much power that it browns out the local grid? And what, we're all suppose to just hope that the utility companies fix it for us with taxpayer bailouts and massively increased residential power bills?
I think you were too busy chugging that contrarian kool aid to spend even one moment thinking about what you're arguing for.
Everyone having an engine surrounded by two tons of metal has done untold damage to our built environment and social fabric. So this isn't even a joke.
Having lived in a country where only lucky few had personal cars, I would not agree at all. Social fabric of a society where people can expect some privacy and personal autonomy in their commute is certainly a better one.
Jury decides to change their verdict after being algorithmicly sentenced to 90 days in jail for using the wrong exit in the court building as they were being released from duty by the court officers.
CEO of VerdictAI is quoted as saying “shit happens, if they have any value as humans they would have enough money to get out of this, so the AI must be right. One must not lose sight of the fact that we have freed Americans from millions of hours of manual labor with our InmatesAI volunteer workforce.”
Maybe I’m making assumptions a rather than making an inference, but this seems like the perspective of somebody who wants to stop development of future technology altogether because of bad actors.
I’m not saying there aren’t concerns, but risks can be mitigated and precautions put into place to prevent catastrophes. Stopping development because of valid concerns is not the right move. It’s not even the right move to stop developing weaponry which has a stated goal of causing direct harm to other humans.
There are people in the world who will attempt to do these things and much more dangerous things recklessly and with far worse intentions than making money, and if those people get technological and military superiority over The West, the world will look very different than it does today. There are a whole lot more ways the world could be worse than it could be better.
The current world order is not ideal, but think about what the actual long term outcome is if The West stops.
“Stopping a small number of incredibly over-resourced people from externalising consequences for their sole gain and causing significant and long lasting woe and damage on the rest of us” != “stopping innovation”
Nobody is saying “uh uh, no more problem solving”,drawing that conclusion would be uncharitable at best, and “wrong” at worst. The argument is “gosh, maybe we could have some innovation that’s actually useful, and not some polished-turd/enshittification”.
I’m not sure you’re making the same argument as the others in the comments above. I agree with your comment aside from your characterization of the others comments.
We’re still a democratic republic that can stop the enshittification of utilities (or whatever the problem de jour is). There are bad actors, but by and large, things are working and continue to be improving. Some things need to be bolstered, some things need to be replaced. Stagnation is not the answer.
What would you propose as the solution? All new ideas go through a centralized approval process? That experiment is already being run in other countries. If they start winning, the US will adapt or die.
We can innovate our way out of it. I don’t want to imply that anthropogenic climate change is not real, but the topic is moot anyway because world has been through much more dramatic climate change before without the help of humans. Sooner or later, with or without anthropogenic climate change, we would be forced to solve all climate change or die as a species.
But always always with Mus-informed grand intentions of changing the world for the better.
All we need is another market to solve every problem! It makes everyone with power and money happy, they love markets because they are experts at fucking everyone every way possible. Thats how you build inter-generational wealth!
Communication is not quite "free", but it is effectively unmetered. Compare with pre-internet communication, where "long-distance" calls (outside your area code) were billed per-minute. An hour-long conversation with your boyfriend who lived an hour away? $5. Across the country? $10. Across the world? $100.
For data, Compuserve charged $5/hour for access, regardless of whether you used 300bps or 28.8kbps. So a 1MB download could cost anywhere from 50 cents (28.8k at night) to $10 (2400bps during the day). And that was in addition to the cost of having a phone line in the first place, not to mention the hardware--a decently fast modem cost several hundred dollars, and needed to be replaced every couple of years as the tech was improving relentlessly.
A service like Youtube with on-demand streaming video of just about any content you can imagine would certainly be worth hundreds of dollars a month. Hell, cable television with 50 channels was $30-50/mo (or more depending on whether or not you splurged for HBO/etc), and that was whatever grab bag of content they decided to include.
Remember too that all these are 1990s prices, so you need to at least double them to account for inflation.
> Communication is not quite "free", but it is effectively unmetered.
Yet we're in a conversation about data centers, and our concept of "unmetered communication" only refers to one end of the line.
What does it cost companies and orgs to communicate with us? What does it cost them to keep a server operational, functional and sending data to us? It's "free and unmetered" for you to watch YouTube, run yt-dlp, put up your ad blockers and PiHoles, but what cost for everyone but you?
I would also consider time/effort costs in communicating. Compare having a rotary-dial phone, the ultimate "thin client", with a general-purpose computer or smartphone. How much time and effort do we put into fiddling with them, upgrading them, fixing settings, troubleshooting whatever communication software is on top of them?
Newspapers cost us $0.25-$1.50, but that's a highly subsidized cost like riding public transit.
Relative to the beginnings of the internet, your current internet bill is closer to "free" for communication than just about any other time in history. In 1996, AOL introduced their "unlimited" dialup plan. For a mere $19.95 / month, you too could browse the information super highway at a blisteringly fast 56kbps. At today's prices, that would make it $40 / month. But that was their unlimited plan. In 1995 AOL charged you $9.95 for 5 hours and the $2.50 per hour after that each month. Assuming you wanted 24/7 access like we all do these days, AOL would have cost you ~$1,800 per month, or ~$3,700 / month in today's money. Even assuming you don't want 24/7 access, the average internet user today supposedly spends 6 hours a day online[2]. Even at that rate you're still looking at ~$435 / month (or $898 / month today).
And that was just your access costs, you still needed to pay for the phone service. According to the FCC[1] you could expect to tack another $20 / month on to those costs, just for your local phone service. And all of that would have probably been enough to service one user online at a time. If you wanted multiple people in your household to be online at the same time, you at a minimum are going to want multiple phone lines, never mind the additional hourly access charges.
Off topic, if 'Three New York Cities' has the dimensions of power, and 'Three Mississippi' has the dimensions of time, we've got a starting point for a new system of units...
Wyoming being a near-square state, a Root Wyoming would be the unit of length, and a California a unit of temperature, calibrated to the Death Valley record.
Are these AI companies already profitable or is it speculation that's causing them to get a ton of funding? AI is such a polarizing subject and I find it difficult to sift through all the hype and hate surrounding it.
This mostly depends on what you mean by "these AI companies".
If you're only referring to the big players creating foundation models, like OpenAI and Anthropic, it's mostly speculation of future improvements and revenue, because the amount of money they've raised pretty much requires massive returns. This is similar to how most venture capital works, e.g. Amazon was laughed at for being unprofitable for the first, what, 10 or 15 years of its life.
If you're referring to a broader set of AI companies, then most of the more "normal" AI companies have raised far less money, and are usually eyeing more clear use cases and are sometimes already generating real revenue. For them, I'd say it's not all speculation, a lot of it is productizing and monetizing this new technology that's come along, and is the obvious "low hanging fruit" that actually needs to get done.
> If you're referring to a broader set of AI companies, then most of the more "normal" AI companies have raised far less money, and are usually eyeing more clear use cases and are sometimes already generating real revenue. For them, I'd say it's not all speculation, a lot of it is productizing and monetizing this new technology that's come along, and is the obvious "low hanging fruit" that actually needs to get done.
Most other noticeable(drummed up in news media and various other prominent online media) are mostly wrappers around big players' APIs, more commonly OAI. I have seen some using Mistral(mostly nerds), but if I were to say that if OAI sank, a broader set of AI SME will sink with it, because they are symbiotic.
There are some covert "old fashioned" AI companies I know of, who are still stuck at previous era CV(majority) suddenly gained a lot of interest(+funding), but they are more well positioned to continue revenue generation compared to the more hyped smaller ones.
Point to one single transformative invention that was accretive from day one. The ChatGPT moment isn't even two years old. I don't know for certain whether any of these investments are going to work out, but all of the current cash burn is forward looking. It may all come crashing down, but this is not the right analysis.
This certainly the model that basically all VC funded tech companies use. Though OpenAI is notable, because I don’t think we’ve seen another company burn this much money this fast.
Not a value statement on whether is this is right or wrong.
This predates modern VC by centuries. Early trade routes which connected humanity across continents were highly speculative, requiring huge amounts of capital, and were only profitable years later.
Yes, that single load took years. It required huge amounts of speculative capital, years of fruitless exploration, and as you say, multiple failed expeditions before it succeeded.
each ship lost was maybe $10-20 million and years exploring were performed by a couple of ships operated by dozens of skilled workers with a very clear path to profitability and timeline (succesful journey to india/americas, and in under 2-3 years).
That's orders of magnitude less than the thousands of employees and billions of dollars being deployed with no clear business model or profitability in sight.
all inventions are accretive from day one, in the majority of historical bubbles the speculation was built on top of already profitable technologies but there was always one or two firms that were profitable to begin with. Modern bubbles (AI, Metaverse,Crypto) are speculative from the word go, there isn’t a single company that’s profitable in those verticals.
But what was the cost of producing that revenue? At what point do they expect to break even on their investment?
I can very quickly generate a lot of revenue if my investors will let me buy eggs at $0.50 each and resell them for $0.05, but I don't think I'd get any bites unless I could explain how that enterprise will eventually turn a profit.
But this is what the food delivery companies were (are?) doing. This is what Uber is doing. This is pretty much what every VC funded company does. They burn through the investors' money (because who cares it's not their personal money) until they get a foothold.
> They burn through the investors' money (because who cares its not their personal money) until they get a foothold.
Otherwise known as investing. Sometimes it works. Sometimes it doesn't. And the last 20 years has been chockfull of excesses absolutely. But Uber is profitable these days, and has genuinely transformed how people get around. It looked like a negative unit margin dog until it didn't.
This isn't quite dumping. It was more about achieving the scale necessary to make it usable. If there are no drivers, there are no customers. With no customers, who would drive?
It is indeed dumping. Scale out so big that previous competitors can't keep up, then squeeze hard shaking out other competitors(taxis/rentals) as well as your own minions(a.k.a. gig economy workers) for blood.
> If there are no drivers, there are no customers. With no customers, who would drive?
No worries, Waymo is coming soon to kill Uber as well as everyone Uber took out of business.
it does seem very likely that $ per token of inference (at fixed quality) will continue to go down rapidly as hardware and software continues to improve.
If you can find a way to sell billions of dollars of eggs, even at a loss, people will invest. At scale you can increase the price of eggs, make the eggs cheaper, etc. Obviously the fact your eggs are artificially cheap is helping you sell them, but that won't be all there is to you as a seller.
People underestimate how hard it is to sell things: you could have the cure to cancer in your hands today and still need to lose mllions to get anywhere with it.
It's better than that, OpenAI are stealing the eggs and lobbying to make egg theft legal, so long as you only steal eggs from small farmers and back yards. Because they can, by their own admission, never stay in business if they have to pay for the eggs.
one would think the human race would prioritize solutions like clean, renewable energy, food production, not USING energy to solve "AI problems" like summarizing my email, and putting Sly and Arnold in YouTube video remixes
Yeah, it's quite sad. It's perplexing how the hype is being maintained at the moment. JP Morgan and Goldman both released reports more or less claiming AI is a deadend until we make some technological or supply chain breakthroughs. This is before we mention that OpenAI (and probably other AI projects/companies) seems to be operating at a significant loss with no foreseeable reprieve.
Yet here we are, pouring money, resources, expertise, and people hours into an endless pit of hopes and possibilities of a possibility.
for real, I wonder what this level (collective human time spent on AI) of effort could accomplish if focused on trying to build self-sufficient city scale indoor farming in the wealthier parts of the Middle East (ie somewhere where energy and water need to be figured out at scale), figure out how to make them more efficient, and then use that tech to build those indoor farms in developing countries.
... I already can sense somebody typing "but AI will help us design those better!!!1!!"
If we just sacrifice, 5 more New York’s worth of power, and the intellectual output of a generation, we will _totes_ get an AI that will finally tell us how to solve global warming!!!!!! (In a way that doesn’t hurt my feelings/money-machine like “use less fossil fuels” and “stop emitting carbon”) /s
And it will go from 9% to 90% over the century. Big tech companies might as well avoid the middleman and evolve into the power generation business, although it's not hard with an open design of a solar farm in the desert.
Solar is better than nuclear for any application here. And remember, you can do your training in a location that has the world's best solar resource, not in (say) Finland.
> Turning off the data center for 2/3rds of the year when the sun isn't shining sure is an idea.
reply
The logical thing is to place the solar panels where sun shines for more than 1/3 of the year. Additional considerations: DCs are never at 100% utilization,and the hyperscalers won't keep up with their current pace of investment in AI for the next 5-10 years - they will gladly push the power generation CapEx risk onto someone else (existing utilities), and let the taxpayers take the fall.
