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Hello again, dear readers!

As we struggle to decarbonize our economy, we’re facing an urgent challenge: the skyrocketing energy needs of data centers. Experts are sounding the alarm that as the demand for these energy-hungry complexes surges, they could seriously impact our efforts to combat climate change. And AI is rapidly evolving into the hungriest beast of all. Read on to discover more about this generational challenge and the innovative solutions being proposed. 

On AI - or GenAI, more specifically - it’s important to listen to the experts rather than the alarmists to understand the future. Scroll down to read my summary of nine expert opinions on GenAI’s impact on the future workplace. 

This issue features the usual bunch of AI Insights and recommendations for the week's podcasts, books, shows, charts, and tweets, followed by a final chuckle. 

Let’s get going.

Industry Highlights: Hungry For Power

Around 2,700 data centers consumed over 4% of electricity in 2022 across the U.S., and that figure is projected to leap to 6% by 2026. The AI sector alone is expected to increase its energy demand tenfold over just three years. Companies like Nvidia are experiencing explosive growth, further straining our already challenged energy systems. If we don’t find a way to balance our digital needs with sustainable energy solutions, we’ll pay the price regarding climate change. 

Consumption Now

As of the last major reporting period (2022), data centers globally accounted for approximately 1-1.3% of total electricity demand. This share is projected to rise to between 1.5% and 3% by 2026, although the IEA’s mid-year update for 2024 points out that data center data collection (ironically) isn’t great.  

Does 1.5% to 3% sound like nothing to worry about? Well, it depends on whether you live anywhere near a global data hub.

Data centers cluster in specific hubs due to favorable infrastructure, local government incentives, and the need for substantial power—often at least 100 MW per center. The largest markets include:

In 2023, Northern Virginia emerged as the largest data center market, boasting a power consumption capacity of 2,552 MW, which is four times higher than the next closest markets in Dallas (654 MW) and Silicon Valley (615 MW).

Globally, data centers are clustered where you might expect—Europe, China, southeast Asia, and Australia. Some countries appear to have an outsize data footprint: Ireland saw data centers consume 18% of its electricity demand in 2022, while in Singapore, they represented around 7%. This concentration of energy use highlights the growing concern over the sustainability and efficiency of powering these facilities.

Projected Consumption by 2030

Projections for how much electricity data centers will need by 2030 are all over the place, especially in the U.S. Estimates say they could account for anywhere from 4% to 10% of the country’s electricity use. This wide range comes down to different projection models from McKinsey, Goldman Sachs and others, trends in various regions, and how quickly new facilities are popping up. The real unknown is caused by the ever-more-paid growth and power of AI.

Now, imagine a scenario where these projections lean toward the higher end. If data centers consume 10% of the nation’s electricity, we could face a perfect storm of energy shortages. Cities might experience rolling blackouts as power grids become overwhelmed, forcing businesses and households to cut back on their electricity use. The strain on fossil fuel sources would intensify, leading to higher greenhouse gas emissions as we try to reduce them.

If countries like China decide to ignore global climate agreements and ramp up coal use to fuel their data centers, they could gain a significant edge in the tech and AI races. This scenario could put nations prioritizing renewable energy at a disadvantage. In short, our push for technology could be a tradeoff between climate goals and global stability.

Securing Supply and Reducing Consumption

Data center providers are getting creative with their power sources to keep up with the skyrocketing electricity demand. Sure, renewables like wind and solar are getting a lot of attention, but there’s also a growing interest in nuclear and geothermal energy because they’re stable and low-emission options.

Some recent Power Purchase Agreements (PPAs) including Microsoft’s $10 billion deal to develop 10.5 GW of solar and wind energy in the U.S. and Europe, and AWS diving into a 105 MW PPA for wind energy in Ireland and ramping up investments in more renewable projects. AWS is also expanding a facility near the Talen Energy nuclear power station, aiming for a 960 MW capacity. And Microsoft? They’re putting $1 billion into geothermal energy projects, including a big initiative in Kenya.

