The best outcome for all of us is for tech companies to get into power. Tech got into telecom (dark fiber, undersea cabling) and provide free services (youtube, gmail, etc), which used to cost a lot historically. Everyone had to shell out a few hundred dollars/month just for phone calls (billed per minute) and txt messages. Now, we are at a point all communication is free. We can do video conferences with upto 100 people worldwide for free.
If tech companies get into power and break down the regulatory capture of utilities, they can make money off of energy storage and virtual power plants while providing free power for people.
I believe Microsoft is currently doing just that, reserving the output of Three Mile Island. The article was here on HN around a week ago.
I don't necessarily see anything wrong with that, and I can see the communication of demand changes back to generation being useful to those running the plant(s).
There’s a saying I’ve heard that this reminded me of, “if you owe the bank two dollars, that’s your problem, but if you owe the bank two billion dollars, that’s the bank’s problem.” I think it’s relevant because it shows how responsibility shifts as things scale. If you owe the bank a little money then you are just a regular customer and you deal with the bank’s policies. But if you are a big player then it’s up to the bank to negotiate with you and come to mutually agreeable terms.
These companies that have many big data centers are now big players. If they are stressing the grid they will need to be part of the solution in expanding the capacity and infrastructure, either by paying more to the electric companies or by including power infrastructure in their vertical integration. Microsoft has the right idea by investing in Three Mile Island, I think other big players will do similar things.
Unlike banks, grids have an obvious solution to this problem: stop supplying these players with energy when the grid is at significant risk of a black out.
I think many people read my statement and flipped who I thought the banks vs customers are. If you owe the bank $2 billion, that’s their problem- meaning they are exposed and could fail if they don’t negotiate to cover that exposure. If an AI company needs a bunch of power and can’t compute without it, then they are exposed and need to negotiate to make sure the power companies can supply it- they are no longer regular customers.
In my thought process, an analogous statement might be, “if you ask for 10 kilowatts from the power company, that’s the power company’s problem. If you ask for 10 megawatts, that’s your problem. If you (an AI company) ask for a historic amount of power and your business fails if you don’t get it, then it’s your responsibility to ensure the grid can supply that much power.
Banks have an obvious solution as do grids. Build their reserves and infrastructure and scale to their biggest customers. A stressed scale out system just requires more scaling. It feels weird to say any other solution, especially when the customer is a paying customer.
It only feels weird if you consider paying customers getting what they want has to be of the highest priority.
Others who are regular readers of IPCC publications might value the survival of big parts of earths habitable zones and the most densly populated costal areas higher. But priorities differ.
> Are you suggesting it should be illegal for these players to buy energy on the open market?
Part of the problem is the AI companies are unwilling to sign long-term power purchase agreements. That means the utility is on the hook for both the capital cost of the development and the risk of unloading a bunch of excess power if the tech company decides to relocate.
there is not and should not be an "open market" for power. the sale of electricity from the power grid is highly regulated, and for good reason. delivery to residential customers and essential services should always be prioritized over industrial bulk purchasers.
bulk purchasers already have the opportunity to use power sources that are not connected to the grid, if they want to use grid power they should be prioritized according to their benefit to society, not their cash on hand.
And sure, tell them they get disconnected first when there's a shortage. But a hard block is worse than taking their money and using it for improvements.
> they should be prioritized according to their benefit to society
The fact that they have the capability to pay for and consume this power is the strongest signal that they are indeed providing value to society. The money comes from somewhere. If that turns out not to be the case, they have the strongest incentive to stop.
But this sort of rationing at the hands of some regulatory body has historically proven to be a far more deadly cure than whatever the presumptive disease was.
That argument would require regular socialization and redistribution of all wealth. The market does not prioritize what the society needs, because individual needs are weighted by wealth and income.
In a Western society, everyone's needs are supposed to be equally important. We often don't even make majority decisions, because we assume that the constitutional rights of a minority are more important than what the majority finds reasonable.
> The market does not prioritize what the society needs
What do you think prices do? What do you think income is reflective of?
Companies that make lots of money provide things that lots of people are willing to pay for. This is the reflection of what people need. Exxon makes money because people want to stay warm. Cargill makes money because people want to eat. Apple makes money because people want to be entertained. Eli Lilly makes money because people don't want to die.
What do you know that millions of people all acting in their own self interest don't know?
Parent is saying that people with more money can affect the price signal more. That simply isn't as fair as weighting individuals equally. A lot of people don't like the economic impacts of this, so they tend to justify it rather than accept it as valid criticism.
A weighted average can be very different from the unweighted average.
In our current society, children can benefit from the wealth and social connections of their parents. That gives the needs of some people additional weight in the market without any actual merit. To get rid of that market distortion, children would have to be raised collectively without any contact to their parents.
There is a lot of wealth that has been created with business practices that later became illegal. Because we prefer not to punish people for actions that were legal at the time, we let people keep that wealth. But if we want the market to prioritize the needs of the current society, such wealth would have to be confiscated.
A society where the market actually reflects the needs of the society would be incredibly dystopian.
right, hospitals and farmers should just massively raise their prices so they can better compete with crypto miners, that will make the world better...
money is not a good indicator of value provided to society. there is a ton of ways where it falls apart, and there are a lot of people devoted to finding the ways they can collect the most money while providing the least benefit to society.
Spotting and stopping the odd case where it’s gone haywire doesn’t mean ditching market pricing across the board. You can just fix (maybe even only temporarily!) the part that’s doing wacky, undesirable stuff.
The Environmental Protection Agency (EPA) has many accomplishments, including:
Reducing air pollution
The EPA has reduced air pollution by regulating auto emissions, banning pesticides, and cracking down on factory and power plant emissions. New cars are now 99% cleaner than 1970 models, and the EPA's efforts have led to a decrease in smog and asthma cases.
