00:00People across the country have concerns over the electricity demand AI is expected to require.
00:06But is a skyrocketing electricity demand real or overhyped?
00:13Jonathan Cumi remembers the hype of electricity demand from decades ago.
00:18Before the dot-com bubble, people believed computers would end up using half of all the electricity produced in the U.S.
00:24And I found that these guys had overestimated electricity use by a factor of 2,000.
00:31And what we found across the board was that the factors, you know, the exaggerations were big and almost universally exaggerations.
00:42Now Cumi worries the power consumption hype is playing out once again with AI.
00:47The largest electric grid in the country expects to see demand increase by 70,000 megawatts in the next 15 years.
00:54That's slightly less than half of the current peak for that zone, which covers several mid-Atlantic states and Chicago.
01:02Meanwhile, nationwide, estimates vary.
01:05Power sector consulting firm Grid Strategies projects a nearly 16 percent increase by 2029.
01:12But how accurate are those forecasts?
01:14The forecasts that we're seeing right now are basically like what the tech industry wants to happen and what they're selling to their investors.
01:20So obviously they're painting a very, you know, rosy picture of how much AI is going to take off.
01:27But the reality is that their financials don't match that picture that they're painting.
01:32Those big numbers can also help utility companies get the funding to build more power plants.
01:37When a utility gets permission from the Public Utility Commission to build a power plant, it means that that utility is going to be able to recover the cost of that power plant plus a commercial rate of return, whether or not that plant is ultimately needed or not.
01:56Meaning the bigger projections are good for both the tech and utility companies.
02:00There was a collusive arrangement between big tech companies and electric utilities to intentionally create a sense of hype and panic around the energy consumption of AI because both had a shared financial interest in doing so.
02:22One thing making those projections bigger, duplicate data centers, sometimes called phantom data centers, when tech companies want a new data center, they file a request with a utility company.
02:34Those utility companies report the number of requests to grid operators who then use those numbers to generate projections.
02:42But the utility companies don't usually compare those requests with each other, meaning they might be counted more than once.
02:48Many data centers that are talked about and proposed and in some cases even announced will never get built.
02:58It's not just a case of it will get built somewhere.
03:01Many of them simply won't get built at all.
03:03Other critics of these projections say AI has not yet proven to be profitable.
03:09For example, the company behind ChatGPT lost $5 billion last year.
03:14If at some point in the next few years these models don't actually prove their profitability,
03:17obviously investors are going to be much less enthusiastic about them.
03:21For Straight Arrow News, I'm Kaylee Carey.
03:23For more of Keaton Peters' report on the energy demand of artificial intelligence,
03:28download the Straight Arrow News mobile app today or go to san.com.
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