In case you forgot, the sun is always shining on the planet, 24 hours a day, every day. The location varies. A global transmission network will fix the availability issue.
But transmission losses would be large. There's 3-5% loss per 1000 km. Most countries don't have a power surplus to begin with so they are probably not going to start exporting what they do have to Americans.
The price of solar power at midnight is infinite. By comparison nuclear is dirt cheap.
People understand the fact it costs money to dig out coal from the ground and bring it to a power station. Yet they don't understand it costs money to take power generated at noon and shift it around. This is never included in the price for solar or wind.
> The price of solar power at midnight is infinite. By comparison nuclear is dirt cheap.
The price is the cost of transmission and/or storage. Even if you're also ignoring wind because dunkelflaute.
PV with storage costs about the same as nuclear, with broad variation between specific projects that means each can be a close winner in different cases.
A global power grid could, in principle, be built for approximately $239 billion worth of aluminium (caveat: only China makes enough aluminium to do this), with 1 Ω electrical resistance going the long way around the planet.
That price tag is 5-9 Sizewell C reactors, based on current cost estimates. That reactor took 14 years to go from "government wants new reactors on sites of existing reactors" to "planning permission granted", and is planned to have merely 3.26 GWe nameplate capacity.
From a purely economic perspective, power grids are fantastic.
“People” do understand though. If you look at the big energy reports, many of them include solar+storage LCOE numbers, as well as just raw solar. Combined storage numbers are roughly (depending on the report) competitive with coal & gas today, already cheaper than nuclear, and expected to drop fast in the next few years as various battery tech ramps up.
I've worked as a quant in energy markets and made a very tidy $10,000,000 in one day betting against solar and wind.
The people who make those predictions are never held to account and can't find their ass with a GPS.
One only need to look at the fact that the best predictor for energy generation prices increasing is how much renewables have entered the grid. Anything over 5% and you start seeing the costs rise upwards.
> We find that renewable energy is associated with
a significant reduction in wholesale electricity prices in Europe, with an average impact of 0.6
percent for each 1 percentage points increase in renewable share. We also find evidence for a
nonlinear effect—that is, higher the share of renewables, the greater its effect on electricity prices.
On the other hand, while quantile estimation results are mixed with regards to the impact of
renewables on the volatility of electricity prices, we obtain evidence that renewable energy has a
negative effect on volatility at the highest quantiles.
Having people betting on energy markets sounds like a bad thing.
When the people betting (and apparently winning those bets) also have false beliefs about renewables raising wholesale energy prices that are contradicted by evidence?
Well, at the very minimum, it's not a good look. At worst it's Enron.
In Australia the introduction of grid batteries made its money back in slightly over a year not because of buying and selling electricity, but from undermining the price setting collusion of the gas operators.
> I've worked as a quant in energy markets and made a very tidy $10,000,000 in one day betting against solar and wind
If your bet was in the form of "look, the weather's bad and there's not enough grid storage", obviously so — that's why all the battery factories are getting built :P
The cost of those batteries is low enough to disregard your conclusions in the long term.
Blacksmiths could bet their horseshoe business against the automobile, until they couldn't.
Not true. You need a worldwide transmission network that supplies electricity to wherever it is needed. Solar power is available 24x7 on the planet. Long-distance DC transmission technologies have evolved.
> You need a worldwide transmission network that supplies electricity to wherever it is needed.
Now that's a whole bigger challenge than you started out with. The XLinks project [1] is a proposed 3.6GW 4,000 km undersea link from Morocco to the UK. The cost of the inter-connector alone is 11B GBP, so approximately 0.75M GBP per MW-km.
> Why invest so much in a global communication network when regional servers can work cheaply
That's the system we have; CDNs, Google Global Cache [0], Netflix Open Connect [1] . Location matters, even for bits and bytes, because infrastructure is expensive.
Perhaps you are missing how large and expensive the cables are. See [2] for 2014 cable spec and costings.
The point is that difficulty is adjusted in accordance with network saturation to prevent a 51% attack. The network is not inherently inefficient unless you're attempting to monopolize it - you are still rewarded for using more efficient mining methods than your competitors.
Which leads us to the GPUs. For a while everyone said ASICs (and the courageous ones, FPGAs) were the future of mining because they were inherently more efficient than GPU hardware could ever be. But it turns out that it's the other way around - mass-manufactured GPUs have access to more efficient silicon than any FPGA on the market could hope for. Similarly, AI chips that want to beat Nvidia on efficiency terms first have to climb a mountain of power usage that is inherent to their exponentially less-dense hardware.
The observation is that even if you get better at mining, all that happens is that the miners start to put in the same amount of effort but using the new technique: calculating hashes with less power or faster doesn't actually improve the resource usage of bitcoin, because the resource usage is tied to the rewards given to miners, not to the actual act of mining. (Importantly, it's not tied to the value of an attack! Nothing about bitcoin's now-ossified design actually ensures any particular level of resistance to attack, other than at the moment it's "very high" because there's still quite expensive coins being mined and people buying them)
And the CPU/GPU/FPGA/ASIC thing is something that depends on the proof-of-work. Bitcoin went for the naive solution and it meant ASICs were the optimal solution once a certain amount of income was available. Later cryptocurrencies learned from this and specifically designed their proof of work systems to be optimal on a GPU, or even a CPU, because making ASICs the optimal solution is generally pretty bad if you want a diversity of miners.
I think it dpends on the PoW system used. On a basic level you have memory hardening, and that can be used to force usage of bulk memory on GPUs or bulk storage like with Chia. For the more complex PoW you can use speculative execution to make CPUs most performant like RandomX.
With bitcoin its more arbitrary but you can see how they could hard-fork to a different hardware-favoring system if desired.
With Bitcoin specifically, I literally cannot imagine a serious number of people considering a hard-fork that removes the sole reason it's attractive as a currency.
Giant buildings in the desert with solar cells on top. No need for distribution lines. How many people are actually necessary to staff one once it is up and running? Bury the building with the desert soil for insulation.
I think you massively overestimate the generation capacity of a PV cell. If you cover all the surface area of a datacenter with PV cells, it will generate a small fraction of the power required.
I didn't illustrate the thought clearly. I didn't mean that the building's roof would be the only source of PV cells. The solar farm could grow all around the data center, but the roof would not need be a hole in the farm.
Your idea could perhaps work only in space, a bit closer to the sun, operating at peak power generation 24x7. On the ground it takes a lot more area in panels than is used by a datacenter.
Okay, so have AI build a nuclear plant in the desert so when they run it at 115% on the reactor, it's in the desert away from people. It's not like they'd be concerned about downwinders. Put the plant and the data center right next to each other again to avoid distribution lines. If they want power, make them figure it out. It should not EVER mean that normies have to sacrifice because AI wants
You are all over the place. In any case, nuclear fission energy doesn't work without a river providing steady cold water for cooling. There is no such water in the desert.
the first thing that comes to mind is that you need a big ultimate heat sink for a reactor. The efficiency of a power plant increases the colder you can get the condenser because of the rakine cycle.
Nuclear plants pair well with big water infrastrucure projects. Forced convection is just a really effective form of heat transfer
The utilities are being asked to make massive speculative investments in transmission infrastructure, but are dubious that the demand will actually be there when those projects finish in half a decade, and they'll be left holding the bag.
Also, infrastructure investment has a very long return on investment. (power plants for instance need to run decades to make back their profits, especially nuclear power plants.
Other forms of energy generation come and massive ecological costs.
Are we really prepared to spend this much energy on a speculative technology? especially when it is destroying the planet while doing so?
“to make back their profits” - is electricity / energy generation usually all owned by for-profit companies and not at all by government/public? Is it any different in USA vs other countries?
I feel that energy generation (key component if we want to grow as a species) should be helped/sponsored by governments and not really expected to turn any profit.
The global IT infrastructure is expected to use 1/5 of the world's energy budget in 2025 by some estimates. The AI hype has the potential to push this even further in the next years. Considering we're in the middle of a climate crisis and racing to shift the energy matrix to renewables, having IT be a main responsible in increasing demand is absurd, we should be dramatically _decreasing_ energy demand.
Crypto currency promised to overthrow the bankers, so they are bad and their energy waste is also bad for environment.
AI intends to overthrow expensive people(costs) and make the bankers as well as investors plenty money. Climate change can wait, once AGI is achieved, it'll figure out how to solve all the climate issues and all will be well.
That being said, AI here is no different from crypto, only diff. is, AI has immense backing and lobbying. Even our EU climate friendly overlords are parroting that AI will improve everything and more adaptation of AI is needed in all businesses and investment must be injected into anything that has AI. So, all is well in the end.
The west needs to get over nimbyism and build infrastructure again. It's frankly embarrassing how much the west has crippled itself and then exported manufacturing to counties with much less regulation.
It's an easy thought to have. I live in one of the US's larger metro areas in a leafy, former streetcar suburb then annexed, neighborhood. Near me, just down the street, is an old industrial plot that supplies materials and tools for other industrial uses. Their trucks are large. Their lots are small. Each day is a dance of large flatbeds loading up for the next day, moving in and out of the lots, and other customers and their large flatbeds coming to stock up. Many leave by driving down the street in front of my house.
Is it annoying? Yes. Their trucks are heavy enough to shake the house when they go over a bump. They are loud as hell too. [1]
Do I want to shut the company down? Of course not. They are my neighbors, for better or for worse. I have to try to make the relationship work. They employ dozens of people and make it so other companies can build things easier in my city.
The instinct, however, is to think "I wish they would f** off with their big dumb trucks and their blocking traffic and their dangerous blahblahblah. I'm fine with industrial supply companies, but not in my backyard!". It takes an effort to stop yourself and remember to recognize their value. I could lose my job tomorrow, and maybe walk down the street and ask them if they need another set of hands moving gas cylinders around. I might one day need their services, or need the services of someone who needs theirs.
1. I wish the federal government would regulate the amount of noise pollution coming off some of these vehicles, yes, but that isn't a local issue.
People who are very sensitive to noise should not live in cities, which are, in fact, noisy places. If you want to live in the countryside, move to the countryside. Shutting down cities and moving all manufacturing to Muslims slaves in China is not a reasonable response to some few people in cities not being able to come to terms with what a city is.
And it's not clear to me at all why you want people who do not live in your city to force the people in the city to adopt rules they don't want.
If you care about this, let's take cryptocurrency offline first.
Crypto still uses many multiples of the power consumed by AI, and unlike AI it can _never_ improve and provide more utility per watt since it is inefficient by design.
I believe that chips will get more efficient as they get tuned towards AI needs. Also, energy costs will continue to fall as they have for thousands of years. Think about this, at one time we would have to put a lot of wood or animal matter to get enough energy for a few hours of light at night. Now it takes very few resources to get enough light for a whole night. It's so relatively inexpensive that we can light an area all night without having to think twice about the cost.
Energy will get so inexpensive in a few years (10?) from now that power consumption by AI will not be a problem.
Power so cheap that it did not have to be metered was the promise of Nuclear power but it got sidelined because of safety concerns. Given that climate change mandates a less polluting power source Nuclear power will get a new life which dictates that it become safe to operate. I predict that safety will increase over time. Even now there are experimental reactors that are fail-safe. It's only a matter of time before Nuclear reactors start to generate cheap safe energy.
Here's a company that's working on it now: https://www.terrapower.com/about/
Also, solar power is making a large dent in our power needs.
I have a hard time imagining how any of that will lead to cheap abundant power in ten years. In principle on a high level a lot of this is easy. Actually doing it is not.
Are you kidding me, it's already cheap and it's going to get cheaper. I, a one-income person, can get up and use power throughout the day, every day at a fraction of my income. That's cheap. And I'm one of millions, if not billions. I think you're thinking free. Free is not going to happen anytime soon but cheaper than today is coming.
I've heard it's mostly a fallacy. Jevon's paradox is the assertion that demand for energy is so elastic that increases in efficiency increase demand so much that this overwhelms the savings from efficiency. And in most cases this isn't true. One must be careful when looking at historical evidence to not say "efficiency increased, and demand increased, therefore demand increased because of efficiency", which is just a post hoc non sequitur.
I guess your point is that as energy gets cheaper demand will increase therefore negating the savings. Well, that has not been the case when it comes to power. Look at the cost over the last 200 years and you'll see that the cost has dropped over that time. Energy cost is a fraction of what it was then but demand has exploded. There's no reason to think that things will be different in the future.
