Bringing AI Down To Earth

Producing more electricity will require more fuel. Extraction of coal and natural gas will have to increase; transport channels for those commodities will have to be widened. Construction of new plants, windmills, solar farms and dams will require capital, and could raise environmental concerns. Pipelines will have to be extended, and capacity for shipping liquified natural gas will need to be enhanced.

The equipment needed to turn fuel into electricity is in short supply. Turbines used in gas-fired power plants are on back order: lead times have stretched from a norm of two years to almost five. Competition for those components has intensified as "hyperscalers" seeking to create dedicated power plants for their data centers vie with traditional utilities. This sets up a conflict between public and private generators that could attract regulation.

Servers generate a lot of heat. Managing their temperatures requires water-based cooling systems. Water is scarce in some areas where data center construction has been most active, setting up potential conflict with farmers and residents.

Transmission will also be a significant challenge. Power cables are typically made of copper; prices have hit a series of all-time highs this year. Bloomberg anticipates a global shortage of 6 million tons of that metal over the next 10 years. Much of the infrastructure supporting electricity systems around the world is aged, and may not be able to safely handle increased loads without significant modernization.

Further, bringing new power plants online can sometimes create shocks to systems that result in unstable supply. Integrating electricity from different sources presents another set of challenges for the power grid, which engineers are working on feverishly.