Cleaning up toxic waste
The EPA has cleaned up toxic waste through the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund), which provides funding for cleaning up abandoned waste dumps.
Protecting the ozone layer
The EPA has protected the ozone layer by reauthorizing the Clean Air Act in 1990 to phase out chemicals that deplete it.
Increasing recycling
The EPA has increased recycling.
Revitalizing brownfields
The EPA has revitalized brownfields, which has led to increased property values, reduced impervious surface expansion, and reduced residential VMT.
Reducing water use
The EPA's WaterSense program has helped Americans save water, with a cumulative savings of 8.7 trillion gallons as of the end of 2023.
Banning cancer-causing pesticides
The EPA has banned or restricted many cancer-causing pesticides, including heptachlor, chlordane, EDB, daminozide, and chlorpyrifos.
Testing schools for asbestos
The EPA required all primary and secondary schools to be tested for asbestos starting in 1982.
Rating energy efficiency of appliances
The EPA introduced the Energy Star program in 1992 to rate the energy efficiency of household appliances.
EPA History: Documents about Agency Accomplishments | US EPA
Nov 17, 2023
the grid gets to choose how it prioritizes power. if they want too much power at a time the grid doesn't have enough to go around, they're likely fairly early on the cutting block
No, but we should have a discussion about if it is worth it to expense so much energy for something with very little hard, real use case. Al be it bitcoin or LLM's.
there is a lot of money behind AI, but i have yet to see any of them actually get us a use case which work reliably.
Not to mention, AI is fun and all, but that energy could be far better spend making the economy less reliant on fossil fuel.
The suggestion is that they can buy it at certain times, but not when the grid is nearing capacity. And yes, that's a perfectly reasonable thing for a society to decide.
It's shared infrastructure, mainly paid for by public funds. If a government decides the priority should be the millions over the few, that's what happens in a functioning government.
Or they can pay for their own power stations and infrastructure to be built.
Markets are neither open nor free, they are closed and regulated. So yes, block their purchasing, tell them to sort their own. Here's the thing, do you cut off one customer when supply is tight or do you risk political suicide by kicking the bucket to millions of small customers? Power utility companies will kick one customer, if they don't they will lose their social license to operate and get legislated out of business.
For emergencies, there are already methods to shut off power to low priority businesses. And say, keep hospitals open.
And, if you want to pay, you can pay a premium to have more 'secure' power. This is an option today, already. No need for any discussion about markets and 'government is holding back the free market'. There is already a market to pay for premium power. And the utilities can charge AI customers more if they want.
this is actually a major problem in the netherlands at the moment.
a part of the energy grid cannot handle the load being generated by all the solar being deployed, and upgrading the grid takes years.
In the meantime, bussinesses and even households simply are not getting a new power connection unless they are deemed of enough importance.
AI jerks will just start putting big red crosses on their buildings, open one 10'x10' space in their facility with some barely passed the exams to get a license type of doctor and claim it to be a medical facility of some sort. Just like other hospitals, they'll have a shortage of beds.
I'm only half joking as from what I've seen of those involved, I would not put this type of consideration past them.
I think you might misunderstand your analogy. If you owe the bank two billion dollars it's their problem because a missing 2 billion dollars is large enough to be painful for the bank.
And the bank stands to lose far more money than the company they have lent to who will just fold.
In renewable energy it is actually common for the funding institutions to be paid a cut of the profits and to have no recourse to repossess assets. They take all the risk because they provide all the funding. The job of the actual developer is to provide a project worth funding.
Are these AI companies already profitable or is it speculation that's causing them to get a ton of funding? AI is such a polarizing subject and I find it difficult to sift through all the hype and hate surrounding it.
Point to one single transformative invention that was accretive from day one. The ChatGPT moment isn't even two years old. I don't know for certain whether any of these investments are going to work out, but all of the current cash burn is forward looking. It may all come crashing down, but this is not the right analysis.
all inventions are accretive from day one, in the majority of historical bubbles the speculation was built on top of already profitable technologies but there was always one or two firms that were profitable to begin with. Modern bubbles (AI, Metaverse,Crypto) are speculative from the word go, there isn’t a single company that’s profitable in those verticals.
This certainly the model that basically all VC funded tech companies use. Though OpenAI is notable, because I don’t think we’ve seen another company burn this much money this fast.
Not a value statement on whether is this is right or wrong.
This predates modern VC by centuries. Early trade routes which connected humanity across continents were highly speculative, requiring huge amounts of capital, and were only profitable years later.
Yes, that single load took years. It required huge amounts of speculative capital, years of fruitless exploration, and as you say, multiple failed expeditions before it succeeded.
But what was the cost of producing that revenue? At what point do they expect to break even on their investment?
I can very quickly generate a lot of revenue if my investors will let me buy eggs at $0.50 each and resell them for $0.05, but I don't think I'd get any bites unless I could explain how that enterprise will eventually turn a profit.
But this is what the food delivery companies were (are?) doing. This is what Uber is doing. This is pretty much what every VC funded company does. They burn through the investors' money (because who cares it's not their personal money) until they get a foothold.
> They burn through the investors' money (because who cares its not their personal money) until they get a foothold.
Otherwise known as investing. Sometimes it works. Sometimes it doesn't. And the last 20 years has been chockfull of excesses absolutely. But Uber is profitable these days, and has genuinely transformed how people get around. It looked like a negative unit margin dog until it didn't.
it does seem very likely that $ per token of inference (at fixed quality) will continue to go down rapidly as hardware and software continues to improve.
It's better than that, OpenAI are stealing the eggs and lobbying to make egg theft legal, so long as you only steal eggs from small farmers and back yards. Because they can, by their own admission, never stay in business if they have to pay for the eggs.
If you can find a way to sell billions of dollars of eggs, even at a loss, people will invest. At scale you can increase the price of eggs, make the eggs cheaper, etc. Obviously the fact your eggs are artificially cheap is helping you sell them, but that won't be all there is to you as a seller.
