Good morning.
There can be no discussion about the growth potential of AI without attention to the energy needed to power that increased capability and adoption. The International Energy Agency estimates that global electricity demand from data centers could double from 2022 levels in the next two years—roughly equal to Japan’s total energy consumption.
Exhibit A is Nvidia’s H100 graphics processing unit (GPU) chip, each of which consumes more energy than the average U.S. Household in a year. Yesterday, CEO Jensen Huang unveiled an even bigger and faster superchip. While the price per chip will go up, Huang said the overall energy cost will go down. To get to where the industry needs to go, there’s a good chance Nvidia will need to increasingly rely on its frenemy Intel.
Intel, which trails Nvidia in the chip-making race, last month launched a foundry to make chips for others, much like TSMC.
For those who care about sustainability, that could be a very good thing. Intel has long been a leader in sustainable semiconductor manufacturing; Intel’s name comes up a lot in conversations about renewable energy use and carbon emissions. With partners like Siemens and rival chip designer Arm, Intel Foundry could pave the way to a much more energy-efficient supply chain for the AI era—including for potential clients like Nvidia.
I spoke with Intel CEO Pat Gelsinger ahead of Intel’s first Sustainability Summit, which kicks off today in Santa Clara, Calif. “There are three words that I care about: resilient supply chains, sustainable supply chains, trusted supply chains.”
Does sustainability rank as high for Gelsinger as, say, resilience? Well, no. After all, energy needs are both a challenge and an opportunity as companies like his race to keep up with demand. “I believe most data centers will be fundamentally power-limited for the rest of the decade,” says Gelsinger, noting that leaders are already worried about having access to enough power, green or not. As evidence, he cites the anxiety of utility operators that are coping with unforeseen demand from data centers and the growing appeal of power-rich destinations like the Middle East and Iceland as places to build capacity.
With that kind of geographic arbitrage and the transformative power of AI, Gelsinger notes, there must be a business-wide focus on building a sustainable high-growth industry. Ergo, the need to convene policymakers, customers, rivals, scientists and partners to discuss the innovation, collaboration, and policies needed to get things done. As he puts it, “30 years of bad policy in the U.S. And Europe doesn’t get fixed with one three-year bill.”
Cedrik Neike, CEO of digital industries at Siemens, says the foundry partners are trying to build a sustainable design process that meets everyone’s needs. “Sustainability is on everybody’s agenda. Europe is a very regulated environment. The U.S. Is working much more around incentives. We’re trying to build something that works for regulations and incentives.” And they’re adapting the blockchain system developed by the food and beverage industry to add another key ingredient: Trust.
Diane Brady
@dianebrady
[email protected]
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AROUND THE WATERCOOLER
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This edition of CEO Daily was curated by Nicholas Gordon.
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