Microsoft CEO Satya Nadella says that energy costs of using AI and AI related infrastructure will play an important role in dancing who wins the AI race. Ever-since artificial intelligence has arrived it has disrupted industries having an impact especially in the tech industry. In a report by CNBC Satya Nadella believes increasing power demand of AI data centers will test patience of societies since energy is already a valuable resource.
What are tokens?
Since more countries are racing to build AI infrastructure to capitalize on the technology’s promise of huge efficiency gains. However Satya Nadella told the World Economic Forum that “GDP growth in any place will be directly correlated” to the cost of energy in using AI. He indicated further of a new global commodity in “tokens” which is a basic units of processing that are bought by users of AI models, allowing them to run tasks.
In simple terms he means that the motive and aim of countries aiming to develop AI infrastructure is to translate these tokens into economic growth. “The job of every economy and every firm in the economy is to translate these tokens into economic growth, then if you have a cheaper commodity, it’s better.”
Increasing power consumption of data centers?
“I would say we will quickly lose even the social permission to actually take something like energy, which is a scarce resource, and use it to generate these tokens, if these tokens are not improving health outcomes, education outcomes, public sector efficiency, private sector competitiveness across all sectors,” Nadella said.
Microsoft which has itself been spending on building data centers to power AI expected to spend $80 billion on the construction of AI data centers. A total of 50% of the tech giant’s spending is outside of the U.S.
Europe needs to be competitive!
Since Europe has some of the highest energy costs in the world, which rose after Russia’s full-scale invasion of Ukraine in 2022 and the subsequent sanctions.
Therefore it being generous in allocating more energy to power data centers will be a foolishness. In this context Satya Nadella said region needs to have more of a global outlook to be successful in the age of AI.
“European competitiveness is about the competitiveness of their output globally, not just in Europe,” he said. “I think sometimes when you come to Europe, there’s a lot of conversation about just Europe.”