Securing supply is only half the challenge—the other is reducing consumption. The World Economic Forum recently published an article on power-positive data centers, which will only be possible if chip manufacturers, data center operators, and heating, ventilation, and air conditioning (HVAC) experts come together to drive new tech to reduce energy use.

This is where things get interesting. Some ideas for reducing the hunger-levels of data centers include:

1. Biological Data Centers: Imagine using living organisms, like bacteria or algae, to process data. Researchers are exploring bio-computing, where biological systems could perform calculations and store data using far less energy than traditional servers. Check out the work being done by the Swiss biocomputing company, FinalSpark.

2. Ocean Thermal Energy Conversion (OTEC): This technique harnesses the temperature difference between warm surface water and cold deep seawater to generate energy. This oceanic energy source could cool and power data centers simultaneously.

3. Data Center in Space: Why not build data centers in space in the future? With near-constant solar energy and the potential for zero gravity cooling, space-based data centers could operate with minimal environmental impact, although the logistics would be a challenge. Till SpaceX figures it out. 

4. Quantum Computing: While still in its infancy, quantum computers could potentially solve complex problems much faster and with lower energy consumption than traditional computers. This could revolutionize data processing and reduce the need for large data centers.

5. AI-Powered Energy Management: Using AI to optimize energy consumption in real-time could lead to dramatic savings. Imagine AI algorithms that dynamically adjust workloads based on the most efficient energy use, even predicting when to shut down certain systems.

6. Kinetic Energy Harvesting: What if we could power data centers using the kinetic energy produced by people walking around them? Smart flooring could convert footsteps into electricity, contributing to the power needs of the facility.

7. Thermal Energy Storage: Instead of running cooling systems continuously, data centers could use ice or chilled water storage to manage heat. They could create ice overnight when electricity is cheaper and use it to cool systems during peak hours.

8. Vertical Farming Data Centers: Combining data centers with vertical farms could create a symbiotic relationship. The excess server heat could be used to grow plants, while crops like algae would help absorb carbon emissions.

9. Crowdsourced Computing: Instead of relying on massive data centers, why not use the idle processing power of personal devices? A decentralized network could distribute computing tasks to users’ devices, reducing the need for large central facilities.

Some of these ideas may sound far-fetched, but they reflect the creativity needed to tackle the growing energy demands of AI and data centers. In the near term, negotiating power-purchasing agreements could become a priority for CPOs everywhere. 

The Future of Work: What to Expect From GenAI by 2030

Research into AI's impacts ranges from exciting to reassuring to alarming. Will we see mass layoffs or a wave of new jobs? 

McKinsey tells us AI-related advancements may affect 15% of the global workforce (that’s 400 million workers worldwide). The World Economic Forum believes AI will create around 97 million new jobs. More specifically, GenAI LLMs such as ChatGPT are seen as beneficial by 97% of business owners. But how, exactly, will GenAI change our working lives?  

Clearly, we’re in the early stages of a monumental shift in the world of working, but the rapid pace of change makes it difficult to peer into the future. HBR invited experts from various fields to discover where AI might take us by 2030. Here’s a rundown of their predictions.

A Gradual, But Profound Change

Ethan Mollick, a professor at the Wharton School, believes we’re on the brink of something big with AI, but it won’t happen overnight. He points out that while tech is moving fast, society tends to take its time adapting. According to him, we might find ourselves in a middle ground by 2030—seeing significant advancements in AI, but not the immediate, sweeping changes some are expecting.

AI as Smart as Humans? Not So Fast

Gary Marcus, a machine-learning expert, is skeptical about achieving artificial general intelligence (AGI) anytime soon. He thinks we’re still facing major hiccups with current AI systems. Without some major breakthroughs, he doubts AI will be far beyond where it is today by 2030.