People underestimate how hard it is to sell things: you could have the cure to cancer in your hands today and still need to lose mllions to get anywhere with it.
And it will go from 9% to 90% over the century. Big tech companies might as well avoid the middleman and evolve into the power generation business, although it's not hard with an open design of a solar farm in the desert.
Solar is better than nuclear for any application here. And remember, you can do your training in a location that has the world's best solar resource, not in (say) Finland.
Giant buildings in the desert with solar cells on top. No need for distribution lines. How many people are actually necessary to staff one once it is up and running? Bury the building with the desert soil for insulation.
I think you massively overestimate the generation capacity of a PV cell. If you cover all the surface area of a datacenter with PV cells, it will generate a small fraction of the power required.
I didn't illustrate the thought clearly. I didn't mean that the building's roof would be the only source of PV cells. The solar farm could grow all around the data center, but the roof would not need be a hole in the farm.
Your idea could perhaps work only in space, a bit closer to the sun, operating at peak power generation 24x7. On the ground it takes a lot more area in panels than is used by a datacenter.
Okay, so have AI build a nuclear plant in the desert so when they run it at 115% on the reactor, it's in the desert away from people. It's not like they'd be concerned about downwinders. Put the plant and the data center right next to each other again to avoid distribution lines. If they want power, make them figure it out. It should not EVER mean that normies have to sacrifice because AI wants
You are all over the place. In any case, nuclear fission energy doesn't work without a river providing steady cold water for cooling. There is no such water in the desert.
The point is that difficulty is adjusted in accordance with network saturation to prevent a 51% attack. The network is not inherently inefficient unless you're attempting to monopolize it - you are still rewarded for using more efficient mining methods than your competitors.
Which leads us to the GPUs. For a while everyone said ASICs (and the courageous ones, FPGAs) were the future of mining because they were inherently more efficient than GPU hardware could ever be. But it turns out that it's the other way around - mass-manufactured GPUs have access to more efficient silicon than any FPGA on the market could hope for. Similarly, AI chips that want to beat Nvidia on efficiency terms first have to climb a mountain of power usage that is inherent to their exponentially less-dense hardware.
The utilities are being asked to make massive speculative investments in transmission infrastructure, but are dubious that the demand will actually be there when those projects finish in half a decade, and they'll be left holding the bag.
Also, infrastructure investment has a very long return on investment. (power plants for instance need to run decades to make back their profits, especially nuclear power plants.
Other forms of energy generation come and massive ecological costs.
Are we really prepared to spend this much energy on a speculative technology? especially when it is destroying the planet while doing so?
one would think the human race would prioritize solutions like clean, renewable energy, food production, not USING energy to solve "AI problems" like summarizing my email, and putting Sly and Arnold in YouTube video remixes
I believe that chips will get more efficient as they get tuned towards AI needs. Also, energy costs will continue to fall as they have for thousands of years. Think about this, at one time we would have to put a lot of wood or animal matter to get enough energy for a few hours of light at night. Now it takes very few resources to get enough light for a whole night. It's so relatively inexpensive that we can light an area all night without having to think twice about the cost.
Energy will get so inexpensive in a few years (10?) from now that power consumption by AI will not be a problem.
Power so cheap that it did not have to be metered was the promise of Nuclear power but it got sidelined because of safety concerns. Given that climate change mandates a less polluting power source Nuclear power will get a new life which dictates that it become safe to operate. I predict that safety will increase over time. Even now there are experimental reactors that are fail-safe. It's only a matter of time before Nuclear reactors start to generate cheap safe energy.
Here's a company that's working on it now: https://www.terrapower.com/about/
Also, solar power is making a large dent in our power needs.
I guess your point is that as energy gets cheaper demand will increase therefore negating the savings. Well, that has not been the case when it comes to power. Look at the cost over the last 200 years and you'll see that the cost has dropped over that time. Energy cost is a fraction of what it was then but demand has exploded. There's no reason to think that things will be different in the future.
how is this stressing a grid that has to shed huge amounts of load to maintain availability off peak? instead of shedding the load, just price it effectively and the demand will even out and be a more efficient use of the fuel or generating station. the problem with our energy infra is a lack of consistent demand, and both AI and proof of work create the demand and a consumer of last resort that would make generation way more efficient.
afaik, the main compute load is done in training, not in the queries. this article sounds like astroturfing a pretext for regulation under the auspices of "climate."
also, the diminishing value of cash is accelerating so taking todays dollars and putting them into tomorrow's energy is probably the most fundamentally sound economic use of capital today.
power generators were loaded with debt and used as public sector slush funds (in canada where they were nominally publicly owned) and now the companies are not very productive because they have to pass on the debt service cost to consumers, and prevent anyone from entering the market to offer competitive service that would interfere with that debt service. if you build new energy infra, you need to protect it from managers piling it with debt to loot it, but if you solve that real problem, demand is not a "problem," it's the most valuable thing in the universe.
The west needs to get over nimbyism and build infrastructure again. It's frankly embarrassing how much the west has crippled itself and then exported manufacturing to counties with much less regulation.
It's an easy thought to have. I live in one of the US's larger metro areas in a leafy, former streetcar suburb then annexed, neighborhood. Near me, just down the street, is an old industrial plot that supplies materials and tools for other industrial uses. Their trucks are large. Their lots are small. Each day is a dance of large flatbeds loading up for the next day, moving in and out of the lots, and other customers and their large flatbeds coming to stock up. Many leave by driving down the street in front of my house.
Is it annoying? Yes. Their trucks are heavy enough to shake the house when they go over a bump. They are loud as hell too. [1]
Do I want to shut the company down? Of course not. They are my neighbors, for better or for worse. I have to try to make the relationship work. They employ dozens of people and make it so other companies can build things easier in my city.
