The AI Revolution: A Catalyst for Economic Growth, a Call to Address Its Environmental Impact
I have spent the last decade working to address the climate emergency.
In finance, I co-founded and led i(x) Net Zero, an investment platform focused on the energy transition.
Following that I have co-founded and led WasteFuel, a groundbreaking bio-energy company focused on converting landfill waste ino low carbon fuels.
On the philanthropic front I co-founded the Climate Emergency Fund which works to support climate activists around the world, including some I don’t always agree with.
Finance, fuels and philanthropy are fundamentally important as we work to decarbonize the global economy. But there is a critically important new front in the war against carbon emissions: the hyperscale data centers that power artificial intelligence.
Artificial Intelligence (AI) is the next frontier of innovation, promising to unlock unprecedented economic growth, democratize the business landscape, and even offer solutions to some of the most pressing challenges facing our planet, including the climate crisis. This new era of AI is not just a technological revolution but a societal one, with the potential to reshape industries, create millions of jobs, and empower individuals across the globe. Yet, as we stand on the brink of this transformation, we must also confront the hidden costs of AI — namely, the immense energy and water demands of the hyperscale data centers that power this technology. If we are to realize the full potential of AI, we must ensure that it is underpinned by sustainable infrastructure, balancing innovation with environmental stewardship.
The Promise of AI: Economic Growth and Democratization
The economic opportunities presented by AI are staggering. According to a report by PwC, AI could contribute up to $15.7 trillion to the global economy by 2030. This growth is not limited to high-tech industries but spans sectors as diverse as healthcare, finance, manufacturing, and agriculture. AI-driven automation and efficiency improvements have the potential to increase productivity, reduce costs, and create new business models. For example, AI can optimize supply chains, predict market trends, and even personalize consumer experiences on an unprecedented scale.
Moreover, AI has the power to democratize the world of business. Small and medium-sized enterprises (SMEs), which traditionally lack the resources to compete with large corporations, can leverage AI to level the playing field. Through AI-powered tools, SMEs can access advanced analytics, automate routine tasks, and reach global markets with greater ease. This democratization of technology can drive innovation at all levels of business, fostering a more inclusive and dynamic economy.
AI’s potential extends beyond economic growth. In the fight against climate change, AI can play a crucial role in developing sustainable solutions. From optimizing energy consumption in buildings to improving the efficiency of renewable energy sources, AI offers a range of applications that can help reduce carbon emissions and mitigate the impact of climate change. The use of AI in climate modeling, for example, allows for more accurate predictions and better-informed policy decisions, providing a vital tool in the global effort to combat this crisis.
The Environmental Cost of Hyperscale Data Centers
However, the AI revolution comes with a significant caveat. The backbone of AI — hyperscale data centers — requires vast amounts of energy and water to operate. These facilities, which house the servers and storage systems needed to process and analyze the immense volumes of data generated by AI, are among the most resource-intensive components of modern technology infrastructure.
Consider the energy consumption of major tech companies. Google, for instance, consumed 15.5 terawatt-hours of electricity in 2020, equivalent to the energy use of 1.5 million U.S. homes. Microsoft’s data centers use nearly 8 terawatt-hours annually, while Amazon Web Services (AWS) consumes around 12 terawatt-hours. These numbers are only set to increase as AI adoption grows, leading to a corresponding rise in demand for data processing power.
The environmental impact is not limited to energy use. Data centers also require enormous quantities of water for cooling purposes. In 2020, Google’s data centers used approximately 3.4 billion gallons of water, while Microsoft and Amazon consumed 1.7 billion and 1.5 billion gallons, respectively. This water use is particularly concerning in regions facing water scarcity, where the operation of data centers can exacerbate local environmental stress.
The Urgent Need for Sustainable Data Centers
As the AI revolution accelerates, the data center industry must take the climate emergency seriously. It is not enough to simply provide the computing power necessary for AI to flourish; this power must be green, sustainable, and aligned with the goals of the Paris Agreement.
Several initiatives are already underway to address the environmental impact of data centers. Google, for example, has committed to operating on 24/7 carbon-free energy by 2030. Microsoft has pledged to become carbon negative by 2030, and AWS aims to power its operations with 100% renewable energy by 2025. These are commendable goals, but they must be met with action and accountability.
The path forward requires a concerted effort from the tech industry, governments, and civil society. Policymakers must incentivize the development of green data centers through subsidies, tax breaks, and regulations that encourage the use of renewable energy. Tech companies must invest in research and development to improve the efficiency of data centers, exploring innovative cooling solutions, energy storage technologies, and waste heat recovery systems. Moreover, transparency in reporting energy and water use is essential to ensure that progress is being made and that the industry is held accountable.
The AI revolution offers a transformative opportunity to drive economic growth, democratize business, and tackle global challenges like climate change. But to truly reap these benefits, we must ensure that the infrastructure supporting AI is sustainable. The future of AI — and indeed, the future of our planet — depends on it. By embracing green computing power, we can harness the full potential of AI while safeguarding the environment for generations to come.