What do mean by "they"?
EDIT: who do you mean by "they"? (Rephrasing since some readers don't get that intent of the original question.) The handful of corporations interested in transport? Roads were a broad-based need. Roads have been built, used, maintained for thousands of years. The interstate highway system came from a government initiative, if there was a "they" it was broad-based enough to be "us".
Railroads served needs that had existed for a long time and it was very clear what their use was from the time they were conceived, and there were more than a handful of participants in the movement of goods and people, since producers wanted greater reach and consumers wanted better access. By contrast to the very small number of "they" asking for more elecricity for data centers. How many people involved in the discussion are asking for the AI companies to be getting this juice?
No, but there really should of been. We've largely been conned into accepting a highly un-scalable transportation infrastructure by the automobile and oil industry.
OP is saying the opposite: the TCR required huge investment, and was massively speculative, with a huge bubble ensuing. But rail travel did revolutionize the world, and few people sat around asking whether or not it was worth it.
TCR could have been justified by everyone having massive faith in the future, as OP is suggesting happened with roads. But you're quite wrong that "few people sat around asking whether or not it was worth it", as Iron Empires details:
I don't happen to know about roads, since that wasn't one single thing. But I doubt they happened because of blind faith in the future, either -- it was probably more businesses demanding roads NOW. So the argument that no one questioned them is dubious at best.
What I meant to say was that the AI bubble is feels different in that there seems to be relatively more skeptics versus railroad mania or the dot com bubble (but this could just be skewed by my own experiences).
Whether or not this suggests a flawed value prop for AI is another story.
> American Electric Power, which owns the line, has proposed a new, higher electricity rate for data centers and cryptocurrency miners that would lock them in as customers for a decade. The companies are balking.
Look at that! Net Neutrality comes to the electrical wire. They could have charged different rates based on industrial/residential or volume but that wouldn't be optimal rent extraction.
This is actually a really great article about the weird contract dynamics of large power customers and the chicken-egg problem of needing commitment for a certain amount of guaranteed spend to justify the cost of servicing them. It has nothing at all to do about AI.
Comparing this to net neutrality just poisons the well when discussing NN. Internet service providers being able to arbitrarily adjust pricing based on data source stifles competition. Is there competition in the power supply industry where a client can pick their source? Well, aside from having their own generation. In this case transfer is the service and if one day huge demand cluster disappears the capacity for it is left to rust.
I don't think your point disagrees with mine. Charging based on demand is fine, requiring take-or-pay contracts when your request requires expensive grid upgrades is fine. Charging more because it's a datacenter as opposed to heavy industry, not fine. That's the part that mirrors NN.
But to directly answer your question, yes there is competition. In most states, Ohio being one of them, you can choose who provides your power generation. And since companies are shopping states for where to build data centers AEP has a lot of competition for delivery.
how is this stressing a grid that has to shed huge amounts of load to maintain availability off peak? instead of shedding the load, just price it effectively and the demand will even out and be a more efficient use of the fuel or generating station. the problem with our energy infra is a lack of consistent demand, and both AI and proof of work create the demand and a consumer of last resort that would make generation way more efficient.
afaik, the main compute load is done in training, not in the queries. this article sounds like astroturfing a pretext for regulation under the auspices of "climate."
also, the diminishing value of cash is accelerating so taking todays dollars and putting them into tomorrow's energy is probably the most fundamentally sound economic use of capital today.
power generators were loaded with debt and used as public sector slush funds (in canada where they were nominally publicly owned) and now the companies are not very productive because they have to pass on the debt service cost to consumers, and prevent anyone from entering the market to offer competitive service that would interfere with that debt service. if you build new energy infra, you need to protect it from managers piling it with debt to loot it, but if you solve that real problem, demand is not a "problem," it's the most valuable thing in the universe.
https://archive.ph/rS3ze
There’s a saying I’ve heard that this reminded me of, “if you owe the bank two dollars, that’s your problem, but if you owe the bank two billion dollars, that’s the bank’s problem.” I think it’s relevant because it shows how responsibility shifts as things scale. If you owe the bank a little money then you are just a regular customer and you deal with the bank’s policies. But if you are a big player then it’s up to the bank to negotiate with you and come to mutually agreeable terms.
These companies that have many big data centers are now big players. If they are stressing the grid they will need to be part of the solution in expanding the capacity and infrastructure, either by paying more to the electric companies or by including power infrastructure in their vertical integration. Microsoft has the right idea by investing in Three Mile Island, I think other big players will do similar things.
Unlike banks, grids have an obvious solution to this problem: stop supplying these players with energy when the grid is at significant risk of a black out.
I think many people read my statement and flipped who I thought the banks vs customers are. If you owe the bank $2 billion, that’s their problem- meaning they are exposed and could fail if they don’t negotiate to cover that exposure. If an AI company needs a bunch of power and can’t compute without it, then they are exposed and need to negotiate to make sure the power companies can supply it- they are no longer regular customers.
In my thought process, an analogous statement might be, “if you ask for 10 kilowatts from the power company, that’s the power company’s problem. If you ask for 10 megawatts, that’s your problem. If you (an AI company) ask for a historic amount of power and your business fails if you don’t get it, then it’s your responsibility to ensure the grid can supply that much power.
Not supplying the big datacentre with power wont lead to problems for the rest of the power grid.
The analogy with the bank just doesn't hold up.
that's what he's trying to explain - the datacenter is the bank here.
the analogy sort of works if you flip a few things around, but it obscures more than it elucidate at this point.
Every problem has an ‘obvious’ solution on the surface after thinking for ten seconds.
Data centers/supercomputers/similar facilities have agreements to ensure uninterrupted power.
The grid would sooner cut off residential power than risk running foul of SLAs.
Most developing countries are very familiar with this, the technical term ‘load shedding’ having entered common parlance because of the frequency of power cuts faced by consumers.
Kind of off topic, but
> Every problem has an ‘obvious’ solution on the surface after thinking for ten seconds.
Is kind of a silly statement.
What’s the obvious way to automatically detect pictures of birds? Because diffusion and transformers are not it.
Great point.
My cousin just (last year…) tried to do this as some extra credit high school thing.
The ‘obvious’ solution was detecting edges with a python library and manually writing up 4-5 functions to identify features.
It’s surprising that this even comes close to working.
Maybe subjective, but I don’t think edge detection is “obvious” unless you spent time looking into image processing.
Even then, grabbing an existing package is just offloading the solution discovery to someone else.
Banks have an obvious solution as do grids. Build their reserves and infrastructure and scale to their biggest customers. A stressed scale out system just requires more scaling. It feels weird to say any other solution, especially when the customer is a paying customer.
It only feels weird if you consider paying customers getting what they want has to be of the highest priority.
Others who are regular readers of IPCC publications might value the survival of big parts of earths habitable zones and the most densly populated costal areas higher. But priorities differ.
Then we should prioritize renewable non destructive production of energy over mediocre stasis?
Scaling out power infrastructure is capital intensive and time consuming.
Why would you do that when there is a strong likelihood that most of these LLM startups will be out of business within the next year or two.
Because we have other uses for the scaled infrastructure. There’s a lot more demand for electrification from logistics than AI.
That’s what bitcoin maxis always said when their rigs were overloading the grid. “Build us more capacity, and stop whining!”
Except bitcoin had no practical value. I think only the most jaded think AI has no practical value. Most lucid observers recognize there’s immediate value and the future is either “a lot of value” or “mind boggling amounts of value,” or some middle ground. Most lucid observers of crypto realize its primary value is in sanctions evasion, money laundering, and other illegal transactions. Not saying no one finds practical value in that but it’s not broadly useful to society.
AI has a similar amount of value as bitcoin in its current form too. Guess I'm just jaded, but AI is broadly an arms race to nowhere and unlike bitcoin there is no value provided from past energy expenditure, the older models become useless after newer ones are published. This cycle will continue until money stops pouring into the market sector, we won't reach a true AGI in this cycle like some suggest, this is all purely fueled by hype.
A trillion dollars of market participants disagree with you, now including institutions and banks
I happen to agree that Bitcoin has very dubious utility, but I suppose it has nailed the "store of value" use case, whereby you can send it anywhere without any friction, and also if you need to, say, escape the country during war or a natural disaster, it's much easier to remember 12 words than try to sneak gold through customs, while the cash you store in your house might be underwater. Bitcoin for many institutions is a digital commodity to diversify for tail risk etc.
Financial institutions will make money by intermediating anything that has a market. Meanwhile, escaping with assets during a war and evading customs is a an example of "sanctions evasion, money laundering, and other illegal transactions"
Is there a big enough company (or government) where a 2 billion USD loss is not a big deal?
It is not a big deal to the US government or Apple for example. It is something they rather avoid of course but it doesn’t threaten their existence the slightest.
The data center is paying the grid’s bills as well.
And that single customer is paying more than likely millions of other customers.
Notably, if the grid has a good PR/marketing department, those customers are a lot more likely (individually) to take a black out ‘for the greater good’ than the data center.
See California’s rolling blackouts, etc. in the past.
Are you suggesting it should be illegal for these players to buy energy on the open market?
yes.
there is not and should not be an "open market" for power. the sale of electricity from the power grid is highly regulated, and for good reason. delivery to residential customers and essential services should always be prioritized over industrial bulk purchasers.
bulk purchasers already have the opportunity to use power sources that are not connected to the grid, if they want to use grid power they should be prioritized according to their benefit to society, not their cash on hand.
> they should be prioritized according to their benefit to society
The fact that they have the capability to pay for and consume this power is the strongest signal that they are indeed providing value to society. The money comes from somewhere. If that turns out not to be the case, they have the strongest incentive to stop.
But this sort of rationing at the hands of some regulatory body has historically proven to be a far more deadly cure than whatever the presumptive disease was.
That argument would require regular socialization and redistribution of all wealth. The market does not prioritize what the society needs, because individual needs are weighted by wealth and income.
In a Western society, everyone's needs are supposed to be equally important. We often don't even make majority decisions, because we assume that the constitutional rights of a minority are more important than what the majority finds reasonable.
> The market does not prioritize what the society needs
What do you think prices do? What do you think income is reflective of?
Companies that make lots of money provide things that lots of people are willing to pay for. This is the reflection of what people need. Exxon makes money because people want to stay warm. Cargill makes money because people want to eat. Apple makes money because people want to be entertained. Eli Lilly makes money because people don't want to die.
What do you know that millions of people all acting in their own self interest don't know?
Parent is saying that people with more money can affect the price signal more. That simply isn't as fair as weighting individuals equally. A lot of people don't like the economic impacts of this, so they tend to justify it rather than accept it as valid criticism.
> That simply isn't as fair as weighting individuals equally.
It isn't meant to be fair. Fairness blunts the signal.
Too bad. I mean it to be fair
> What do you know that millions of people all acting in their own self interest don't know?
That education of the poor is important, perhaps?
In reality, I'm pretty sure they do know that. Which is why they vote for politicians ensure the poor are educated, regardless of the fact that that can't necessarily pay for it at the time. They don't rely purely on laissez-faire capitalism to determine all our social policies.
A weighted average can be very different from the unweighted average.
In our current society, children can benefit from the wealth and social connections of their parents. That gives the needs of some people additional weight in the market without any actual merit. To get rid of that market distortion, children would have to be raised collectively without any contact to their parents.
There is a lot of wealth that has been created with business practices that later became illegal. Because we prefer not to punish people for actions that were legal at the time, we let people keep that wealth. But if we want the market to prioritize the needs of the current society, such wealth would have to be confiscated.
A society where the market actually reflects the needs of the society would be incredibly dystopian.
right, hospitals and farmers should just massively raise their prices so they can better compete with crypto miners, that will make the world better...
money is not a good indicator of value provided to society. there is a ton of ways where it falls apart, and there are a lot of people devoted to finding the ways they can collect the most money while providing the least benefit to society.
> money is not a good indicator of value provided to society
Ok, it's the least worst system we have...unless you have an alternative. I'm all ears.
Usually these things end up with “well obviously my personal priorities are objectively true…”
Yes but the aggregate of every individual's personal priorities are by definition society's priorities...
What do you get when 10% of Americans get to decide 67% of the priorities?
Handmaid's Tale?
Socialism?
How would you even come to that conclusion???
This only hold true in relation to the economy if you say every person has the exact same wealth. This isn't true in capitalism and is (arguably) the reason capitalism exists. Such a system, however you choose to develop it, would invariably be closer to socialism in spirit.