The instinct, however, is to think "I wish they would f** off with their big dumb trucks and their blocking traffic and their dangerous blahblahblah. I'm fine with industrial supply companies, but not in my backyard!". It takes an effort to stop yourself and remember to recognize their value. I could lose my job tomorrow, and maybe walk down the street and ask them if they need another set of hands moving gas cylinders around. I might one day need their services, or need the services of someone who needs theirs.
1. I wish the federal government would regulate the amount of noise pollution coming off some of these vehicles, yes, but that isn't a local issue.
> American Electric Power, which owns the line, has proposed a new, higher electricity rate for data centers and cryptocurrency miners that would lock them in as customers for a decade. The companies are balking.
Look at that! Net Neutrality comes to the electrical wire. They could have charged different rates based on industrial/residential or volume but that wouldn't be optimal rent extraction.
This is actually a really great article about the weird contract dynamics of large power customers and the chicken-egg problem of needing commitment for a certain amount of guaranteed spend to justify the cost of servicing them. It has nothing at all to do about AI.
Comparing this to net neutrality just poisons the well when discussing NN. Internet service providers being able to arbitrarily adjust pricing based on data source stifles competition. Is there competition in the power supply industry where a client can pick their source? Well, aside from having their own generation. In this case transfer is the service and if one day huge demand cluster disappears the capacity for it is left to rust.
I don't think your point disagrees with mine. Charging based on demand is fine, requiring take-or-pay contracts when your request requires expensive grid upgrades is fine. Charging more because it's a datacenter as opposed to heavy industry, not fine. That's the part that mirrors NN.
But to directly answer your question, yes there is competition. In most states, Ohio being one of them, you can choose who provides your power generation. And since companies are shopping states for where to build data centers AEP has a lot of competition for delivery.
What do mean by "they"?
EDIT: who do you mean by "they"? (Rephrasing since some readers don't get that intent of the original question.) The handful of corporations interested in transport? Roads were a broad-based need. Roads have been built, used, maintained for thousands of years. The interstate highway system came from a government initiative, if there was a "they" it was broad-based enough to be "us".
Railroads served needs that had existed for a long time and it was very clear what their use was from the time they were conceived, and there were more than a handful of participants in the movement of goods and people, since producers wanted greater reach and consumers wanted better access. By contrast to the very small number of "they" asking for more elecricity for data centers. How many people involved in the discussion are asking for the AI companies to be getting this juice?
OP is saying the opposite: the TCR required huge investment, and was massively speculative, with a huge bubble ensuing. But rail travel did revolutionize the world, and few people sat around asking whether or not it was worth it.
TCR could have been justified by everyone having massive faith in the future, as OP is suggesting happened with roads. But you're quite wrong that "few people sat around asking whether or not it was worth it", as Iron Empires details:
I don't happen to know about roads, since that wasn't one single thing. But I doubt they happened because of blind faith in the future, either -- it was probably more businesses demanding roads NOW. So the argument that no one questioned them is dubious at best.
https://archive.ph/rS3ze
The best outcome for all of us is for tech companies to get into power. Tech got into telecom (dark fiber, undersea cabling) and provide free services (youtube, gmail, etc), which used to cost a lot historically. Everyone had to shell out a few hundred dollars/month just for phone calls (billed per minute) and txt messages. Now, we are at a point all communication is free. We can do video conferences with upto 100 people worldwide for free.
If tech companies get into power and break down the regulatory capture of utilities, they can make money off of energy storage and virtual power plants while providing free power for people.
I believe Microsoft is currently doing just that, reserving the output of Three Mile Island. The article was here on HN around a week ago.
I don't necessarily see anything wrong with that, and I can see the communication of demand changes back to generation being useful to those running the plant(s).
Microsoft commits to pay between $100/MWh and $140/MWh for 20 years:
https://news.ycombinator.com/item?id=41601443
This allows Constellation Energy to restart one 800 MW nuclear fission reactor at Three Mile Island.
Yes yes because the solution to the myopic God complex of the tech industry is more of it.
Wow. Really chugging the coolade.
Yeah, a bunch of enginerds, devoid of empathy, without skin in the game, running the world. What a dream.
Edit: OP's comment is almost nonsensical I feel it might be AI. "Traditionally youtube would cost hundreds of dollars"??
There’s a saying I’ve heard that this reminded me of, “if you owe the bank two dollars, that’s your problem, but if you owe the bank two billion dollars, that’s the bank’s problem.” I think it’s relevant because it shows how responsibility shifts as things scale. If you owe the bank a little money then you are just a regular customer and you deal with the bank’s policies. But if you are a big player then it’s up to the bank to negotiate with you and come to mutually agreeable terms.
These companies that have many big data centers are now big players. If they are stressing the grid they will need to be part of the solution in expanding the capacity and infrastructure, either by paying more to the electric companies or by including power infrastructure in their vertical integration. Microsoft has the right idea by investing in Three Mile Island, I think other big players will do similar things.
Unlike banks, grids have an obvious solution to this problem: stop supplying these players with energy when the grid is at significant risk of a black out.
I think many people read my statement and flipped who I thought the banks vs customers are. If you owe the bank $2 billion, that’s their problem- meaning they are exposed and could fail if they don’t negotiate to cover that exposure. If an AI company needs a bunch of power and can’t compute without it, then they are exposed and need to negotiate to make sure the power companies can supply it- they are no longer regular customers.
In my thought process, an analogous statement might be, “if you ask for 10 kilowatts from the power company, that’s the power company’s problem. If you ask for 10 megawatts, that’s your problem. If you (an AI company) ask for a historic amount of power and your business fails if you don’t get it, then it’s your responsibility to ensure the grid can supply that much power.
Banks have an obvious solution as do grids. Build their reserves and infrastructure and scale to their biggest customers. A stressed scale out system just requires more scaling. It feels weird to say any other solution, especially when the customer is a paying customer.
