Artificial Intelligence has a major electricity problem, in the sense that it simply cannot have enough of it. As AI continues its exponential growth, investors are becoming increasingly concerned about the energy grid’s ability to meet the relentless power demands of AI technologies.
In response, AI investors are taking proactive steps to address this challenge, investing heavily in green energy startups like Exowatt, as per a report by the Financial Times. Leading the charge, is OpenAI CEO, Sam Altman.
Altman, venture capital firm Andreesen Horowitzin, and several other investors have injected about $20 million into Exowatt, a startup focused on providing renewable energy solutions tailored for data centres.
This investment reflects a broader trend among investors, ranging from Big Tech to private equity, who are collectively pouring billions into energy and data infrastructure to support the future development of AI.
How Altman positions himself
Because of how OpenAI is positioned in the industry, they are able to foresee every problem that AI companies and Big Tech will face in the next couple of years. Accordingly, OpenAI’s CEO has been investing in businesses and companies which he thinks will be in a position to solve those problems.
A great example would be how Altman has been trying to set up his own chipmaking company and foundry to develop AI chips for data centres.
Investors like Altman believe that solar technology or nuclear power projects like that of Exowatt’s, are crucial to meeting AI’s energy demands. Altman has also invested in nuclear energy startups like Helion and Oklo, emphasizing the urgency of breakthroughs in energy technology.
Exowatt’s lofty goals
Exowatt, although relatively unknown, aims to supply AI companies with modular solar systems which are capable of providing nearly free energy. This approach aligns with the growing interest in renewable energy among AI companies, offering a cost-effective alternative to traditional energy sources and bypassing regulatory hurdles associated with grid connection.
Hannan Parvizian, CEO and co-founder of Exowatt plans on achieving a target cost of one cent per kilowatt-hour, significantly undercutting the current industrial energy cost. Exowatt’s technology relies on a modular solar platform combined with thermal energy storage, promising a scalable and sustainable energy solution.
Challenges aplenty
Despite Exowatt’s innovative approach, several challenges remain. The science behind thermal energy storage is not new, but widespread adoption has been limited. However, Parvizian remains optimistic, citing the suitability of solar technology for data centres, particularly in sun-rich regions where many data centres are located.
The exponential growth of AI, driven by computing-intensive tasks like large language models (LLMs), has exacerbated energy demands. Data centres, equipped with powerful AI chips, consume significant amounts of energy, prompting the need for innovative energy solutions like Exowatt’s.
While Altman’s investment in Exowatt represents a fraction of his wealth, it underscores the importance of developing sustainable energy solutions for AI. However, the commercial implementation of Exowatt’s technology remains pending, and the current energy grid can still meet AI demands, at least for now.
Despite the long-term potential, industry experts caution that significant impact from initiatives like Exowatt may take years to materialize. Nevertheless, investments in innovative energy solutions signal a proactive approach to addressing AI’s insatiable hunger for power and ensuring a sustainable future for technology development.
(With inputs from agencies)
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