Spotting and stopping the odd case where it’s gone haywire doesn’t mean ditching market pricing across the board. You can just fix (maybe even only temporarily!) the part that’s doing wacky, undesirable stuff.
yeah, a little bit of reason goes a long way.
we don't need to invent a whole new economic system. we can just say "this is bad, and we should do less of it". and making sure that power goes to people's homes before it goes to datacentres is one of those things. and the best part is that's the way the world already works, so nothing even needs to change.
The problem with these conversations is that capitalists seem incredibly brittle-minded. Meaning even a small, and fair, critic devolves into "oh so you want communism?"
Public vs private isn't black and white, it's a spectrum. Energy providers sit on this spectrum. In some way, they're public infrastructure. In others, they're private companies. Slightly pushing them more towards "public" via regulation is what we HAVE been doing for a long time. This shouldn't be setting off your communism senses. If it is, you have a fundamental misunderstanding of how the economy works in regard to these kind-of-public-infrastructure goods and services.
If power prices go up, it incentivizes building more generation, which is better for everyone.
Capping prices and participants is pure stupidity. Price controls and rations never work
It's providing value to whoever is spending the money. Right now, that's "investors". We'll see about society. If it provides that much benefit to "society", what is the activity that benefits? It's not just going to be people knowing things, there is a finite limit to what people care about. If the outputs from AI drive increased economic activity, that'll be reflected as increaded energy usage. Which will likely dwarf the AI's usage.
> The money comes from somewhere.
Gullible investors for now.
AI Overview:
The Environmental Protection Agency (EPA) has many accomplishments, including: Reducing air pollution The EPA has reduced air pollution by regulating auto emissions, banning pesticides, and cracking down on factory and power plant emissions. New cars are now 99% cleaner than 1970 models, and the EPA's efforts have led to a decrease in smog and asthma cases.
Cleaning up toxic waste The EPA has cleaned up toxic waste through the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund), which provides funding for cleaning up abandoned waste dumps. Protecting the ozone layer The EPA has protected the ozone layer by reauthorizing the Clean Air Act in 1990 to phase out chemicals that deplete it.
Increasing recycling The EPA has increased recycling. Revitalizing brownfields The EPA has revitalized brownfields, which has led to increased property values, reduced impervious surface expansion, and reduced residential VMT.
Reducing water use The EPA's WaterSense program has helped Americans save water, with a cumulative savings of 8.7 trillion gallons as of the end of 2023. Banning cancer-causing pesticides The EPA has banned or restricted many cancer-causing pesticides, including heptachlor, chlordane, EDB, daminozide, and chlorpyrifos.
Testing schools for asbestos The EPA required all primary and secondary schools to be tested for asbestos starting in 1982.
Rating energy efficiency of appliances The EPA introduced the Energy Star program in 1992 to rate the energy efficiency of household appliances. EPA History: Documents about Agency Accomplishments | US EPA Nov 17, 2023
Generative AI is experimental.
Charge them more until it's worth it.
And sure, tell them they get disconnected first when there's a shortage. But a hard block is worse than taking their money and using it for improvements.
How do you decide who "them" is, that should pay more?
Usually you do the opposite: In exchange for a lower rate you will be the first disconnected in an emergency.
Whoever you were going to refuse to sell power to for capacity reasons.
>delivery to residential customers and essential services should always be prioritized over industrial bulk purchasers.
This is not how the grid works in the US. Industrial is very frequently critical and gets higher priority over residential. Outages at major industrial operations can cost millions in lost revenue and can cause direct damage to hardware.
The grid absolutely is a market and should be. Reliable power at fixed prices is a thing you can try to buy from it, but that’s by no means guaranteed.
In parts of Europe energy intensive industry doesn't get a guarantee on power delivery compared to households or hospitals.
In exchange they get a much better price on energy with the respective risks attached.
> The grid absolutely is a market and should be.
...but generally not a free market in most jurisdictions. The Texas grid is an ongoing experiment, and yet even the Texas legislature had to step in to bail out[1] providers' massive losses from with very high energy spot prices - it turns out the demand for energy is pretty inelastic at below-freezing temperatures.
1. Via a surcharge on all future customers. That's not very free market of them.
What do you mean it’s not a free market? In the western grid I can absolutely contract for access to the grid without any kind of government intervention. So it’s definitely a free market in who can buy and the price is negotiated.
In Texas it’s just a different pricing structure with instantaneous pricing. That’s not more or less free market.
> What do you mean it’s not a free market?
The state government stepped in to socialize the losses incurred by private companies during the last snowstorm. Perhaps we can call it "Free markets with Texan characteristics"?
Like most US industries, it's a Free Market*
* Except big players will never go under, and substantial losses are socialized
And how do you plan to measure their benefit to society without using money as a signal?
> Are you suggesting it should be illegal for these players to buy energy on the open market?
Part of the problem is the AI companies are unwilling to sign long-term power purchase agreements. That means the utility is on the hook for both the capital cost of the development and the risk of unloading a bunch of excess power if the tech company decides to relocate.
A lot of the AI companies are also the major cloud providers, i.e. existing large consumers of electricity.
Google could entice someone to invest in generation capacity for a new AI datacenter by agreeing to buy their output for a few years, or building their own generation. Then if the AI thing doesn't work out, use that power for their existing data center uses, i.e. move the existing servers into the AI data center. That would be essentially shifting the risk to the power company in the location where the existing data center is, even if that's not the same one they have the power purchase agreement with.
> Part of the problem is the AI companies are unwilling to sign long-term power purchase agreements.
That may also be circumstantial evidence that they don't quite believe all their own hype.
> may also be circumstantial evidence that they don't quite believe all their own hype
No company, particularly one with negative cash flows, wants to saddle itself with long-term liabilities.
There might an opportunity for useful financial engineering: instead of a fixed power purchase agreement, one which floats and is married to a no-shop commitment.
For example: start-up agrees to purchase 10 units of power at a fixed price for 10 years. It has the option of only purchasing 9 units, but must pay a 20¢ fee on the unpurchased power. In this way, if the start-up hits a rough patch, the burden is shared in a way that is meaningful to the start-up's surival probability. In exchange, the start-up commits to not reducing its power purchase while ramping up usage with someone else, presumably at a lower rate, and, once lowered, commits to ramping up its usage with this provider before ramping it up with anyone else.
Now here is the critical part: the utilty doesn't hold that risk. Instead, it pays a fee to a hedge fund or endowment or whatever by which that party agrees to make up the 80¢ (or some fraction of it) on unpurchased power.
In summary, the utility winds up with a reliable cash stream in all worlds except the start-up failing. (One could mitigate that risk by requiring some pre-funding.) The start-up gets a long-term, guaranteed-price source of power. The hedge fund gets a weird financial thing to play with. (A natural provider of that guarantee would be one of the tech giants. I like the idea of it going into the market because one can see those contracts being aggregated and thus diversified.)
For emergencies, there are already methods to shut off power to low priority businesses. And say, keep hospitals open.
And, if you want to pay, you can pay a premium to have more 'secure' power. This is an option today, already. No need for any discussion about markets and 'government is holding back the free market'. There is already a market to pay for premium power. And the utilities can charge AI customers more if they want.
this is actually a major problem in the netherlands at the moment.
a part of the energy grid cannot handle the load being generated by all the solar being deployed, and upgrading the grid takes years. In the meantime, bussinesses and even households simply are not getting a new power connection unless they are deemed of enough importance.
If upgrading the grid takes years then invest until it doesn't take years.
There have been many years of build up to solar power. If the people running the grid haven't done their job then replace them with people who can.
Markets are neither open nor free, they are closed and regulated. So yes, block their purchasing, tell them to sort their own. Here's the thing, do you cut off one customer when supply is tight or do you risk political suicide by kicking the bucket to millions of small customers? Power utility companies will kick one customer, if they don't they will lose their social license to operate and get legislated out of business.
the grid gets to choose how it prioritizes power. if they want too much power at a time the grid doesn't have enough to go around, they're likely fairly early on the cutting block
The suggestion is that they can buy it at certain times, but not when the grid is nearing capacity. And yes, that's a perfectly reasonable thing for a society to decide.
It's shared infrastructure, mainly paid for by public funds. If a government decides the priority should be the millions over the few, that's what happens in a functioning government.
Or they can pay for their own power stations and infrastructure to be built.
They will just go somewhere else where this isn't a limitation. Somewhere that actually has a functioning power grid.
If the power grid regularly can't handle the customers it has them it isn't a functioning power grid.
They do contract for capacity in advance, which enables suppliers to plan for demand.
Energy should not be an open market. It has been given unbelievable amounts of public funds and is public infrastructure.
We should work out a mutually beneficial agreement - I think it makes no sense to nationalize energy providers off the bat. But, part of that agreement should be ensuring energy for residential areas. And if that requires cutting off energy pigs in the meantime, so be it.
Sorry hospitals, these AI jerks have more money! /s
AI jerks will just start putting big red crosses on their buildings, open one 10'x10' space in their facility with some barely passed the exams to get a license type of doctor and claim it to be a medical facility of some sort. Just like other hospitals, they'll have a shortage of beds.
I'm only half joking as from what I've seen of those involved, I would not put this type of consideration past them.
I'm sure they'd then be on here saying such a thing is legal and exactly what law intended. /s
No, but we should have a discussion about if it is worth it to expense so much energy for something with very little hard, real use case. Al be it bitcoin or LLM's.
there is a lot of money behind AI, but i have yet to see any of them actually get us a use case which work reliably.
Not to mention, AI is fun and all, but that energy could be far better spend making the economy less reliant on fossil fuel.
> there is a lot of money behind AI, but i have yet to see any of them actually get us a use case which work reliably.
Classic HN. You personally can't see the value of X therefore the entire market for X is wrong.
But what if I want to ask chatgpt how to conserve power during a potential blackout?
How about just raising prices and using extra revenue to expand production? This is what any business would do.
I would say the same is true for crypto miners and their increasing need for increasing kilowatt power to solve their algo's.
I assume you would cut power to theses big players so that stuff like A/C, freezers and heart rate monitors keep working for regular folk.
While your suggestion is the morally correct thing to do, you’re forgetting the other option makes more money and will always be taken.
I think you might misunderstand your analogy. If you owe the bank two billion dollars it's their problem because a missing 2 billion dollars is large enough to be painful for the bank.
I think you and the original metaphor maker are still not seeing the failure of the analogy. The bank with a $2B default gets bailed out by taxpayers and the billion dollar borrower gets bailed out through bankruptcy court—also the taxpayer. The person borrowing $2 screws themselves, and the same person borrowing $2 gets to bail out the bank and billion dollar borrowers.
And the bank stands to lose far more money than the company they have lent to who will just fold.
In renewable energy it is actually common for the funding institutions to be paid a cut of the profits and to have no recourse to repossess assets. They take all the risk because they provide all the funding. The job of the actual developer is to provide a project worth funding.
In a vacuum, your bank metaphor is solid. The problem is that these energy demands don’t exist in a vacuum, nor do the consequences of consumption.
To expand upon your bank metaphor, let’s say the bank are energy utility companies, and the customer that owes $2bn is Company A. Yes, this is the bank’s problem in a vacuum because it needs to remain solvent for its other customers (provide energy) while still collecting on its owed debt (the power bill from Company A). However, the bank also has an obligation to reduce the total amount of currency that changes hands in the first place (reducing energy use) or finding more efficient ways of exchanging that currency (renewable energy). With that broader scope in mind, Company A charging $2bn in debt isn’t just a problem for the bank, but a problem for that bank’s customers, and any customers of any other banks that do business with the affected bank.
In other words, the problem isn’t merely hyperscalers and generative models gobbling up vast amounts of power or purchasing nuclear power plant capacity, it’s that we sorely needed that capacity to wind down total fossil fuel usage and to focus on efficiency of resource usage until we addressed the climate crisis. That’s where I (at least) have a beef with the current state of datacenters, hyperscalers, and generative models. So long as compute remains insanely cheap and “infinite” in scale, we lack any incentive other than financials to reduce consumption or increase efficiency. And financial incentives only work as long as the penalty is significantly more expensive than the insurance.
The best outcome for all of us is for tech companies to get into power. Tech got into telecom (dark fiber, undersea cabling) and provide free services (youtube, gmail, etc), which used to cost a lot historically. Everyone had to shell out a few hundred dollars/month just for phone calls (billed per minute) and txt messages. Now, we are at a point all communication is free. We can do video conferences with upto 100 people worldwide for free.
