Artificial intelligence (AI) is growing by leaps and bounds. The strength of its contribution to productivity and taking care of our ageing population is becoming all too clear. This tech progress demands massive energy resources, fueling demands for renewed infrastructure investments around Europe. Francesco Ceccato, the CEO of Barclays Europe, emphasizes that no single entity can shoulder the financial burden of developing AI infrastructure alone.
AI will clearly have an enormous role in raising productivity and driving positive economic results. This is particularly important for eldering populations that could experience diminished workforce productivity. Artificial intelligence is a key technology to help these industries address these challenges and continue fueling our economic success. Second, the energy demands tied to AI development are increasingly alarming.
The Colossus AI Supercomputer and Its Energy Demands
The controversy around Elon Musk’s plan to build an AI colossus supercomputer is illustrative of the energy-intensive nature of AI technologies. Yet this very supercomputer will be consuming a staggering amount of energy. More AI applications are coming online every day, and with it, a rapid expansion of energy needs. The International Energy Agency (IEA) has forecast that by 2030, global data centres will consume approximately 1,000 terawatt hours (TWh) of electricity. This enormous energy requirement is needed because we’re training today’s most fundamental AI models.
“Just to give you one metric, the IEA is projecting that 1,000 terawatt hours (TWh) are going to be needed for all the data centres in the world, and of course it’s data centres that can perform these AI calculations. And therefore, our view is that we need to understand that energy infrastructure, which is critical to supporting AI,” – Francesco Ceccato
The increasing demand on data centres for the heavy lifting AI requires only highlights the need to long-term address energy infrastructure across the board. Europe should invest in the cleanest energy production, while creating the digital infrastructure necessary to realize the new AI potential.
The Role of Investment and Collaboration
Ceccato admits that European governments are not completely off the hook either. Fiscal constraints make it difficult for them to fund such large infrastructure projects on their own. He emphasizes the need for coordinated action that includes both private capital markets and public investments through government programs.
“There is clearly no company or government that can finance all the AI infrastructure or energy needs. We need to see a large investment in energy to support the AI infrastructure. Why is that? Because every application of AI requires lots of computing power,” – Francesco Ceccato
Recognising these critical needs, Barclays Europe has responded with a powerful new initiative. In order to reach 1 trillion euros of sustainable and transition finance by 2030. Ceccato applauded their resolve to achieve this goal and showed that these kinds of investments can help lay the groundwork to support the infrastructure we all need.
“The second piece is to know that from our perspective, our target of 1 trillion of sustainable and transition finance by 2030 is still something that we as Barclays Europe want to continue to contribute very meaningfully to and that’s what we have been doing,” – Francesco Ceccato
Reforming Capital Markets for AI Development
CECCATO highlighted the fragmentation of capital markets across Europe. He emphasized that real reforms are urgently needed to ensure this money is spent on the right things to make AI work. While he agrees that capital can be raised from such markets, Garcetti stresses that streamlined processes and collaboration are key to making investment happen efficiently and effectively.
“It can come from the capital markets, but our capital markets in Europe are fragmented and therefore we need to reform them and we need to do that quickly,” – Francesco Ceccato
The pressing need for energy and infrastructure investment is indicative of a larger trend that’s been occurring in the world economy. As countries like the United States announce substantial funding for AI initiatives, such as the recent billions pledged by former President Donald Trump, Europe must act swiftly to ensure it remains competitive in the evolving technological landscape.
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