The task of building Artificial General Intelligence is said to be on a scale similar to the Manhattan Project.\u00a0 Sam Altman, head of OpenAI, made reference to the Manhattan Project when his company was developing the now famous ChatGPT product (did he notice the irony in that analogy?).\u00a0 AI will dramatically change how we live and work.<\/p>\n
In her book, Empire of AI, Karen Hao details her view that one consequence of AI is that the gap between the powerful and everyone else will widen.\u00a0 The power\/influence of the largest technology companies (i.e. the hyper-scalers) will continue to grow.\u00a0 Meta, Amazon, Alphabet, and Microsoft will spend approximately $320 billion this year on AI.\u00a0 These hyper-scalers are spending more money on AI data centers than all the others combined.\u00a0 And they are hiring the best talent from the smaller upstart companies.\u00a0 Good luck to those trying to compete with them!\u00a0\u00a0<\/p>\n
Their investments are working.\u00a0 The market capitalization of these four companies ranges from $1.8 trillion to more than $3 trillion!\u00a0 As a comparison, the market-cap of Walmart is $760 billion.<\/p>\n
The gap between today\u2019s powerful leaders that run the AI companies and to the rest of us is also widening.\u00a0 Those running the hyper-scalers see their wealth growing at the same time that many others struggle to pay their rising utility bills thanks in part to AI\u2019s need for energy and water.\u00a0 This year, electricity bills for some 67 million customers are projected to surge by over 20 percent in 13 states from Illinois to New Jersey, the region with the most AI data centers.\u00a0 Closer to home, NV Energy is expanding their infrastructure to provide power for two Alphabet data centers.\u00a0 Will Nevada residents be competing with Alphabet for electricity?\u00a0<\/p>\n
And what about jobs?\u00a0 Many workers, especially entry level white color workers, are at risk of being replaced by cost-saving AI tools.\u00a0 Look no further than to Microsoft, which has laid off 15,000 employees this year without seeing a drop in their strong financial performance.\u00a0 While they say efficiency gains from AI were not a predominant factor in the layoffs, they acknowledge that over the long term AI will reshape jobs at Microsoft and everywhere else.\u00a0 AI will boost productivity and profits, but are most people better or worse off?\u00a0 I wonder.<\/p>\n
When it comes to AI there is another kind of power:\u00a0 the power needed to run AI.\u00a0 That will be the subject of my next article, including investment ideas. \u00a0\u00a0<\/p>\n