If tech companies get into power and break down the regulatory capture of utilities, they can make money off of energy storage and virtual power plants while providing free power for people.
The geometric decreases in cost that you cite (in terms of communications and SaaS) are due primarily to Moore's Law. Unfortunately there is no similar law affecting power generation costs.
If tech companies got into power, the inevitable result would be that they embrace and extend the regulatory capture of utilities, with the explicit goal of maximizing their profit at the expense of human needs. As well as of course the evisceration of as much pesky environmental regulation as their lobbyists can get their hands on, to the extent that it serves as an impediment to this paramount goal.
Their philosophical stance on these concerns and tradeoffs has already been made palpably clear, in any case: https://news.ycombinator.com/item?id=41552642
From everything we know so far, these people definitely will not do the right thing without the swift and exacting application of a very heavy stick.
Solar has its own Moore’s Law called Swanson’s Law which shows that solar has been decreasing geometrically in price.
In power generation there is little appetite for innovation from producers since they are either monopolies or government agencies. So instead all innovation has been going to local generation like solar and wind.
Good points.
>As well as of course the evisceration of as much pesky environmental regulation as their lobbyists can get their hands on
As if any tech company would build anything but solar. You don't need to bend the rules here and you don't need too much storage either. You just need cheap land, a fuckton of solar to get your peaks to your base consumption and you already do 60% of energy renewable. Anything above that is battery storage and more land.
It's such a no brainer in cost and from an operations PoV the only thing that is easy enough to go into power.
And yet we have:
Internet data centers are fueling drive to old power source: Coal - https://www.washingtonpost.com/business/interactive/2024/dat...
From coal plant to data center: Old power stations are being repurposed - https://arstechnica.com/ai/2024/08/from-coal-plant-to-data-c...
Internet data centers are driving the resurgence of coal power - https://www.dailyclimate.org/internet-data-centers-are-drivi...
Meanwhile, both solar and wind also have their environmental externalities (from the mining of raw materials, to the sheer amount of land that needs to be put under shade for solar farms, and the noise pollution caused by wind farms), and correspondingly, tons and tons of rule for these companies to bend.
I imagine they will just finance their own small nuclear reactor plants probably through power purchase agreements in whatever states which will allow them to do so. Those states will be where the new data centers and jobs go.
They're not going to build a second grid, or power plants for everyone else. That's an awful business. These companies are in good businesses. They don't want to get into an awful business.
There's so much wealth to be created given the multiplier these SMNR companies are likely to have. And the tech companies will invest in the SMNR companies they purchase power from. Some of them are already invested.
Hopefully, they'll have enough scale that whatever they need to do makes it cheaper for the grid at large.
I think this is what you are saying, but to clarify, they will not own the power infrastructure. Execs from Google and Microsoft have already said this[0]
Microsoft have already entered into an agreement with Constellation Energy which pays to restart one of the reactors at three mile island. This comes with a 20yr purchase of the power from that plant.
There aren't many usable and idle nuclear power plants sitting around. It's extremely likely, as you point out, that states will soon be competing for jobs by offering land for both data centers as well as new power plants.
The best estimates I've seen but new construction of nuclear plants at 5-7 years. If this could safely be sped up then I assume big tech is already working to make it happen.
Of note, there are already some third parties/regulators working to stop big tech from capturing large shares of existing power generation[1]
[0] https://www.spglobal.com/commodityinsights/en/market-insight... [1] https://spectrum.ieee.org/amazon-data-center-nuclear-power
In South Korea, they can complete SMNR in 24 months: https://www.constructionbriefing.com/news/who-is-building-sm....
They claim they can do that in 24 months.
Telecom is not more affordable today than it was in 1990. Back in 1990 the private phone line we shared at home for a family of 4 primarily to support connecting to local BBSes and the internet cost $20/month, or roughly $48.65 in 2024 dollars. That $20 was enough to be able to send and receive email through Fidonet and UUCP, download software and connect to the local Freenet for internet access. Today's telecom spend is on the order of $250/month once a cell phone, landline (since there is no cell phone service here) and internet connection are all included. That's pretty much a factor of 5x increase in telecom spend required for a family of 4. Sure, we can do a lot more, but it's not cheaper when directly compared to the historic cost of telecommunications services.
I don't think tech getting into power will make things better. Just look at what is happening in Texas and other parts of the world: grid operators have to pay bitcoin miners to turn off their farms when grid capacity is overwhelmed, which drives up cost for everyone. Depending on where data centers are located, construction of new transmission lines becomes necessary. All this increases the baseline operating cost of the grid. Personally, I don't want more AI generated content or timelines powered by AI driving toxic engagement because it gets more clicks. The "improvements" we're seeing now are beyond the point of diminishing returns. Tech will abuse any externalities that exist worth exploiting, and society will end up paying for it.
Handwaving away all the additional utility seems unfair to me. These pipes are a lot fatter, more accessible than ever before, and there are many more ways to use them. Working from home, eliminating shopping trips, telehealth, video calls, online banking and bill pay, podcasts, maps, music, gaming, the list goes on and on.
If you're "cord cutting" and not paying for cable TV anymore, then you likely still come out ahead even after folding a couple of streaming services into the mix.
If all you have are 1990 expectations, then you should be able to make do with something for about $50/mo, maybe less. Either a cheap phone plan, or entry level internet and VOIP. And it'll still be leagues more useful.
That private phone line you shared could only be used by the one computer in the household, if there even was a computer, which more often than not there wasn't, and when it was online, you couldn't take phone calls, which was more of a problem than now, because it was 1990.
And we don't live in fear of our telephone bills like we used to. We don't charge long distance, by the minute, or per text. Data caps are annoying, but they're not life-changingly expensive, and hey, if you're living it up like it's 1990, you'll never get anywhere close to exceeding them anyway.
I believe Microsoft is currently doing just that, reserving the output of Three Mile Island. The article was here on HN around a week ago.
I don't necessarily see anything wrong with that, and I can see the communication of demand changes back to generation being useful to those running the plant(s).
Microsoft commits to pay somewhere between $100/MWh and $140/MWh for 20 years:
https://news.ycombinator.com/item?id=41601443
Microsoft's commitment allows Constellation Energy to restart the 819 MW nuclear fission reactor at Three Mile Island. This reactor operated without problems for approximately 45 years and was switched off in 2019.
The other reactor at Three Mile Island (880 MW) melted harmlessly in 1979 due to operator error. That reactor will never be restarted: https://en.wikipedia.org/wiki/Three_Mile_Island_accident
Clean baseload power is extremely valuable.
Nuclear fission is the only clean baseload power source mature enough to be widely adopted. Today there are 440 nuclear fission reactors operating in 32 countries. Having used fission reactors for 70 years, we know how to build them and operate them at 95%+ efficiency (https://www.energy.gov/ne/articles/what-generation-capacity). For example, Vogtle 3 and 4 have been operating at 100% of their capacity.
In contrast, solar and wind are not baseload power solutions. They are intermittent and unreliable, fundamentally weather dependent. If you have battery backup sufficient for time T and the weather doesn't cooperate for time T+1, your data center is offline.
Furthermore, even a day or two of battery backup eliminates the cost advantage of solar and wind. As a last resort, fossil fuel backup plants can be built, but building them is costly and using them is dirty. See Germany's power grid for an embarrassing real-world example.
Solar + wind + batteries is an intrinsically unreliable, unacceptable solution. Please see Yann LeCun's comments, reflecting Meta's view on this topic: https://news.ycombinator.com/item?id=41621097
>solar and wind are not baseload power solutions. They are intermittent and unreliable.
Being 5x cheaper more than makes up for that though.
None of the viable modes of storage (pumped water, hydrogen, batteries) are expensive enough to make paying 5x per kilowatt hour worthwhile any more.
If you roundtrip solar and wind via hydrogen stored for months and back into electricity again (the most expensive mechanism), it's still cheaper than every single kilowatt hour of nuclear power delivered on the sunniest, windiest days.
It really is difficult to overstate just how mind bogglingly expensive nuclear power is. Unless it's used to cross-subsidize the military nuclear industry it just isnt worth it.
Where are you going to build a 1GW solar installation with multiple days of storage capacity in the northeast?
long transmission lines significantly reduce efficiency and add massive costs as well as creating easy targets for terrorism.
Firstly, we should probably not start by building a mathematical renewable energy model that presumes wind energy doesn't exist. Storing solar energy for use while the wind is blowing hard is a bit pointless and vice versa.
You don't store energy from solar on a sunny winter day to use at midnight when the wind is blowing hardest and consumption is lowest. Your store energy to use on those rarer hours when it is neither sunny nor windy and when consumption exceeds the production of both.
This can be done cost effectively and at scale in two ways - 1) by pushing water uphill for short term storage and 2) by manufacturing hydrogen and storing it underground for longer term storage.
So, you combine overproduced solar, wind, pumping water uphill and electrolyzing and storing hydrogen to match demand with supply.
Solar and wind and their transmission are distributed. This makes them poor terrorism targets. A nuclear plant, on the other hand, is a great target for terrorists.
> Unless it's used to cross-subsidize the military nuclear industry it just isnt worth it.
I feel sure Ontario does not have nuclear weapons ambitions.
> If you round trip solar and wind via hydrogen
Do you have any examples of this at commercial scale (hundreds of MW) and their costings?
>I feel sure Ontario does not have nuclear weapons ambitions.
Canada actually used to be a nuclear power until 1984. Since then it has signed up to the NPT and disavowing weapons but maintaining a nuclear industry that would let it spin up a nuclear weapons program in a hurry should it deem it necessary (i.e. if the American nuclear umbrella faltered).
There are several countries around the world that follow a similar policy - Japan, South Korea, Sweden, Iran. There's value to belonging to the NPT but there's also value to being able to get a nuke in months if an existential crisis presented itself (as it has for Iran).
>Do you have any examples of this at commercial scale (hundreds of MW) and their costings?
Google for lazard LCOE.
> Canada actually used to be a nuclear power until 1984.
No, it wasn't, except in the sense that Belgium, Italy, the Netherlands, Germany, and Turkey are nuclear powers today. It was a participant in a nuclear sharing agreements (under the auspices of NORAD, rather than NATO like the other countries) where US-owned and controlled weapons were deployed at Canadian bases, under control of the US military, with plans for transferring them for delivery by Canadian forces in the event of war. It never had its own nuclear weapons or, AFAIK, nuclear weapons program
> Google for lazard LCOE.
I guess LCOH is a more relevant search term. https://www.lazard.com/media/2ozoovyg/lazards-lcoeplus-april...
Page 28 is informative. 220-235 USD/kWh for a 25% blend of unsubsidised PEM hydrogen, or 210-221 USD/kWh a 25% blend for unsubsidised alkaline hydrogen.
>In contrast, solar and wind are not baseload power solutions. They are intermittent and unreliable, fundamentally weather dependent. If you have battery backup sufficient for time T and the weather doesn't cooperate for time T+1, your data center is offline.
ok so weather is predictable and highly accurate for at least 3 days in advance. You are still able to buy energy from markets. You can still load battery storage in case of bad weather forecasts.
I don't know what the problem is here? Why do you paint a scenario where data centers magically are now off the grid and have to be on 100% reliable energy sources?
> After 70 years of working with fission reactors, we know how to build and operate them at 95%+ efficiency (https://www.energy.gov/ne/articles/what-generation-capacity).
France would like your phone number.
Knowing how and being politically prevented from doing so are entirely different things.
It’s nuclear or fossil fuels until an order of magnitude change in chemical storage.
No one is going to be building enough gas peaker plants sitting idle 360 days a year to achieve the reliability of the grid most consumers and modern civilization require. So it’s burn more gas or coal on a regular basis or enjoy power outages if you want what we have today.
I love solar. I plan to have a week or so worth of battery at an off grid home someday soon. It’s both entirely financially impractical (yay disposable tech income) and I will still back it with an expensive propane generator since I live over here in reality.
> France would like your phone number
I think there is a small matter of national/international politics (running nuclear as renewables backup), a lack of focus within EDF and perhaps a dash of French industrial action (at least a go slow on the refuelling outages).
Project Hercules was meant to solve the latter https://www.euractiv.com/section/energy/news/ceo-of-edf-defe... but this never happened.
On them positive side their nuclear generation is recovering a bit, albeit from a low base. https://www.edf.fr/en/the-edf-group/dedicated-sections/journ...
