Engaging articles of the week
Data center news…can’t go a day without touching on that, can we…stuck my head into the info flow earlier this week and saw some chatter that pops up now and then: “Calm down, AI/data center power demand isn’t going to amount to all that much, Microsoft pulling back big.” Hmm, interesting. So I tracked down the story. As usual, have to read the whole thing. Yes, Microsoft is pulling back construction of a few data centers, as described by Reuters, which of course went into the headline (first warning sign in the headline itself – ”…analysts say”), the rest of the story is something different. Microsoft explains that while it may “strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions.” They then reiterate that their $80 billion AI infrastructure capital budget for the year remains intact. The US government has, after all, declared AI a national priority. Good days ahead for energy providers. Story here.
The next most common knock against AI’s looming power demand is the “yeah but they’re all going to get more efficient, so power demand forecasts way overblown, etc…” This is another reflexive reaction, one of those axioms that people assume will always exist because it’s worked that way in the past. Not so fast there. Nvidia announced a new AI rack (the Rubin Ultra NVL576) that will offer a 14 times improvement in processing capability over the previous generation. That is indeed a significant efficiency gain, but the new rack will use 600kW, several times the old one, so while efficiency gains, so does overall power consumption, because companies will just use more of them – that’s how AI works, the more powerful the better. Nvidia’s CEO Jensen Huang made the repercussions clear: “This transition is going to take years of planning, this isn’t like buying a laptop, which is why I am telling you now. We have to plan with the land and the power for data centers with engineering teams two to three years out, which is why I [am showing] the roadmap.” Story here.
Next growth industry – therapists for AI? A new study finds that ChatGPT can experience anxiety when fed certain information or requests, which “manifests itself as moodiness towards users and being more likely to give responses that reflect racist or sexist biases.” Who saw that coming, all those big new data centers are going to have to go on antidepressants. How do you console artificial intelligence? Big Pharma? Cannabis for machines? Story here.
Wandering far away from the energy world, sort of, but who cares – interesting is interesting. There is a race currently going on in the South China Sea. Not boats, not swimmers, but…island building. According to the Asia Maritime Transparency Initiative, Vietnam has created a record 1,333 acres of new land between November 2023 and March 2025. Vietnam has now completed a total of 3,319 acres, which is a fair chunk, but is smaller than the current race leader, China, who has created 4,650 acres. These acreages are very strategic, expanding tiny islands across a vast network known as the Spratly Islands, making these little blobs of land big enough to host landing strips and military camps. China, surprise surprise, is not amused, because there is vast wealth in those seas, including petroleum, and isn’t it just great to know there is something else to fight about now. Story here. (One big reason why these tiny little islands are so important: The WSJ ran a story about a new US missile system being deployed in the Philippines that can travel 1,200 miles; the article is entitled “The U.S. Missile Launcher that is Enraging China” and well I guess it all makes sense and no not all headlines are crap. That story here.)
Finally, news of a significant breakthrough in financial engineering, likely to revolutionize the lives of hundreds of thousands of basement-dwelling techies: DoorDash has teamed up with a payment company to provide fast food deliveries payable on a low-or-no interest instalment plan. You could also call this scheme “the credit card from hell”; credit cards obviously offer the same service, but start sucking your blood instantly via huge interest costs, which has at least somewhat of a throttling effect. This scheme could potentially blow up consumer credit levels, and make everyone even fatter. Yay progress. Smartasses all over the web had a field day, pondering how long it will take the financial services industry to bundle outstanding Big Mac loans into collateralized debt obligations and selling them to rubes everywhere, or whether these debts will get sold to the mob who will come a-knocking, bats in hand, looking to collect on last month’s overdue burrito bill. Story here.
Hey look everyone loves pipelines. Took a while but find out why that turn was inevitable in The End of Fossil Fuel Insanity – the energy story for those that don’t live in the energy world, but want to find out. And laugh. Available at Amazon.ca, Indigo.ca, or Amazon.com.
Read more insightful analysis from Terry Etam here, or email Terry here.