Scaling out power infrastructure is capital intensive and time consuming.
Why would you do that when there is a strong likelihood that most of these LLM startups will be out of business within the next year or two.
It only feels weird if you consider paying customers getting what they want has to be of the highest priority.
Others who are regular readers of IPCC publications might value the survival of big parts of earths habitable zones and the most densly populated costal areas higher. But priorities differ.
Then we should prioritize renewable non destructive production of energy over mediocre stasis?
That’s what bitcoin maxis always said when their rigs were overloading the grid. “Build us more capacity, and stop whining!”
But what if I want to ask chatgpt how to conserve power during a potential blackout?
I would say the same is true for crypto miners and their increasing need for increasing kilowatt power to solve their algo's.
Are you suggesting it should be illegal for these players to buy energy on the open market?
> Are you suggesting it should be illegal for these players to buy energy on the open market?
Part of the problem is the AI companies are unwilling to sign long-term power purchase agreements. That means the utility is on the hook for both the capital cost of the development and the risk of unloading a bunch of excess power if the tech company decides to relocate.
> Part of the problem is the AI companies are unwilling to sign long-term power purchase agreements.
That may also be circumstantial evidence that they don't quite believe all their own hype.
yes.
there is not and should not be an "open market" for power. the sale of electricity from the power grid is highly regulated, and for good reason. delivery to residential customers and essential services should always be prioritized over industrial bulk purchasers.
bulk purchasers already have the opportunity to use power sources that are not connected to the grid, if they want to use grid power they should be prioritized according to their benefit to society, not their cash on hand.
Charge them more until it's worth it.
And sure, tell them they get disconnected first when there's a shortage. But a hard block is worse than taking their money and using it for improvements.
How do you decide who "them" is, that should pay more?
Usually you do the opposite: In exchange for a lower rate you will be the first disconnected in an emergency.
Whoever you were going to refuse to sell power to for capacity reasons.
> they should be prioritized according to their benefit to society
The fact that they have the capability to pay for and consume this power is the strongest signal that they are indeed providing value to society. The money comes from somewhere. If that turns out not to be the case, they have the strongest incentive to stop.
But this sort of rationing at the hands of some regulatory body has historically proven to be a far more deadly cure than whatever the presumptive disease was.
That argument would require regular socialization and redistribution of all wealth. The market does not prioritize what the society needs, because individual needs are weighted by wealth and income.
In a Western society, everyone's needs are supposed to be equally important. We often don't even make majority decisions, because we assume that the constitutional rights of a minority are more important than what the majority finds reasonable.
> The market does not prioritize what the society needs
What do you think prices do? What do you think income is reflective of?
Companies that make lots of money provide things that lots of people are willing to pay for. This is the reflection of what people need. Exxon makes money because people want to stay warm. Cargill makes money because people want to eat. Apple makes money because people want to be entertained. Eli Lilly makes money because people don't want to die.
What do you know that millions of people all acting in their own self interest don't know?
Parent is saying that people with more money can affect the price signal more. That simply isn't as fair as weighting individuals equally. A lot of people don't like the economic impacts of this, so they tend to justify it rather than accept it as valid criticism.
A weighted average can be very different from the unweighted average.
In our current society, children can benefit from the wealth and social connections of their parents. That gives the needs of some people additional weight in the market without any actual merit. To get rid of that market distortion, children would have to be raised collectively without any contact to their parents.
There is a lot of wealth that has been created with business practices that later became illegal. Because we prefer not to punish people for actions that were legal at the time, we let people keep that wealth. But if we want the market to prioritize the needs of the current society, such wealth would have to be confiscated.
A society where the market actually reflects the needs of the society would be incredibly dystopian.
right, hospitals and farmers should just massively raise their prices so they can better compete with crypto miners, that will make the world better...
money is not a good indicator of value provided to society. there is a ton of ways where it falls apart, and there are a lot of people devoted to finding the ways they can collect the most money while providing the least benefit to society.
> money is not a good indicator of value provided to society
Ok, it's the least worst system we have...unless you have an alternative. I'm all ears.
Spotting and stopping the odd case where it’s gone haywire doesn’t mean ditching market pricing across the board. You can just fix (maybe even only temporarily!) the part that’s doing wacky, undesirable stuff.
Usually these things end up with “well obviously my personal priorities are objectively true…”
Yes but the aggregate of every individual's personal priorities are by definition society's priorities...
What do you get when 10% of Americans get to decide 67% of the priorities?
AI Overview:
The Environmental Protection Agency (EPA) has many accomplishments, including: Reducing air pollution The EPA has reduced air pollution by regulating auto emissions, banning pesticides, and cracking down on factory and power plant emissions. New cars are now 99% cleaner than 1970 models, and the EPA's efforts have led to a decrease in smog and asthma cases.
Cleaning up toxic waste The EPA has cleaned up toxic waste through the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund), which provides funding for cleaning up abandoned waste dumps. Protecting the ozone layer The EPA has protected the ozone layer by reauthorizing the Clean Air Act in 1990 to phase out chemicals that deplete it.
Increasing recycling The EPA has increased recycling. Revitalizing brownfields The EPA has revitalized brownfields, which has led to increased property values, reduced impervious surface expansion, and reduced residential VMT.
Reducing water use The EPA's WaterSense program has helped Americans save water, with a cumulative savings of 8.7 trillion gallons as of the end of 2023. Banning cancer-causing pesticides The EPA has banned or restricted many cancer-causing pesticides, including heptachlor, chlordane, EDB, daminozide, and chlorpyrifos.
Testing schools for asbestos The EPA required all primary and secondary schools to be tested for asbestos starting in 1982.
Rating energy efficiency of appliances The EPA introduced the Energy Star program in 1992 to rate the energy efficiency of household appliances. EPA History: Documents about Agency Accomplishments | US EPA Nov 17, 2023
Generative AI is experimental.
