AI's energy arms race: Who controls the grid, controls the future

Is Australia at a crossroads in the global AI power race? Amidst daily announcements of AI startups, it is easy to overlook AI’s current and future impact on communications, commerce and media. Today’s race is literally about power – the power required to run the world’s access to data that will inevitably be run by AI.

According to Scope3 research, AI and cloud computing energy consumption, measured by CO2 emissions, already rivals the emissions of the entire global aviation industry. Conservatively, AI growth will demand 6% to 10% of the world’s energy production by 2035. The big tech players – Microsoft, Amazon, Google and Meta – are already investing hundreds of billions of dollars in shoring up their future energy requirements across both renewable and nuclear power initiatives.

Despite our power-led competitive disadvantages, there are opportunities for an Australian-based AI industry to compete. Tasmanian-based Firmus has introduced immersion cooling for its AI data centres and is among the most energy efficient in the world – a $2.1 billion ‘AI factory zone’ was announced in Launceston, backed by Tasmania’s renewable energy, representing the largest AI infrastructure investment in Australia to date.

Australia’s AI industry is well placed to develop a competitive advantage in creating AI infrastructure that requires less power, is tailored specifically to renewable energy, and can assist fossil-fuel-reliant countries to more affordably transition to renewables.