It's no secret that generative AI requires exorbitant amounts of electricity and cooling water to function. Over the past few years, multiple reports have emerged, giving a glimpse of what it takes to keep these multi-billion-dollar data centers operational.
According to OpenAI CEO Sam Altman, ChatGPT uses 0.34 watt-hours for every query response, "about what an oven would use in a little over one second, or a high-efficiency lightbulb would use in a couple of minutes."
On the other hand, GPT-5's predecessors, including OpenAI's GPT-3 model consumes four times more water than previously thought, while GPT-4 consumes up to 3 water bottles to generate a mere 100 words.
However, on a grander scale, Microsoft and Google's electricity consumption reportedly surpasses the power usage of over 100 countries. While speaking at the World Economic Forum in Davos, Switzerland, Microsoft CEO Satya Nadella indicated that the cost of energy will be a key indicator of deciding which country will emerge as the winner in the competitive AI race.
We will quickly lose even the social permission to take something like energy, which is a scarce resource, and use it to generate these tokens, if these tokens are not improving health outcomes, education outcomes, public sector efficiency, private sector competitiveness, across all sectors, small and large, right? And that, to me, is ultimately the goal.
Microsoft CEO, Satya Nadella
The executive further indicated that "GDP growth in any place will be directly correlated" to the of energy in using AI. He further referred to "tokens" as the new global commodity, the units bought by users to process tasks when interacting with AI chatbots and models.
“The job of every economy and every firm in the economy is to translate these tokens into economic growth, then if you have a cheaper commodity, it’s better,” added Nadella.
As you may know, there's a global shortage of DRAM, which has consequently contributed to its prices shooting through the roof. Top AI research labs have invested billions of dollars to build data centers across the world, leading to a surge in demand for these components. As a general rule of thumb, when supply doesn't meet demand, the only way to find a middle ground is to increase the price. And that's exactly what's happening.
Related: Microsoft CEO Satya Nadella says AI needs to prove its worth in the real world
Microsoft's CEO says AI labs must build "a ubiquitous grid of energy and tokens." He further indicated that it's important for organizations to integrate AI into their workflows, referring to the tech as a "cognitive amplifier" with "access to infinite minds."
Does AI still seem like a profitable venture for Microsoft with all the issues abound? Share your thoughts in the comments and cast your vote in the poll!
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