Powering the AI

Long, Hard Road
Squaring the Circle
Dot Plot Thoughts
Look Who’s Coming to SIC!
DC, Cape Town and Europe?

If, like me, you’re old enough to remember the 1990s internet bubble, today’s AI excitement might be giving you flashbacks. The parallels are unmistakable.

Back then, a new technology was grabbing public interest and investment dollars because it promised to dramatically improve our lives. Most people didn’t really understand how it worked but could see the benefits… and sometimes hear them (AOL: “You’ve Got Mail!”).

The era ended badly for many investors, not because they were wrong but because they were early. Excitement outpaced reality. The technology was quite real and would, eventually, achieve what it promised and more.

(I have told this story in front of George Gilder and he didn’t object, so I will tell it here. I was invited to speak at a conference sponsored by Peters and Company at Chateau Lake Louise near Calgary. This was late January and it was -40F when I stepped out of the airport and ice was literally forming inside the windows of the limo driving into the mountains, where it was oddly 20° warmer. George was also speaking and though we knew of each other, we had never met. I had a private dinner with him one night where he was moaning about the technology stocks he had thought were winners which had dropped significantly.

The price action clearly frustrated George because these were all great companies. And he was right; every company we talked about ended up being incredibly valuable and successful. But at the time, they were overpriced so we went into a discussion over valuation and pricing. I am sure I could have that same discussion today with many technology enthusiasts. There are many technology companies that are enthusiastically priced (to coin a term) but that doesn't mean they aren't great companies. Pricing? Another story for another day…

Artificial intelligence has even greater promise. I believe it’s quite real, yet experience and research tells me achieving it on a world-changing scale will be tough. Energy is a top obstacle. AI systems consume truly gargantuan amounts of electricity. Where it will come from is not yet clear.