We're currently experiencing a rapid rise of data centers offering power, computing resources, and financial benefits throughout the United States. However, the surge in data centers could quickly falter unless if we don't begin developing and funding AI solutions that extend past simple chatbots or assistants to address tangible issues in everyday existence, such as safety, cost, medical care, and refuse disposal.
TL;DR
- The US is seeing a rise in data centers, but this growth may falter without AI solutions for real-world problems.
- Investment needs to shift from infrastructure to applications that provide sustainable return on AI investments.
- AI can revolutionize industries like waste management and healthcare by improving efficiency and problem-solving.
- The next AI era requires practical applications that integrate with tangible systems, not just massive AI models.
While recent investments from tech giants like Amazon and Nvidia suggest a capital expenditure (CapEx) bubble remains far off, the possibility floods headlines. True insulation requires meaningfully redistributing investment from CapEx to creating the apps and services required to achieve sustainable ROI on billion- and trillion-dollar infrastructure bets. It involves launching a new phase of the AI era that Goldman Sachs prices at $8 trillion.
Infrastructure is part of the equation, not the whole game
Rewiring Americaprojects Over the coming five years, the country's need for electrical power is projected to increase by 128 gigawatts. Concurrently, data centers, both those currently being built and those in the planning stages, will contribute an additional 93 GW to the power supply.
A quick calculation demonstrates the necessity of ongoing capital investment in building the physical infrastructure required for the AI competition. The United States' private industry should spearhead efforts to enable community and national power grids to manage substantial electricity and computing demands. Major corporations such as Amazon, Nvidia, and Google, alongside venture capital-backed new ventures like Crusoe and OpenAI, are actively engaged in this endeavor.
Nevertheless, a substantial chance exists to develop the application layer, enabling AI to expand into the physical realm and guaranteeing that data center expenditures are fully justified.
There's a history of this happening in prior periods. The AWS we recognize now originated from Amazon's internal system that supported company functions. Jeff Bezos and his colleagues not only created adaptable infrastructure but also identified a massive commercial potential to market and offer it to business clients.
Amazon Web Services now serves as the foundation for today's internet. A significant factor is its design, which was intended to assist developers in building and then expanding applications for a vast number of users.
Consider the App Store as another illustration. When Steve Jobs and his engineering colleagues (whom I was fortunate to join) established it, nobody foresaw that Uber, Instagram, or DoorDash would emerge. Nevertheless, it established the groundwork for a future that we understood was beyond our comprehension. The introduction of the App Store extended beyond merely offering access to smartphone owners; it empowered countless developers to create their own adaptable programs that integrate with daily existence in the tangible world.
Regarding financial backing, Kleiner Perkins collaborated with Apple on launch the iFund, a $100 million funding effort that supplied the essential resources for transitioning from capital expenditures to application development. Presently, the App Store features an application for virtually every need, covering areas such as identity protection, financial services, romantic connections, and arranging airport transportation.
Artificial intelligence is set to drive global applications, yet a substantial surge of entirely new apps is required to populate an app store. Each of these must leverage AI to enhance problem-solving capabilities, offering improvements in speed, cost-effectiveness, and overall efficiency, particularly at the intersection of technology and the physical realm.
Ensuring data centers power America into the future
During my tenure at Apple, we didn't merely initiate the smartphone age; we established an entire ecosystem. The iPhone's triumph stemmed from the software and services that the hardware, crafted for practical use, enabled. As we developed and purchased our path to supremacy in the app store, alongside delivering an exceptional iPhone, we recognized the commercial value of the application layer and strove to integrate a vast network of developers.
An opportunity exists to do similarly for AI. However, an AI app store proves ineffective without populating it with applications that connect to the tangible systems influencing our everyday existence, such as: power, sustenance, refuse, hydration, transit, the constructed surroundings, and medical services.
These industries are crucial for the well-being of people across the United States. However, they also face challenges with sluggish output and significant difficulties in expansion.
Consider waste management. At Mill, our efforts are focused on achieving circularity for food waste, transforming what was previously discarded as refuse into a valuable asset that can be reintegrated into the food supply chain. Artificial intelligence possesses the capability to significantly enhance the efficiency of such systems, ranging from decreasing the time individuals dedicate to daily tasks to automating recycling processes and optimizing collection paths through the use of computer vision.
Within the medical field, we've begun to observe how artificial intelligence can expedite the process of finding new medications, streamline day-to-day operations, and tailor treatments to individual patients.
None of these are moonshots, but they all require builders and investors.
The next phase of industrial AI
The most significant financial prospects for America are found in integrating AI into sectors and applications impacting every home and enterprise, rather than in developing increasingly massive AI models. The upcoming surge of industrial AI will be supported by national data centers and infrastructure. Naturally. However, its complete capabilities won't be achieved unless we begin creating practical, real-world applications. Starting now.
By collaborating with Top American innovators, we deliver a flexible and scalable AI application layer. This approach also shields data center expansions and AI advancements from fluctuating market conditions. It's our method for navigating any AI bubble. Crucially, it guarantees the U.S. Avoids a data center surplus that would waste vast sums of money and extensive human effort.
I'm certain that data centers will function as manufacturing hubs for the subsequent stage of advancement, where artificial intelligence intersects with the tangible realm across industries that fuel the nation's society and economy. However, they must yield a profit for constructors, corporations, and localities by allowing AI to generate beneficial outcomes. This won't materialize unless investors redirect their attention and funds from foundational elements to software applications and developers deploy actual AI solutions engineered to utilize enhanced capabilities for resolving genuine issues affecting everyday existence.
Let’s get to work.
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