Transformation, Not Job Loss

Erik Brynjolfsson from Stanford sees a different picture. He believes that AI will transform the way we work instead of wiping out jobs. Sure, some jobs will change or disappear, but new roles will pop up too. The key, he says, is that successful companies will focus on improving specific tasks, leading to better productivity overall.

AI Everywhere, Like the Internet

This insight resonates most with my expectations of AI. Alex Singla from McKinsey compares the future of AI to the early days of the internet. He thinks that by 2030, AI will be woven into the fabric of businesses just like the internet is today. Companies that fully embrace AI will thrive, while those who treat it as an optional add-on might get left behind.

AI Personal Assistants to Handle Our Lives

Amy Webb, CEO of the Future Today Institute, envisions a future where we all have Personal Large Action Models (PLAMs)—basically super-smart AI assistants. These will learn our habits and handle everything from booking flights to managing our schedules, making our lives much easier.

AI Agents as Collaborators at Work

Erick Brethenoux from Gartner sees AI agents evolving into real teammates. Instead of just automating tasks, these agents will learn what’s important to us and help filter out the noise in our work lives. Think of them as your assistants who get you and your priorities.

‘Empathy’ Bots for Sale to Kids

Jodi Halpern, a bioethics professor, raises a red flag about AI emotional companions for kids. While these bots might offer some comfort, she warns that relying on them could hinder kids from forming real human connections and developing empathy—skills crucial for adult relationships.

Autonomous Robots Gain Independence

Prof. Giuseppe Loianno from NYU predicts that by 2030, robots will be much more autonomous. They’ll be able to work together and tackle complex tasks without much human input. This could revolutionize industries like healthcare and logistics, but it’ll also mean we need new jobs focused on overseeing and maintaining these robots.

The AI-Powered Doctor’s Office

Metin N. Gurcan, a director at Wake Forest University, believes AI will transform healthcare by 2030. With tools that can quickly analyze medical data, AI will assist doctors in diagnosing and treating patients, allowing them to focus more on actual care rather than paperwork. This shift could lead to healthier outcomes for everyone.

Societal Trust is at Risk

Valerie Wirtschafter from the Brookings Institution warns that as AI-generated content becomes more realistic, it could blur the lines between truth and fiction. She’s concerned this might undermine trust in information and institutions, making it vital for us to stay informed and educated about AI's implications.

So, there you have it! The future of AI is a story of gradual change and steady integration. Whether it transforms our lives for the better or presents new challenges, one thing is clear: we should listen to the experts rather than the alarmists. 

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AI Insights

To continue with our theme, HBR has published an excellent article on embracing GenAI at work. The authors (both from Accenture) argue that our “professional success depends on our ability to elicit the best possible output from large language models (LLMs) like ChatGPT.” In other words, ignoring GenAI today will put your future career prospects at risk. 

While many experts on GenAI exhort us to simply “experiment with the technology” or give vague advice about learning the basics of prompt engineering, these authors dive deeper to describe three kinds of “fusion skills” you will need to get the best results. They are:

1. Intelligent interrogation: instructing large language models to perform in ways that generate better outcomes—by, say, breaking processes down into steps or visualizing multiple potential paths to a solution. 

2. Judgment integration: incorporating expert and ethical human discernment to make AI’s output more trustworthy, reliable, and accurate. It entails augmenting a model’s training sources with authoritative knowledge bases when necessary, keeping biases out of prompts, ensuring the privacy of any data used by the models, and scrutinizing suspect output. 

3. Reciprocal apprenticing: where you tailor gen AI to your company’s specific business context by including rich organizational data and know-how into your commands. You learn how to train the AI to tackle more sophisticated challenges as you improve.

The Supply Aside

📕 Read - The Devil at His Elbow: Alex Murdaugh and the Fall of a Southern Dynasty

This retelling of the Murdaugh murders is a page-turner that dives deep into the story of why a successful lawyer who apparently had it all would murder his wife and son. Valerie Bauerlein, an award-winning journalist, goes beyond the headlines, unraveling the dark legacy of Alex Murdaugh. With cinematic flair, she paints a vivid picture of power, privilege, and betrayal, pulling readers right into the marshy South Carolina landscape where it all unfolded. A real page-turner for a sordid true crime - worth a read!