And how do you plan to measure their benefit to society without using money as a signal?
the grid gets to choose how it prioritizes power. if they want too much power at a time the grid doesn't have enough to go around, they're likely fairly early on the cutting block
No, but we should have a discussion about if it is worth it to expense so much energy for something with very little hard, real use case. Al be it bitcoin or LLM's.
there is a lot of money behind AI, but i have yet to see any of them actually get us a use case which work reliably.
Not to mention, AI is fun and all, but that energy could be far better spend making the economy less reliant on fossil fuel.
> there is a lot of money behind AI, but i have yet to see any of them actually get us a use case which work reliably.
Classic HN. You personally can't see the value of X therefore the entire market for X is wrong.
The suggestion is that they can buy it at certain times, but not when the grid is nearing capacity. And yes, that's a perfectly reasonable thing for a society to decide.
It's shared infrastructure, mainly paid for by public funds. If a government decides the priority should be the millions over the few, that's what happens in a functioning government.
Or they can pay for their own power stations and infrastructure to be built.
They do contract for capacity in advance, which enables suppliers to plan for demand.
Markets are neither open nor free, they are closed and regulated. So yes, block their purchasing, tell them to sort their own. Here's the thing, do you cut off one customer when supply is tight or do you risk political suicide by kicking the bucket to millions of small customers? Power utility companies will kick one customer, if they don't they will lose their social license to operate and get legislated out of business.
For emergencies, there are already methods to shut off power to low priority businesses. And say, keep hospitals open.
And, if you want to pay, you can pay a premium to have more 'secure' power. This is an option today, already. No need for any discussion about markets and 'government is holding back the free market'. There is already a market to pay for premium power. And the utilities can charge AI customers more if they want.
this is actually a major problem in the netherlands at the moment.
a part of the energy grid cannot handle the load being generated by all the solar being deployed, and upgrading the grid takes years. In the meantime, bussinesses and even households simply are not getting a new power connection unless they are deemed of enough importance.
If upgrading the grid takes years then invest until it doesn't take years.
There have been many years of build up to solar power. If the people running the grid haven't done their job then replace them with people who can.
Sorry hospitals, these AI jerks have more money! /s
AI jerks will just start putting big red crosses on their buildings, open one 10'x10' space in their facility with some barely passed the exams to get a license type of doctor and claim it to be a medical facility of some sort. Just like other hospitals, they'll have a shortage of beds.
I'm only half joking as from what I've seen of those involved, I would not put this type of consideration past them.
I'm sure they'd then be on here saying such a thing is legal and exactly what law intended. /s
I think you might misunderstand your analogy. If you owe the bank two billion dollars it's their problem because a missing 2 billion dollars is large enough to be painful for the bank.
And the bank stands to lose far more money than the company they have lent to who will just fold.
In renewable energy it is actually common for the funding institutions to be paid a cut of the profits and to have no recourse to repossess assets. They take all the risk because they provide all the funding. The job of the actual developer is to provide a project worth funding.
I searched this article for "environment" and found nothing. Environmental costs and the source of that electricity is huge.
Are these AI companies already profitable or is it speculation that's causing them to get a ton of funding? AI is such a polarizing subject and I find it difficult to sift through all the hype and hate surrounding it.
They generated a whooping three billion dollars last year.
OpenAI is expecting $3.7 billion in revenue this year, and is going to lose $5 billion, according to this article: https://www.nytimes.com/2024/09/27/technology/openai-chatgpt...
So they are currently printing 1 dollar bills at a cost of $2.35 each.
Losing money on every transaction, but making it up with scale!
Cosmo Kramer: It's a write-off for them.
Jerry: How is it a write-off?
Cosmo Kramer: They just write it off.
Jerry: Write it off what?
Cosmo Kramer: Jerry, all these big companies, they write off everything.
Jerry: You don't even know what a write-off is.
Cosmo Kramer: Do you?
Jerry: No, I don't.
Cosmo Kramer: But they do. And they're the ones writing it off.
That's not right. They're paying $2.35 to get a $1 per year revenue stream.
That's not right, either.
They're paying $2.35 in hopes that the $1/year customer sticks around for more than a few months.
[delayed]
Point to one single transformative invention that was accretive from day one. The ChatGPT moment isn't even two years old. I don't know for certain whether any of these investments are going to work out, but all of the current cash burn is forward looking. It may all come crashing down, but this is not the right analysis.
all inventions are accretive from day one, in the majority of historical bubbles the speculation was built on top of already profitable technologies but there was always one or two firms that were profitable to begin with. Modern bubbles (AI, Metaverse,Crypto) are speculative from the word go, there isn’t a single company that’s profitable in those verticals.
This certainly the model that basically all VC funded tech companies use. Though OpenAI is notable, because I don’t think we’ve seen another company burn this much money this fast.
Not a value statement on whether is this is right or wrong.
This predates modern VC by centuries. Early trade routes which connected humanity across continents were highly speculative, requiring huge amounts of capital, and were only profitable years later.
That’s wrong. A single load of pepper was enough to pay for the successful voyage and multiple lost ships.
Yes, that single load took years. It required huge amounts of speculative capital, years of fruitless exploration, and as you say, multiple failed expeditions before it succeeded.
That is my point.
But what was the cost of producing that revenue? At what point do they expect to break even on their investment?
I can very quickly generate a lot of revenue if my investors will let me buy eggs at $0.50 each and resell them for $0.05, but I don't think I'd get any bites unless I could explain how that enterprise will eventually turn a profit.
But this is what the food delivery companies were (are?) doing. This is what Uber is doing. This is pretty much what every VC funded company does. They burn through the investors' money (because who cares it's not their personal money) until they get a foothold.
That's what they were doing when money was free. Money is no longer free, unless you're an AI company.
> They burn through the investors' money (because who cares its not their personal money) until they get a foothold.