Fossil fuel plants already exist for the base load. If they run only 5% of time, it will be lot cleaner than what we have right now.
Who is building and operating a plant (these need to be more or less 1:1 per MW to back your intermittent power sources) that sits idle 95% of the time? That would be a pretty interesting pitch deck.
That’s a pretty damn low utilization rate. The cost per Mwh would make the Texas polar vortex incident look downright cheap. Or you’ll be having the government build and operate idled natural gas (or coal!) plants via taxpayer money since investors are generally not quite that poor at math. An idle plant still needs the same number of staffing and engineering as one operating at 90% capacity factors, before you even begin to look at capex.
Perhaps that will happen. Running your baseload generation balls to the wall at 100% seems to be a far better use of capital to me, and have your cheap intermittent power sources fill in for those peak loads that don’t require reliability.
I can come up with all sorts of great ideas on how to utilize spare solar capacity. None are financially practical in the scale of a human lifetime at a societal level, even with a magic wand to instantly enable the political will to do so.
Humans continue to amaze me with their inability to account for tail risk. The same political magic wand makes nuclear viable within a decade or two, accounting for said tail risk within it.
That said, the current unserious political climate gives me zero hope any solution will be found, so I’m simply preparing for semi regular power outages becoming a thing within my lifetime.
> Who is building and operating a plant (these need to be more or less 1:1 per MW to back your intermittent power sources) that sits idle 95% of the time?
This is what the capacity market is for; ensure the plant needed to operate the grid can pay the bills. https://www.utilitydive.com/news/pjm-interconnection-capacit...
It does feel like an inefficient use of capital. My best explanations for intermittents are 1) they are fuel savers, making natural gas cleaner by having them run less; 2) they siphon money into the generator’s pockets (from taxes via the Inflation Reduction Act and other subsidies, from other electricity generators via renewable energy mandates, from the utilities via rooftop solar which reduces the consumption when energy is easier/less costly to produce).
"Operator error", classic.
You nuke fans always conveniently leave out the costs of cleaning up the mess that the civilian nuclear generation program has already created. Last I heard it was about half a $T.
It wasnt tech companies that "got into telecoms", it was telecoms that overbuilt infrastructure which tech companies later bought up for a song when the bubble popped.
This is a "workable strategy" only if you can find a sucker to eat the losses.
The big tech companies are already “into power” - they (Google, Apple, Microsoft, Amazon, etc) are constantly investing in power projects close to their data centers and manufacturing hubs.
>Everyone had to shell out a few hundred dollars/month just for phone calls (billed per minute) and txt messages. Now, we are at a point all communication is free.
Not sure where you are but where I am you still have to pay for cell phone data plans and internet to the house.
Yes yes because the solution to the myopic God complex of the tech industry is more of it.
Wow. Really chugging the coolade.
Dear sirinsalot, we regret to inform you that this post is not in line with our community guidelines and as such we have temporarily suspended your power. Please speak to our AI representative if you wish to appeal this decision.
So it'd be better for these companies to not pay for their own resources? It's better to let Microsoft consume so much power that it browns out the local grid? And what, we're all suppose to just hope that the utility companies fix it for us with taxpayer bailouts and massively increased residential power bills?
I think you were too busy chugging that contrarian kool aid to spend even one moment thinking about what you're arguing for.
“Oh, just great. That what we need…more engines. These egomaniacs are going to ruin the world.” -sirsinsalot in 1898
Everyone having an engine surrounded by two tons of metal has done untold damage to our built environment and social fabric. So this isn't even a joke.
Having lived in a country where only lucky few had personal cars, I would not agree at all. Social fabric of a society where people can expect some privacy and personal autonomy in their commute is certainly a better one.
I rest my case regarding the cult thinking.
The jury has deliberated and demands that you pay my legal fees.
Jury decides to change their verdict after being algorithmicly sentenced to 90 days in jail for using the wrong exit in the court building as they were being released from duty by the court officers.
CEO of VerdictAI is quoted as saying “shit happens, if they have any value as humans they would have enough money to get out of this, so the AI must be right. One must not lose sight of the fact that we have freed Americans from millions of hours of manual labor with our InmatesAI volunteer workforce.”
Maybe I’m making assumptions a rather than making an inference, but this seems like the perspective of somebody who wants to stop development of future technology altogether because of bad actors.
I’m not saying there aren’t concerns, but risks can be mitigated and precautions put into place to prevent catastrophes. Stopping development because of valid concerns is not the right move. It’s not even the right move to stop developing weaponry which has a stated goal of causing direct harm to other humans.
There are people in the world who will attempt to do these things and much more dangerous things recklessly and with far worse intentions than making money, and if those people get technological and military superiority over The West, the world will look very different than it does today. There are a whole lot more ways the world could be worse than it could be better.
The current world order is not ideal, but think about what the actual long term outcome is if The West stops.
“Stopping a small number of incredibly over-resourced people from externalising consequences for their sole gain and causing significant and long lasting woe and damage on the rest of us” != “stopping innovation”
Nobody is saying “uh uh, no more problem solving”,drawing that conclusion would be uncharitable at best, and “wrong” at worst. The argument is “gosh, maybe we could have some innovation that’s actually useful, and not some polished-turd/enshittification”.
I’m not sure you’re making the same argument as the others in the comments above. I agree with your comment aside from your characterization of the others comments.
We’re still a democratic republic that can stop the enshittification of utilities (or whatever the problem de jour is). There are bad actors, but by and large, things are working and continue to be improving. Some things need to be bolstered, some things need to be replaced. Stagnation is not the answer.
What would you propose as the solution? All new ideas go through a centralized approval process? That experiment is already being run in other countries. If they start winning, the US will adapt or die.
Engines replace horses. What does AI replace?
Was this meant to be sarcastic? Because like, this might have metaphorically backfired on you.
You know, because of the global warming and such.
We can innovate our way out of it. I don’t want to imply that anthropogenic climate change is not real, but the topic is moot anyway because world has been through much more dramatic climate change before without the help of humans. Sooner or later, with or without anthropogenic climate change, we would be forced to solve all climate change or die as a species.
You thought you wouldn’t find kool aid drinking tech fanboys here? You might need a new compass.
Tech companies and their cults are perfectly represented by the South Park episode about Priuses
[flagged]
But always always with Mus-informed grand intentions of changing the world for the better.
All we need is another market to solve every problem! It makes everyone with power and money happy, they love markets because they are experts at fucking everyone every way possible. Thats how you build inter-generational wealth!
Edit: OP's comment is almost nonsensical I feel it might be AI. "Traditionally youtube would cost hundreds of dollars"??
Communication is not quite "free", but it is effectively unmetered. Compare with pre-internet communication, where "long-distance" calls (outside your area code) were billed per-minute. An hour-long conversation with your boyfriend who lived an hour away? $5. Across the country? $10. Across the world? $100.
For data, Compuserve charged $5/hour for access, regardless of whether you used 300bps or 28.8kbps. So a 1MB download could cost anywhere from 50 cents (28.8k at night) to $10 (2400bps during the day). And that was in addition to the cost of having a phone line in the first place, not to mention the hardware--a decently fast modem cost several hundred dollars, and needed to be replaced every couple of years as the tech was improving relentlessly.
A service like Youtube with on-demand streaming video of just about any content you can imagine would certainly be worth hundreds of dollars a month. Hell, cable television with 50 channels was $30-50/mo (or more depending on whether or not you splurged for HBO/etc), and that was whatever grab bag of content they decided to include.
Remember too that all these are 1990s prices, so you need to at least double them to account for inflation.
> Communication is not quite "free", but it is effectively unmetered.
Yet we're in a conversation about data centers, and our concept of "unmetered communication" only refers to one end of the line.
What does it cost companies and orgs to communicate with us? What does it cost them to keep a server operational, functional and sending data to us? It's "free and unmetered" for you to watch YouTube, run yt-dlp, put up your ad blockers and PiHoles, but what cost for everyone but you?
I would also consider time/effort costs in communicating. Compare having a rotary-dial phone, the ultimate "thin client", with a general-purpose computer or smartphone. How much time and effort do we put into fiddling with them, upgrading them, fixing settings, troubleshooting whatever communication software is on top of them?
Newspapers cost us $0.25-$1.50, but that's a highly subsidized cost like riding public transit.
Relative to the beginnings of the internet, your current internet bill is closer to "free" for communication than just about any other time in history. In 1996, AOL introduced their "unlimited" dialup plan. For a mere $19.95 / month, you too could browse the information super highway at a blisteringly fast 56kbps. At today's prices, that would make it $40 / month. But that was their unlimited plan. In 1995 AOL charged you $9.95 for 5 hours and the $2.50 per hour after that each month. Assuming you wanted 24/7 access like we all do these days, AOL would have cost you ~$1,800 per month, or ~$3,700 / month in today's money. Even assuming you don't want 24/7 access, the average internet user today supposedly spends 6 hours a day online[2]. Even at that rate you're still looking at ~$435 / month (or $898 / month today).
And that was just your access costs, you still needed to pay for the phone service. According to the FCC[1] you could expect to tack another $20 / month on to those costs, just for your local phone service. And all of that would have probably been enough to service one user online at a time. If you wanted multiple people in your household to be online at the same time, you at a minimum are going to want multiple phone lines, never mind the additional hourly access charges.
[1]: https://transition.fcc.gov/Bureaus/Common_Carrier/Reports/FC...
[2]: https://www.independent.co.uk/advisor/vpn/screen-time-statis...
Off topic, if 'Three New York Cities' has the dimensions of power, and 'Three Mississippi' has the dimensions of time, we've got a starting point for a new system of units...
Wyoming being a near-square state, a Root Wyoming would be the unit of length, and a California a unit of temperature, calibrated to the Death Valley record.
NYC-Mississippis is a unit of energy!
Are these AI companies already profitable or is it speculation that's causing them to get a ton of funding? AI is such a polarizing subject and I find it difficult to sift through all the hype and hate surrounding it.
This mostly depends on what you mean by "these AI companies".
If you're only referring to the big players creating foundation models, like OpenAI and Anthropic, it's mostly speculation of future improvements and revenue, because the amount of money they've raised pretty much requires massive returns. This is similar to how most venture capital works, e.g. Amazon was laughed at for being unprofitable for the first, what, 10 or 15 years of its life.
If you're referring to a broader set of AI companies, then most of the more "normal" AI companies have raised far less money, and are usually eyeing more clear use cases and are sometimes already generating real revenue. For them, I'd say it's not all speculation, a lot of it is productizing and monetizing this new technology that's come along, and is the obvious "low hanging fruit" that actually needs to get done.
> If you're referring to a broader set of AI companies, then most of the more "normal" AI companies have raised far less money, and are usually eyeing more clear use cases and are sometimes already generating real revenue. For them, I'd say it's not all speculation, a lot of it is productizing and monetizing this new technology that's come along, and is the obvious "low hanging fruit" that actually needs to get done.
Most other noticeable(drummed up in news media and various other prominent online media) are mostly wrappers around big players' APIs, more commonly OAI. I have seen some using Mistral(mostly nerds), but if I were to say that if OAI sank, a broader set of AI SME will sink with it, because they are symbiotic.
There are some covert "old fashioned" AI companies I know of, who are still stuck at previous era CV(majority) suddenly gained a lot of interest(+funding), but they are more well positioned to continue revenue generation compared to the more hyped smaller ones.
They generated a whooping three billion dollars last year.
OpenAI is expecting $3.7 billion in revenue this year, and is going to lose $5 billion, according to this article: https://www.nytimes.com/2024/09/27/technology/openai-chatgpt...
So they are currently printing 1 dollar bills at a cost of $2.35 each.
Losing money on every transaction, but making it up with scale!
Cosmo Kramer: It's a write-off for them.
Jerry: How is it a write-off?
Cosmo Kramer: They just write it off.
Jerry: Write it off what?
Cosmo Kramer: Jerry, all these big companies, they write off everything.
Jerry: You don't even know what a write-off is.
Cosmo Kramer: Do you?
Jerry: No, I don't.
Cosmo Kramer: But they do. And they're the ones writing it off.
Point to one single transformative invention that was accretive from day one. The ChatGPT moment isn't even two years old. I don't know for certain whether any of these investments are going to work out, but all of the current cash burn is forward looking. It may all come crashing down, but this is not the right analysis.
This certainly the model that basically all VC funded tech companies use. Though OpenAI is notable, because I don’t think we’ve seen another company burn this much money this fast.
