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There's a water crisis looming. Big Tech and AI could make it worse

Dubai, UNITED ARAB EMIRATES — A global rush for the next wave of generative artificial intelligence is increasing public scrutiny on an often-overlooked but critically important environmental issue: Big Tech’s expanding water footprint.

Tech giants, including the likes of Microsoft and Alphabet-owned Google, have recently reported a substantial upswing in their water consumption and researchers say one of the main culprits is the race to capitalize on the next wave of AI.

Shaolei Ren, a researcher at the University of California, Riverside, published a study in April investigating the resources needed to run buzzy generative AI models, such as OpenAI’s ChatGPT.

Ren and his colleagues found that ChatGPT gulps 500 milliliters of water (roughly the amount of water in a standard 16-ounce bottle) for every 10 to 50 prompts, depending on when and where the AI model is deployed.

Hundreds of millions of monthly users all submitting questions on the popular chatbot quickly illustrates just how “thirsty” AI models can be.

The study’s authors warned that if the growing water footprint of AI models is not sufficiently addressed, the issue could become a major roadblock to the socially responsible and sustainable use of AI in the future.

People take part in a protest called by Uruguay’s Central Union (PIT-CNT) in “defense of water” against the handling of the national authorities with respect to the management of the shortage of drinking water reserves in Montevideo on May 31, 2023.

Eitan Abramovich | Afp | Getty Images

ChatGPT creator OpenAI, part owned by Microsoft, did not respond to a request to comment on the study’s findings.

“In general, the public is getting more knowledgeable and aware of the water issue and if they learn that the Big Tech’s are taking away their water resources and they are not getting enough water, nobody will like it,” Ren told CNBC via videoconference.

“I think we are going to see more clashes over the water usage in the coming years as well, so this type of risk will have to be taken care of by the companies,” he added.

‘A hidden cost’

Data centers are part of the lifeblood of Big Tech — and a lot of water is required to keep the power-hungry servers cool and running smoothly.

For Meta, its these warehouse-scale data centers that generate not only the highest percentage of its water use but also the lion’s share of its energy use and greenhouse gas emissions.

In July, protesters took to the streets of Uruguay’s capital to push back against Google’s plan to build a data center. The proposal sought to use vast quantities of water at a time when the South American country was suffering its worst drought in 74 years.

Google reportedly said at the time the project was still at an exploratory phase and stressed that sustainability remained at the heart of its mission.

With AI, we’re seeing the classic problem with technology in that you have efficiency gains but then you have rebound effects with more energy and more resources being used.

Somya Joshi

Head of division: global agendas, climate and systems at SEI

In Microsoft’s latest environmental sustainability report, the U.S. tech company disclosed that its global water consumption rose by more than a third from 2021 to 2022, climbing to nearly 1.7 billion gallons.

It means that Microsoft’s annual water use would be enough to fill more than 2,500 Olympic-sized swimming pools.

For Google, meanwhile, total water consumption at its data centers and offices came in at 5.6 billion gallons in 2022, a 21% increase on the year before.

Both companies are working to reduce their water footprint and become “water positive” by the end of the decade, meaning that they aim to replenish more water than they use.

Google plans to operate its data centers on carbon-free energy by 2030

It’s notable, however, that their latest water consumption figures were disclosed before the launch of their own respective ChatGPT competitors. The computing power needed to run Microsoft’s Bing Chat and Google Bard could mean significantly higher levels of water use over the coming months.

“With AI, we’re seeing the classic problem with technology in that you have efficiency gains but then you have rebound effects with more energy and more resources being used,” said Somya Joshi, head of division: global agendas, climate and systems at the Stockholm Environment Institute.

“And when it comes to water, we’re seeing an exponential rise in water use just for supplying cooling to some of the machines that are needed, like heavy computation servers, and large-language models using larger and larger amounts of data,” Joshi told CNBC during the COP28 climate summit in the United Arab Emirates.

“So, on one hand, companies are promising to their customers more efficient models … but this comes with a hidden cost when it comes to energy, carbon and water,” she added.

How are tech firms reducing their water footprint?

A spokesperson for Microsoft told CNBC that the company is investing in research to measure the energy and water use and carbon impact of AI, while working on ways to make large systems more efficient.

“AI will be a powerful tool for advancing sustainability solutions, but we need a plentiful clean energy supply globally to power this new technology, which has increased consumption demands,” a spokesperson for Microsoft told CNBC via email.

“We will continue to monitor our emissions, accelerate progress while increasing our use of clean energy to power datacenters, purchasing renewable energy, and other efforts to meet our sustainability goals of being carbon negative, water positive and zero waste by 2030,” they added.

Aerial view of the proposed site of the Meta Platforms Inc. data center outside Talavera de la Reina, Spain, on Monday, July 17, 2023. Meta is planning to build a 1 billion ($1.1 billion) data center which it expects to use about 665 million liters (176 million gallons) of water a year, and up to 195 liters per second during “peak water flow,” according to a technical report.

Paul Hanna | Bloomberg | Getty Images

Separately, a Google spokesperson told CNBC that research shows that while AI computing demand has dramatically increased, the energy needed to power this technology is rising “at a much slower rate than many forecasts have predicted.”

“We are using tested practices to reduce the carbon footprint of workloads by large margins; together these principles can reduce the energy of training a model by up to 100x and emissions by up to 1000x,” the spokesperson said.

“Google data centers are designed, built and operated to maximize efficiency – compared with five years ago, Google now delivers around 5X as much computing power with the same amount of electrical power,” they continued.