Otherwise known as investing. Sometimes it works. Sometimes it doesn't. And the last 20 years has been chockfull of excesses absolutely. But Uber is profitable these days, and has genuinely transformed how people get around. It looked like a negative unit margin dog until it didn't.
Otherwise known as https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29
it does seem very likely that $ per token of inference (at fixed quality) will continue to go down rapidly as hardware and software continues to improve.
It's better than that, OpenAI are stealing the eggs and lobbying to make egg theft legal, so long as you only steal eggs from small farmers and back yards. Because they can, by their own admission, never stay in business if they have to pay for the eggs.
In 2021, SoftBank is very interested in your egg selling company.
After all, you can't make an omelet without breaking the bank on some eggs.
If you can find a way to sell billions of dollars of eggs, even at a loss, people will invest. At scale you can increase the price of eggs, make the eggs cheaper, etc. Obviously the fact your eggs are artificially cheap is helping you sell them, but that won't be all there is to you as a seller.
People underestimate how hard it is to sell things: you could have the cure to cancer in your hands today and still need to lose mllions to get anywhere with it.
And it will go from 9% to 90% over the century. Big tech companies might as well avoid the middleman and evolve into the power generation business, although it's not hard with an open design of a solar farm in the desert.
Solar power is the least suited power source for dataceners other than wind.
You need nuclear reactors or other base line power generation energy sources.
For inference, I agree. For training - the much larger use of electricity - I think solar might be great.
Solar is better than nuclear for any application here. And remember, you can do your training in a location that has the world's best solar resource, not in (say) Finland.
Turning off the data center for 2/3rds of the year when the sun isn't shining sure is an idea.
Giant buildings in the desert with solar cells on top. No need for distribution lines. How many people are actually necessary to staff one once it is up and running? Bury the building with the desert soil for insulation.
I think you massively overestimate the generation capacity of a PV cell. If you cover all the surface area of a datacenter with PV cells, it will generate a small fraction of the power required.
I didn't illustrate the thought clearly. I didn't mean that the building's roof would be the only source of PV cells. The solar farm could grow all around the data center, but the roof would not need be a hole in the farm.
Your idea could perhaps work only in space, a bit closer to the sun, operating at peak power generation 24x7. On the ground it takes a lot more area in panels than is used by a datacenter.
Okay, so have AI build a nuclear plant in the desert so when they run it at 115% on the reactor, it's in the desert away from people. It's not like they'd be concerned about downwinders. Put the plant and the data center right next to each other again to avoid distribution lines. If they want power, make them figure it out. It should not EVER mean that normies have to sacrifice because AI wants
You are all over the place. In any case, nuclear fission energy doesn't work without a river providing steady cold water for cooling. There is no such water in the desert.
It's intentional. I'm just tossing out ridiculous ideas for a ridiculous use of electricity.
Unless we come up with newer more efficient algorithms and specialized hardware for implementing AI.
glances at Bitcoin mining ASICs
Any day, now.
Bitcoin is definitionally inefficient to mine. That’s the whole point.
The point is that difficulty is adjusted in accordance with network saturation to prevent a 51% attack. The network is not inherently inefficient unless you're attempting to monopolize it - you are still rewarded for using more efficient mining methods than your competitors.
Which leads us to the GPUs. For a while everyone said ASICs (and the courageous ones, FPGAs) were the future of mining because they were inherently more efficient than GPU hardware could ever be. But it turns out that it's the other way around - mass-manufactured GPUs have access to more efficient silicon than any FPGA on the market could hope for. Similarly, AI chips that want to beat Nvidia on efficiency terms first have to climb a mountain of power usage that is inherent to their exponentially less-dense hardware.
It is the first meaningful demand growth this century for the electricity industry
How is this bad? Are the utilities just lazy?
But that's what the article is about.
The utilities are being asked to make massive speculative investments in transmission infrastructure, but are dubious that the demand will actually be there when those projects finish in half a decade, and they'll be left holding the bag.
Also, infrastructure investment has a very long return on investment. (power plants for instance need to run decades to make back their profits, especially nuclear power plants.
Other forms of energy generation come and massive ecological costs. Are we really prepared to spend this much energy on a speculative technology? especially when it is destroying the planet while doing so?
we should already be spending a ton on renewables and transmission capacity.
this is a good way to ensure emissions become sustainable
This is why long term offtakes exist. The customer can prove their conviction and share in the risk. Extremely commonplace.
that doesn't help too much if the utilities expect the companies to be around in 10 years
> How is this bad?
The power is being used wastefully.
Who decides?
one would think the human race would prioritize solutions like clean, renewable energy, food production, not USING energy to solve "AI problems" like summarizing my email, and putting Sly and Arnold in YouTube video remixes
I believe that chips will get more efficient as they get tuned towards AI needs. Also, energy costs will continue to fall as they have for thousands of years. Think about this, at one time we would have to put a lot of wood or animal matter to get enough energy for a few hours of light at night. Now it takes very few resources to get enough light for a whole night. It's so relatively inexpensive that we can light an area all night without having to think twice about the cost.
Energy will get so inexpensive in a few years (10?) from now that power consumption by AI will not be a problem.
> Energy will get so inexpensive in a few years (10?) from now that power consumption by AI will not be a problem.
By what mechanism? Wishful thinking?
> Energy will get so inexpensive in a few years (10?)
Any evidence for that? I predict the exact opposite. The price of energy will rise.
Power so cheap that it did not have to be metered was the promise of Nuclear power but it got sidelined because of safety concerns. Given that climate change mandates a less polluting power source Nuclear power will get a new life which dictates that it become safe to operate. I predict that safety will increase over time. Even now there are experimental reactors that are fail-safe. It's only a matter of time before Nuclear reactors start to generate cheap safe energy. Here's a company that's working on it now: https://www.terrapower.com/about/
Also, solar power is making a large dent in our power needs.
https://climate.benjames.io/solar-off-grid/
It's a start but give it time.
