Yahoo Finance Sam Altman Warns AI Development Needs An Energy 'Breakthrough' As Financial Pundit Says 'AI Data Centers Won't Run On Hopes And Dreams'
Users of ChatGPT and other competing large language models can be forgiven if they feel the responses are like magic. MIT's Technology Review even recently published an article titled "Nobody Knows How AI Works."
One thing that is known, though, is powering the advanced AI models captivating the world's attention requires massive amounts of energy. OpenAI's Sam Altman discussed this fact, warning that future advances in AI will consume significantly more power than people expect, saying "there’s no way to get there without a breakthrough."
As it stands, data centers around the world account for between 1-1.5% of global electricity use, according to the International Energy Agency.
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With the AI boom in its nascent days, Alex de Vries, Ph.D. candidate and data scientist at the Central Bank of the Netherlands, predicts that the AI sector alone will use about the same amount of electricity as the Netherlands uses a year by 2027.
Financial blog Zerohedge posted from its X account saying "those AI data centers won’t run on hopes and dreams," mocking hedge funds shorting energy stocks.
For investors interested in AI but concerned about lofty valuations in technology stocks, there could be opportunities in energy to play the AI boom.
The Vanguard Energy ETF (NYSE:VDE) has had a strong start to the year, up ~11%.
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For many in the tech industry, resorting to fossil fuels to further power tech isn't an optimal solution, especially as the world seeks to reach net zero by 2050.
Sam Altman is known for being at the forefront of AI, but he's also well positioned at what he sees as a possible breakthrough to address the energy crisis, saying "it motivates us to go invest more in fusion."
According to the International Atomic Energy Agency, "If nuclear fusion can be replicated on earth at an industrial scale, it could provide virtually limitless clean, safe and affordable energy to meet the world's demand."
Altman has invested $375 million into Helion, a private company seeking to commercialize nuclear fusion.
He's also helping nuclear fission startup, Oklo, to go public via AltC Acquisition Corp. (NYSE:ALCC).
With many of the world's brightest minds working on problems in AI, other exciting companies are working to solve the power needs of these AI companies in a sustainable way.
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