Not a value statement on whether is this is right or wrong.
This predates modern VC by centuries. Early trade routes which connected humanity across continents were highly speculative, requiring huge amounts of capital, and were only profitable years later.
That’s wrong. A single load of pepper was enough to pay for the successful voyage and multiple lost ships.
Yes, that single load took years. It required huge amounts of speculative capital, years of fruitless exploration, and as you say, multiple failed expeditions before it succeeded.
That is my point.
each ship lost was maybe $10-20 million and years exploring were performed by a couple of ships operated by dozens of skilled workers with a very clear path to profitability and timeline (succesful journey to india/americas, and in under 2-3 years).
That's orders of magnitude less than the thousands of employees and billions of dollars being deployed with no clear business model or profitability in sight.
if we adjust for the inflation from sailing age and today ... it actually looks same to me.
all inventions are accretive from day one, in the majority of historical bubbles the speculation was built on top of already profitable technologies but there was always one or two firms that were profitable to begin with. Modern bubbles (AI, Metaverse,Crypto) are speculative from the word go, there isn’t a single company that’s profitable in those verticals.
That's not right. They're paying $2.35 to get a $1 per year revenue stream.
That's not right, either.
They're paying $2.35 in hopes that the $1/year customer sticks around for more than a few months.
That’s really not how CAC works. Not all of their costs are directly tied to revenue generation
But what was the cost of producing that revenue? At what point do they expect to break even on their investment?
I can very quickly generate a lot of revenue if my investors will let me buy eggs at $0.50 each and resell them for $0.05, but I don't think I'd get any bites unless I could explain how that enterprise will eventually turn a profit.
But this is what the food delivery companies were (are?) doing. This is what Uber is doing. This is pretty much what every VC funded company does. They burn through the investors' money (because who cares it's not their personal money) until they get a foothold.
That's what they were doing when money was free. Money is no longer free, unless you're an AI company.
> They burn through the investors' money (because who cares its not their personal money) until they get a foothold.
Otherwise known as investing. Sometimes it works. Sometimes it doesn't. And the last 20 years has been chockfull of excesses absolutely. But Uber is profitable these days, and has genuinely transformed how people get around. It looked like a negative unit margin dog until it didn't.
Otherwise known as https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29
This isn't quite dumping. It was more about achieving the scale necessary to make it usable. If there are no drivers, there are no customers. With no customers, who would drive?
It is indeed dumping. Scale out so big that previous competitors can't keep up, then squeeze hard shaking out other competitors(taxis/rentals) as well as your own minions(a.k.a. gig economy workers) for blood.
> If there are no drivers, there are no customers. With no customers, who would drive?
No worries, Waymo is coming soon to kill Uber as well as everyone Uber took out of business.
it does seem very likely that $ per token of inference (at fixed quality) will continue to go down rapidly as hardware and software continues to improve.
In 2021, SoftBank is very interested in your egg selling company.
If you can find a way to sell billions of dollars of eggs, even at a loss, people will invest. At scale you can increase the price of eggs, make the eggs cheaper, etc. Obviously the fact your eggs are artificially cheap is helping you sell them, but that won't be all there is to you as a seller.
People underestimate how hard it is to sell things: you could have the cure to cancer in your hands today and still need to lose mllions to get anywhere with it.
After all, you can't make an omelet without breaking the bank on some eggs.
It's better than that, OpenAI are stealing the eggs and lobbying to make egg theft legal, so long as you only steal eggs from small farmers and back yards. Because they can, by their own admission, never stay in business if they have to pay for the eggs.
one would think the human race would prioritize solutions like clean, renewable energy, food production, not USING energy to solve "AI problems" like summarizing my email, and putting Sly and Arnold in YouTube video remixes
Yeah, it's quite sad. It's perplexing how the hype is being maintained at the moment. JP Morgan and Goldman both released reports more or less claiming AI is a deadend until we make some technological or supply chain breakthroughs. This is before we mention that OpenAI (and probably other AI projects/companies) seems to be operating at a significant loss with no foreseeable reprieve.
Yet here we are, pouring money, resources, expertise, and people hours into an endless pit of hopes and possibilities of a possibility.
for real, I wonder what this level (collective human time spent on AI) of effort could accomplish if focused on trying to build self-sufficient city scale indoor farming in the wealthier parts of the Middle East (ie somewhere where energy and water need to be figured out at scale), figure out how to make them more efficient, and then use that tech to build those indoor farms in developing countries.
... I already can sense somebody typing "but AI will help us design those better!!!1!!"
How dare you stand in the way of progress!!!!
If we just sacrifice, 5 more New York’s worth of power, and the intellectual output of a generation, we will _totes_ get an AI that will finally tell us how to solve global warming!!!!!! (In a way that doesn’t hurt my feelings/money-machine like “use less fossil fuels” and “stop emitting carbon”) /s
And it will go from 9% to 90% over the century. Big tech companies might as well avoid the middleman and evolve into the power generation business, although it's not hard with an open design of a solar farm in the desert.
Solar power is the least suited power source for dataceners other than wind.
You need nuclear reactors or other base line power generation energy sources.
For inference, I agree. For training - the much larger use of electricity - I think solar might be great.
Solar is better than nuclear for any application here. And remember, you can do your training in a location that has the world's best solar resource, not in (say) Finland.
Turning off the data center for 2/3rds of the year when the sun isn't shining sure is an idea.
> Turning off the data center for 2/3rds of the year when the sun isn't shining sure is an idea. reply
The logical thing is to place the solar panels where sun shines for more than 1/3 of the year. Additional considerations: DCs are never at 100% utilization,and the hyperscalers won't keep up with their current pace of investment in AI for the next 5-10 years - they will gladly push the power generation CapEx risk onto someone else (existing utilities), and let the taxpayers take the fall.
In case you forgot, the sun is always shining on the planet, 24 hours a day, every day. The location varies. A global transmission network will fix the availability issue.
But transmission losses would be large. There's 3-5% loss per 1000 km. Most countries don't have a power surplus to begin with so they are probably not going to start exporting what they do have to Americans.
Or data centers around the world used for training
And nuclear power plants would solve it for a fraction of the cost without the chance of a world wide power grid failure.
How so? Nuclear power is the most expensive mainstream form of power by a significant margin.
The price of solar power at midnight is infinite. By comparison nuclear is dirt cheap.
People understand the fact it costs money to dig out coal from the ground and bring it to a power station. Yet they don't understand it costs money to take power generated at noon and shift it around. This is never included in the price for solar or wind.
> The price of solar power at midnight is infinite. By comparison nuclear is dirt cheap.
The price is the cost of transmission and/or storage. Even if you're also ignoring wind because dunkelflaute.
PV with storage costs about the same as nuclear, with broad variation between specific projects that means each can be a close winner in different cases.
A global power grid could, in principle, be built for approximately $239 billion worth of aluminium (caveat: only China makes enough aluminium to do this), with 1 Ω electrical resistance going the long way around the planet.
That price tag is 5-9 Sizewell C reactors, based on current cost estimates. That reactor took 14 years to go from "government wants new reactors on sites of existing reactors" to "planning permission granted", and is planned to have merely 3.26 GWe nameplate capacity.
From a purely economic perspective, power grids are fantastic.
“People” do understand though. If you look at the big energy reports, many of them include solar+storage LCOE numbers, as well as just raw solar. Combined storage numbers are roughly (depending on the report) competitive with coal & gas today, already cheaper than nuclear, and expected to drop fast in the next few years as various battery tech ramps up.
I've worked as a quant in energy markets and made a very tidy $10,000,000 in one day betting against solar and wind.
The people who make those predictions are never held to account and can't find their ass with a GPS.
One only need to look at the fact that the best predictor for energy generation prices increasing is how much renewables have entered the grid. Anything over 5% and you start seeing the costs rise upwards.
https://www.imf.org/-/media/Files/Publications/WP/2022/Engli...
> We find that renewable energy is associated with a significant reduction in wholesale electricity prices in Europe, with an average impact of 0.6 percent for each 1 percentage points increase in renewable share. We also find evidence for a nonlinear effect—that is, higher the share of renewables, the greater its effect on electricity prices. On the other hand, while quantile estimation results are mixed with regards to the impact of renewables on the volatility of electricity prices, we obtain evidence that renewable energy has a negative effect on volatility at the highest quantiles.
Having people betting on energy markets sounds like a bad thing.
When the people betting (and apparently winning those bets) also have false beliefs about renewables raising wholesale energy prices that are contradicted by evidence?
Well, at the very minimum, it's not a good look. At worst it's Enron.
In Australia the introduction of grid batteries made its money back in slightly over a year not because of buying and selling electricity, but from undermining the price setting collusion of the gas operators.
> I've worked as a quant in energy markets and made a very tidy $10,000,000 in one day betting against solar and wind
If your bet was in the form of "look, the weather's bad and there's not enough grid storage", obviously so — that's why all the battery factories are getting built :P
The cost of those batteries is low enough to disregard your conclusions in the long term.
Blacksmiths could bet their horseshoe business against the automobile, until they couldn't.
Not true. You need a worldwide transmission network that supplies electricity to wherever it is needed. Solar power is available 24x7 on the planet. Long-distance DC transmission technologies have evolved.
> You need a worldwide transmission network that supplies electricity to wherever it is needed.
Now that's a whole bigger challenge than you started out with. The XLinks project [1] is a proposed 3.6GW 4,000 km undersea link from Morocco to the UK. The cost of the inter-connector alone is 11B GBP, so approximately 0.75M GBP per MW-km.
[1] https://en.wikipedia.org/wiki/Xlinks_Morocco–UK_Power_Projec...
Going by your logic, once upon a time, I figure you would have said the same thing for the internet:
"Why invest so much in a global communication network when regional servers can work cheaply, and still exchange data by snail mail?"
> Why invest so much in a global communication network when regional servers can work cheaply
That's the system we have; CDNs, Google Global Cache [0], Netflix Open Connect [1] . Location matters, even for bits and bytes, because infrastructure is expensive.
Perhaps you are missing how large and expensive the cables are. See [2] for 2014 cable spec and costings.
----
[0] https://support.google.com/interconnect/answer/9058809?hl=en
[1] https://openconnect.netflix.com/en_gb/appliances/
[2] https://www.nationalgrid.com/sites/default/files/documents/3...
Unless we come up with newer more efficient algorithms and specialized hardware for implementing AI.
glances at Bitcoin mining ASICs
Any day, now.
Bitcoin is definitionally inefficient to mine. That’s the whole point.
The point is that difficulty is adjusted in accordance with network saturation to prevent a 51% attack. The network is not inherently inefficient unless you're attempting to monopolize it - you are still rewarded for using more efficient mining methods than your competitors.
Which leads us to the GPUs. For a while everyone said ASICs (and the courageous ones, FPGAs) were the future of mining because they were inherently more efficient than GPU hardware could ever be. But it turns out that it's the other way around - mass-manufactured GPUs have access to more efficient silicon than any FPGA on the market could hope for. Similarly, AI chips that want to beat Nvidia on efficiency terms first have to climb a mountain of power usage that is inherent to their exponentially less-dense hardware.
The observation is that even if you get better at mining, all that happens is that the miners start to put in the same amount of effort but using the new technique: calculating hashes with less power or faster doesn't actually improve the resource usage of bitcoin, because the resource usage is tied to the rewards given to miners, not to the actual act of mining. (Importantly, it's not tied to the value of an attack! Nothing about bitcoin's now-ossified design actually ensures any particular level of resistance to attack, other than at the moment it's "very high" because there's still quite expensive coins being mined and people buying them)
And the CPU/GPU/FPGA/ASIC thing is something that depends on the proof-of-work. Bitcoin went for the naive solution and it meant ASICs were the optimal solution once a certain amount of income was available. Later cryptocurrencies learned from this and specifically designed their proof of work systems to be optimal on a GPU, or even a CPU, because making ASICs the optimal solution is generally pretty bad if you want a diversity of miners.
I think it dpends on the PoW system used. On a basic level you have memory hardening, and that can be used to force usage of bulk memory on GPUs or bulk storage like with Chia. For the more complex PoW you can use speculative execution to make CPUs most performant like RandomX.
With bitcoin its more arbitrary but you can see how they could hard-fork to a different hardware-favoring system if desired.
With Bitcoin specifically, I literally cannot imagine a serious number of people considering a hard-fork that removes the sole reason it's attractive as a currency.
Giant buildings in the desert with solar cells on top. No need for distribution lines. How many people are actually necessary to staff one once it is up and running? Bury the building with the desert soil for insulation.