Heard of the Jevons paradox?
I guess your point is that as energy gets cheaper demand will increase therefore negating the savings. Well, that has not been the case when it comes to power. Look at the cost over the last 200 years and you'll see that the cost has dropped over that time. Energy cost is a fraction of what it was then but demand has exploded. There's no reason to think that things will be different in the future.
https://archive.is/rS3ze
how is this stressing a grid that has to shed huge amounts of load to maintain availability off peak? instead of shedding the load, just price it effectively and the demand will even out and be a more efficient use of the fuel or generating station. the problem with our energy infra is a lack of consistent demand, and both AI and proof of work create the demand and a consumer of last resort that would make generation way more efficient.
afaik, the main compute load is done in training, not in the queries. this article sounds like astroturfing a pretext for regulation under the auspices of "climate."
also, the diminishing value of cash is accelerating so taking todays dollars and putting them into tomorrow's energy is probably the most fundamentally sound economic use of capital today.
power generators were loaded with debt and used as public sector slush funds (in canada where they were nominally publicly owned) and now the companies are not very productive because they have to pass on the debt service cost to consumers, and prevent anyone from entering the market to offer competitive service that would interfere with that debt service. if you build new energy infra, you need to protect it from managers piling it with debt to loot it, but if you solve that real problem, demand is not a "problem," it's the most valuable thing in the universe.
The west needs to get over nimbyism and build infrastructure again. It's frankly embarrassing how much the west has crippled itself and then exported manufacturing to counties with much less regulation.
It's an easy thought to have. I live in one of the US's larger metro areas in a leafy, former streetcar suburb then annexed, neighborhood. Near me, just down the street, is an old industrial plot that supplies materials and tools for other industrial uses. Their trucks are large. Their lots are small. Each day is a dance of large flatbeds loading up for the next day, moving in and out of the lots, and other customers and their large flatbeds coming to stock up. Many leave by driving down the street in front of my house.
Is it annoying? Yes. Their trucks are heavy enough to shake the house when they go over a bump. They are loud as hell too. [1]
Do I want to shut the company down? Of course not. They are my neighbors, for better or for worse. I have to try to make the relationship work. They employ dozens of people and make it so other companies can build things easier in my city.
The instinct, however, is to think "I wish they would f** off with their big dumb trucks and their blocking traffic and their dangerous blahblahblah. I'm fine with industrial supply companies, but not in my backyard!". It takes an effort to stop yourself and remember to recognize their value. I could lose my job tomorrow, and maybe walk down the street and ask them if they need another set of hands moving gas cylinders around. I might one day need their services, or need the services of someone who needs theirs.
1. I wish the federal government would regulate the amount of noise pollution coming off some of these vehicles, yes, but that isn't a local issue.
When Bitcoin was doing this, people were raising an alarm
But AI fans will shrug and say “this has always been happening, AI is nothing new”. The usual refrain.
Also, AI is way more useful than blockchain etc etc.
https://archive.ph/rS3ze
> American Electric Power, which owns the line, has proposed a new, higher electricity rate for data centers and cryptocurrency miners that would lock them in as customers for a decade. The companies are balking.
Look at that! Net Neutrality comes to the electrical wire. They could have charged different rates based on industrial/residential or volume but that wouldn't be optimal rent extraction.
This is actually a really great article about the weird contract dynamics of large power customers and the chicken-egg problem of needing commitment for a certain amount of guaranteed spend to justify the cost of servicing them. It has nothing at all to do about AI.
Comparing this to net neutrality just poisons the well when discussing NN. Internet service providers being able to arbitrarily adjust pricing based on data source stifles competition. Is there competition in the power supply industry where a client can pick their source? Well, aside from having their own generation. In this case transfer is the service and if one day huge demand cluster disappears the capacity for it is left to rust.
I don't think your point disagrees with mine. Charging based on demand is fine, requiring take-or-pay contracts when your request requires expensive grid upgrades is fine. Charging more because it's a datacenter as opposed to heavy industry, not fine. That's the part that mirrors NN.
But to directly answer your question, yes there is competition. In most states, Ohio being one of them, you can choose who provides your power generation. And since companies are shopping states for where to build data centers AEP has a lot of competition for delivery.
100 years ago was there this much bad-faith handwringing about all the new roads they needed?
What do mean by "they"? EDIT: who do you mean by "they"? (Rephrasing since some readers don't get that intent of the original question.) The handful of corporations interested in transport? Roads were a broad-based need. Roads have been built, used, maintained for thousands of years. The interstate highway system came from a government initiative, if there was a "they" it was broad-based enough to be "us". Railroads served needs that had existed for a long time and it was very clear what their use was from the time they were conceived, and there were more than a handful of participants in the movement of goods and people, since producers wanted greater reach and consumers wanted better access. By contrast to the very small number of "they" asking for more elecricity for data centers. How many people involved in the discussion are asking for the AI companies to be getting this juice?
Can you believe these “mammals”, burning energy around the clock to keep their blood warm all the time?
You could go on newspapers.com (free for 7 days) and look at those old papers. I know that the Transcontinental Railroad was intensely controversial.
What's "bad-faith" about it?
OP is saying the opposite: the TCR required huge investment, and was massively speculative, with a huge bubble ensuing. But rail travel did revolutionize the world, and few people sat around asking whether or not it was worth it.
TCR could have been justified by everyone having massive faith in the future, as OP is suggesting happened with roads. But you're quite wrong that "few people sat around asking whether or not it was worth it", as Iron Empires details:
https://www.amazon.com/Iron-Empires-Robber-Railroads-America...
it was hugely controversial in Congress.
I don't happen to know about roads, since that wasn't one single thing. But I doubt they happened because of blind faith in the future, either -- it was probably more businesses demanding roads NOW. So the argument that no one questioned them is dubious at best.