What Else I’m Reading

• Aggressive stimulus package drives Chinese stockmarket rally: Beijing’s massive stimulus package, which includes a policy-rate cut, mortgage-rate cuts and US$114bn, has caused major indices to soar more than 25% and the Shanghai stock exchange to suffer glitches under the volume of activity. Critics note the stimulus package does little to solve China’s real-estate sector woes.

• Cost of Boeing strike could hit $1 billion per month: Boeing’s 33,000 machinists have entered their fourth week of striking, with analysts predicting that Boeing may react with layoffs and cutting back suppliers. S&P on Tuesday warned a possible downgrade of Boeing’s debt into junk territory. 

• How Apple Rules The World: A deep-dive into Apple’s history, its tight control of the market, outsized cultural influence, and the impacts of the DOJ case. This sentence caught my attention: “Even if the case is dismissed, the lawsuit might signal Apple’s leadership is fading. Anticompetitive behavior, after all, is sometimes a symptom of a company that’s run out of ideas.”

📺 Watch - Wise Guy: David Chase and The Sopranos

“I had no idea what I was doing, but I knew it was going to be about money … and death.” 

Wise Guy: David Chase and The Sopranos, is the story of how Chase found a home at HBO for his unconventional pilot “that no-one else wanted” about a mobster seeking therapy. Lots of great insights from the cast and crew about the writing, Gandofini’s early death, and the series’ ending.

👂 Listen - How I Built This: Paperless Post

James and Alexa Hirschfeld’s Paperless Post is an online invitation company that has sent over 650 million invitations. This is the story of how they convinced investors that people would pay for “virtual paper”, and how they settled on the right business model. Paperless Post survived Covid, but I wonder if it will survive the threat of AI image generators.

💡 Think - AI and the CPO

AI in procurement took center stage at our Chicago Procurement Council last week. We witnessed a consulting firm's in-house GenAI development, sparking lively discussions about practical use cases—still a key challenge in the field.

CPOs are eager to engage with AI but aren't blind to the hurdles. Data issues, murky ROI, and adoption challenges remain significant roadblocks. The consensus? Leaders should prioritize high-value use cases, build robust data infrastructures, and recognize the crucial role of people in digital transformation. It's not just about the tech but how we harness it.

As we navigate this AI revolution in procurement, how are you preparing your team for this data-driven future?

📕 Be sure to check out my book: Fire the Boss, Keep the Love: 10 Jobs, 10 Exits, 10 Lessons.

Whether you're starting your career or a seasoned pro, this book offers fresh perspectives and actionable advice to help you level up. I delve into my own personal career story and career wisdom from top executives to explore topics including:

• Career transition strategies

• Building lasting professional relationships

• Tips for thriving in diverse corporate cultures

Fire the Boss, Keep the Love is a must-read for anyone ready to take charge of their career journey and forge an authentic path to success. Get your copy on Amazon!

💡 Course: Craft Your Career!

As the world of work continues to evolve rapidly, with a more globalized labor market and many companies reducing headcount, the risk of getting left behind is higher than ever.

Throw in the rapid adoption of AI in the workplace and the rise of remote work, and even the most competent and hardworking leaders and professionals are struggling to keep up.

In Craft Your Career, Aaron Cleavinger and I teach you the skills you need to stay ahead of the curve and craft the career you deserve. Check it out here and enroll:  http://craftyourcareer.com/

Charts of the Week

Quote of the Week

Tweet of the Week

The Final Chuckle

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you want to see me address, email me at [email protected]!

Want more?

If you’d like to read more of my writing on the supply chain, entrepreneurship, or the future of work, check out my website.

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Happy reading this weekend!

-- Naseem