I think you massively overestimate the generation capacity of a PV cell. If you cover all the surface area of a datacenter with PV cells, it will generate a small fraction of the power required.
I didn't illustrate the thought clearly. I didn't mean that the building's roof would be the only source of PV cells. The solar farm could grow all around the data center, but the roof would not need be a hole in the farm.
Your idea could perhaps work only in space, a bit closer to the sun, operating at peak power generation 24x7. On the ground it takes a lot more area in panels than is used by a datacenter.
Okay, so have AI build a nuclear plant in the desert so when they run it at 115% on the reactor, it's in the desert away from people. It's not like they'd be concerned about downwinders. Put the plant and the data center right next to each other again to avoid distribution lines. If they want power, make them figure it out. It should not EVER mean that normies have to sacrifice because AI wants
You are all over the place. In any case, nuclear fission energy doesn't work without a river providing steady cold water for cooling. There is no such water in the desert.
It's intentional. I'm just tossing out ridiculous ideas for a ridiculous use of electricity.
the first thing that comes to mind is that you need a big ultimate heat sink for a reactor. The efficiency of a power plant increases the colder you can get the condenser because of the rakine cycle.
Nuclear plants pair well with big water infrastrucure projects. Forced convection is just a really effective form of heat transfer
It is the first meaningful demand growth this century for the electricity industry
How is this bad? Are the utilities just lazy?
But that's what the article is about.
The utilities are being asked to make massive speculative investments in transmission infrastructure, but are dubious that the demand will actually be there when those projects finish in half a decade, and they'll be left holding the bag.
Also, infrastructure investment has a very long return on investment. (power plants for instance need to run decades to make back their profits, especially nuclear power plants.
Other forms of energy generation come and massive ecological costs. Are we really prepared to spend this much energy on a speculative technology? especially when it is destroying the planet while doing so?
“to make back their profits” - is electricity / energy generation usually all owned by for-profit companies and not at all by government/public? Is it any different in USA vs other countries?
I feel that energy generation (key component if we want to grow as a species) should be helped/sponsored by governments and not really expected to turn any profit.
we should already be spending a ton on renewables and transmission capacity.
this is a good way to ensure emissions become sustainable
This is why long term offtakes exist. The customer can prove their conviction and share in the risk. Extremely commonplace.
that doesn't help too much if the utilities expect the companies to be around in 10 years
> How is this bad?
The power is being used wastefully.
Who decides?
Billionaires.
Sorry, I mean, "the market".
Billionaires decide if a thing is wasteful?
I searched this article for "environment" and found nothing. Environmental costs and the source of that electricity is huge.
The global IT infrastructure is expected to use 1/5 of the world's energy budget in 2025 by some estimates. The AI hype has the potential to push this even further in the next years. Considering we're in the middle of a climate crisis and racing to shift the energy matrix to renewables, having IT be a main responsible in increasing demand is absurd, we should be dramatically _decreasing_ energy demand.
When Bitcoin was doing this, people were raising an alarm
But AI fans will shrug and say “this has always been happening, AI is nothing new”. The usual refrain.
Also, AI is way more useful than blockchain etc etc.
Crypto currency promised to overthrow the bankers, so they are bad and their energy waste is also bad for environment.
AI intends to overthrow expensive people(costs) and make the bankers as well as investors plenty money. Climate change can wait, once AGI is achieved, it'll figure out how to solve all the climate issues and all will be well.
That being said, AI here is no different from crypto, only diff. is, AI has immense backing and lobbying. Even our EU climate friendly overlords are parroting that AI will improve everything and more adaptation of AI is needed in all businesses and investment must be injected into anything that has AI. So, all is well in the end.
The west needs to get over nimbyism and build infrastructure again. It's frankly embarrassing how much the west has crippled itself and then exported manufacturing to counties with much less regulation.
It's an easy thought to have. I live in one of the US's larger metro areas in a leafy, former streetcar suburb then annexed, neighborhood. Near me, just down the street, is an old industrial plot that supplies materials and tools for other industrial uses. Their trucks are large. Their lots are small. Each day is a dance of large flatbeds loading up for the next day, moving in and out of the lots, and other customers and their large flatbeds coming to stock up. Many leave by driving down the street in front of my house.
Is it annoying? Yes. Their trucks are heavy enough to shake the house when they go over a bump. They are loud as hell too. [1]
Do I want to shut the company down? Of course not. They are my neighbors, for better or for worse. I have to try to make the relationship work. They employ dozens of people and make it so other companies can build things easier in my city.
The instinct, however, is to think "I wish they would f** off with their big dumb trucks and their blocking traffic and their dangerous blahblahblah. I'm fine with industrial supply companies, but not in my backyard!". It takes an effort to stop yourself and remember to recognize their value. I could lose my job tomorrow, and maybe walk down the street and ask them if they need another set of hands moving gas cylinders around. I might one day need their services, or need the services of someone who needs theirs.
1. I wish the federal government would regulate the amount of noise pollution coming off some of these vehicles, yes, but that isn't a local issue.
People who are very sensitive to noise should not live in cities, which are, in fact, noisy places. If you want to live in the countryside, move to the countryside. Shutting down cities and moving all manufacturing to Muslims slaves in China is not a reasonable response to some few people in cities not being able to come to terms with what a city is.
And it's not clear to me at all why you want people who do not live in your city to force the people in the city to adopt rules they don't want.
Is AI using more or less power than crypto is/was at it's "peak"?
If you care about this, let's take cryptocurrency offline first.
Crypto still uses many multiples of the power consumed by AI, and unlike AI it can _never_ improve and provide more utility per watt since it is inefficient by design.
AI is on track to eclipse Bitcoin consumption.
I believe that chips will get more efficient as they get tuned towards AI needs. Also, energy costs will continue to fall as they have for thousands of years. Think about this, at one time we would have to put a lot of wood or animal matter to get enough energy for a few hours of light at night. Now it takes very few resources to get enough light for a whole night. It's so relatively inexpensive that we can light an area all night without having to think twice about the cost.
Energy will get so inexpensive in a few years (10?) from now that power consumption by AI will not be a problem.
> Energy will get so inexpensive in a few years (10?) from now that power consumption by AI will not be a problem.
By what mechanism? Wishful thinking?
By the continued progression of solar and storage down their aggressive experience curves.
> Energy will get so inexpensive in a few years (10?)
Any evidence for that? I predict the exact opposite. The price of energy will rise.
Power so cheap that it did not have to be metered was the promise of Nuclear power but it got sidelined because of safety concerns. Given that climate change mandates a less polluting power source Nuclear power will get a new life which dictates that it become safe to operate. I predict that safety will increase over time. Even now there are experimental reactors that are fail-safe. It's only a matter of time before Nuclear reactors start to generate cheap safe energy. Here's a company that's working on it now: https://www.terrapower.com/about/
Also, solar power is making a large dent in our power needs.
https://climate.benjames.io/solar-off-grid/
It's a start but give it time.
I have a hard time imagining how any of that will lead to cheap abundant power in ten years. In principle on a high level a lot of this is easy. Actually doing it is not.
Are you kidding me, it's already cheap and it's going to get cheaper. I, a one-income person, can get up and use power throughout the day, every day at a fraction of my income. That's cheap. And I'm one of millions, if not billions. I think you're thinking free. Free is not going to happen anytime soon but cheaper than today is coming.
Heard of the Jevons paradox?
I've heard it's mostly a fallacy. Jevon's paradox is the assertion that demand for energy is so elastic that increases in efficiency increase demand so much that this overwhelms the savings from efficiency. And in most cases this isn't true. One must be careful when looking at historical evidence to not say "efficiency increased, and demand increased, therefore demand increased because of efficiency", which is just a post hoc non sequitur.
I guess your point is that as energy gets cheaper demand will increase therefore negating the savings. Well, that has not been the case when it comes to power. Look at the cost over the last 200 years and you'll see that the cost has dropped over that time. Energy cost is a fraction of what it was then but demand has exploded. There's no reason to think that things will be different in the future.
Why is AI scrutinized while Search, Social, and Streaming all get a free pass?
I guess you'd have to figure if it was really worth it.
If so, to who, and why?
100 years ago was there this much bad-faith handwringing about all the new roads they needed?
What do mean by "they"? EDIT: who do you mean by "they"? (Rephrasing since some readers don't get that intent of the original question.) The handful of corporations interested in transport? Roads were a broad-based need. Roads have been built, used, maintained for thousands of years. The interstate highway system came from a government initiative, if there was a "they" it was broad-based enough to be "us". Railroads served needs that had existed for a long time and it was very clear what their use was from the time they were conceived, and there were more than a handful of participants in the movement of goods and people, since producers wanted greater reach and consumers wanted better access. By contrast to the very small number of "they" asking for more elecricity for data centers. How many people involved in the discussion are asking for the AI companies to be getting this juice?
[flagged]
No, but there really should of been. We've largely been conned into accepting a highly un-scalable transportation infrastructure by the automobile and oil industry.
Can you believe these “mammals”, burning energy around the clock to keep their blood warm all the time?
In the 60s there were, and they were right: https://en.wikipedia.org/wiki/Highway_revolt
You could go on newspapers.com (free for 7 days) and look at those old papers. I know that the Transcontinental Railroad was intensely controversial.
What's "bad-faith" about it?
OP is saying the opposite: the TCR required huge investment, and was massively speculative, with a huge bubble ensuing. But rail travel did revolutionize the world, and few people sat around asking whether or not it was worth it.
TCR could have been justified by everyone having massive faith in the future, as OP is suggesting happened with roads. But you're quite wrong that "few people sat around asking whether or not it was worth it", as Iron Empires details:
https://www.amazon.com/Iron-Empires-Robber-Railroads-America...
it was hugely controversial in Congress.
I don't happen to know about roads, since that wasn't one single thing. But I doubt they happened because of blind faith in the future, either -- it was probably more businesses demanding roads NOW. So the argument that no one questioned them is dubious at best.
Sorry, you are correct. It was controversial.
What I meant to say was that the AI bubble is feels different in that there seems to be relatively more skeptics versus railroad mania or the dot com bubble (but this could just be skewed by my own experiences).
Whether or not this suggests a flawed value prop for AI is another story.
https://archive.ph/rS3ze
> American Electric Power, which owns the line, has proposed a new, higher electricity rate for data centers and cryptocurrency miners that would lock them in as customers for a decade. The companies are balking.
Look at that! Net Neutrality comes to the electrical wire. They could have charged different rates based on industrial/residential or volume but that wouldn't be optimal rent extraction.
This is actually a really great article about the weird contract dynamics of large power customers and the chicken-egg problem of needing commitment for a certain amount of guaranteed spend to justify the cost of servicing them. It has nothing at all to do about AI.
Comparing this to net neutrality just poisons the well when discussing NN. Internet service providers being able to arbitrarily adjust pricing based on data source stifles competition. Is there competition in the power supply industry where a client can pick their source? Well, aside from having their own generation. In this case transfer is the service and if one day huge demand cluster disappears the capacity for it is left to rust.
I don't think your point disagrees with mine. Charging based on demand is fine, requiring take-or-pay contracts when your request requires expensive grid upgrades is fine. Charging more because it's a datacenter as opposed to heavy industry, not fine. That's the part that mirrors NN.
But to directly answer your question, yes there is competition. In most states, Ohio being one of them, you can choose who provides your power generation. And since companies are shopping states for where to build data centers AEP has a lot of competition for delivery.
https://archive.is/rS3ze
how is this stressing a grid that has to shed huge amounts of load to maintain availability off peak? instead of shedding the load, just price it effectively and the demand will even out and be a more efficient use of the fuel or generating station. the problem with our energy infra is a lack of consistent demand, and both AI and proof of work create the demand and a consumer of last resort that would make generation way more efficient.
afaik, the main compute load is done in training, not in the queries. this article sounds like astroturfing a pretext for regulation under the auspices of "climate."
also, the diminishing value of cash is accelerating so taking todays dollars and putting them into tomorrow's energy is probably the most fundamentally sound economic use of capital today.
power generators were loaded with debt and used as public sector slush funds (in canada where they were nominally publicly owned) and now the companies are not very productive because they have to pass on the debt service cost to consumers, and prevent anyone from entering the market to offer competitive service that would interfere with that debt service. if you build new energy infra, you need to protect it from managers piling it with debt to loot it, but if you solve that real problem, demand is not a "problem," it's the most valuable thing in the universe.