“To support the next generation of fundamental advances in AI, our latest TPU v4 [supercomputer] is proven to be one of the fastest, most efficient, and most sustainable ML [machine leanring] infrastructure hubs in the world.”

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Elon Musk endorses far-right Alternative for Germany party in upcoming election

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Elon Musk endorses far-right Alternative for Germany party in upcoming election

Tesla CEO and X owner Elon Musk gestures behind protective glass during a rally for Republican presidential nominee and former U.S. president Donald Trump, at the site of the July assassination attempt against Trump, in Butler, Pennsylvania, U.S., October 5, 2024.

Carlos Barria | Reuters

Tesla CEO Elon Musk, a meagdonor and adviser to President-elect Donald Trump, is now seeking to influence Germany’s election, posting an endorsement on X of the country’s far-right Alternative for Germany (AfD) party.

In a post Thursday night, Musk wrote, “Only the AfD can save Germany.”

Musk, who has over 200 million listed followers on the site that he owns, made the comment while sharing a post from far-right influencer, Naomi Seibt, who claimed that Germany’s “presumptive next chancellor Friedrich Merz (CDU) is horrified by the idea that Germany should follow Elon Musk’s and Javier Milei’s example,” referring to the president of Argentina.

Seibt has a history of promoting white nationalist ideology, The Guardian previously reported, and has denied the validity of scientific consensus around climate change, namely that it’s driven by fossil fuel emissions.

In a post on X, Sen. Chris Murphy (D-Conn.) called Musk an “out of touch billionaire running the incoming Trump Administration” who “enthusiastically supports the neo-Nazi party in Germany.”

“The AfD’s mission is to rehabilitate the image of the Nazi movement,” Murphy wrote. He added that one of the party’s leaders has a license plate that’s “an open tribute to Hitler,” and another “described Judaism as the ‘inner enemy’ in Germany.”

Musk and Tesla’s investor relations team didn’t immediately respond to requests for comment.

On Friday, German Chancellor Olaf Scholz, a center-left Social Democrat, dismissed Musk’s claim that only the far-right party can “save Germany.”

Under Scholz’s leadership, Germany‘s left-wing coalition collapsed in November, and AfD is currently polling in second place ahead of February elections. Throughout Germany, where the AfD has placed highly in state elections, the other parties have generally refused to form coalitions with it. 

According to Pew Research, “AfD has campaigned against weapon deliveries to Ukraine and called for an end to sanctions on Russia,” a view shared by Musk.

Far right parties have also gained ground in the Netherlands, Austria, Finland and elsewhere. Many cheered Trump’s election, which Musk helped finance through $277 million in contributions to the campaign and related Republican causes.

Tesla’s stock is up about 75% since Trump’s victory, surpassing its prior all-time high from 2021 last week.

AfD has reportedly criticized Tesla and its factory outside of Berlin. The party claimed many of Tesla’s thousands of workers there commute in from Poland or Berlin, limiting the economic benefits to the local community in Brandeburg.

The AfD generally views electric vehicles as part of an ideological climate movement, and not good for Germany’s auto industry.

Europe has been a tough market for Tesla this year. According to data from the European Automobile Manufacturers Association, sales of Tesla cars declined 40.9% in November, exceeding the overall 9.5% dip in sales of battery electric vehicles.

Elsewhere in Euopre, Musk endorsed right-wing Italian Prime Minister Giorgia Meloni and has voiced support for Nigel Farage in the U.K, a populist politician and head of Reform UK. In South America, Musk endorsed and has a friendship with Argentina’s President Milei, a self-described anarcho-capitalist.

WATCH: Musk’s early influence on government

Surprised how much influence Elon Musk and Trump already have on government: Tenacity's Ben Narasin

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Bitcoin falls 8% in volatile trade around $93,000 as sell-off intensifies

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Bitcoin falls 8% in volatile trade around ,000 as sell-off intensifies

Omer Taha Cetin | Anadolu | Getty Images

Bitcoin fell sharply on Friday amid broader investor caution toward risk assets.

Bitcoin dipped below the $93,000 mark earlier in the day before trading above that price in volatile trade.

By around 8:26 ET, bitcoin was trading at $93,809.39, according to Coin Metrics, down around 8% from 24 hours before when it was priced above $102,000.

The cryptocurrency hit an all-time high above $108,000 just this week, but has since sold off aggressively.

The Federal Reserve rattled markets in recent days, as it signaled fewer interest rate cuts next year. Equity markets took a hit, filtering through to crypto assets.

The price of bitcoin price has more than doubled this year, supported by a number of factors including the launch of spot exchange-traded funds and the U.S. presidential election of Donald Trump. He has pledged pro-crypto policies and his victory at the polls helped propel bitcoin to its latest record high.

With some markets on edge due to the Fed, some of the steam has come out of assets that have seen big gains this year.

Tesla, which has been another big beneficiary of Trump’s win, continued its post-election slide with shares falling on Friday in premarket trade. Other big names like Nvidia were also lower during the session.

Bitcoin’s fall also dragged down other cryptocurrencies. Ether was down around 12%, and XRP plunged 10% from 24 hours prior, at around 8:27 a.m. ET.

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Tesla shares drop 5%, continuing to slide as post-election rally loses steam

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Tesla shares drop 5%, continuing to slide as post-election rally loses steam

Tesla electric vehicles are parked in a parking lot at the Tesla Gigafactory Berlin-Brandenburg plant. 

Patrick Pleul | Picture Alliance | Getty Images

Shares of Tesla continued to slide on Friday, in what appeared to be a case of investors taking profits from the electric car maker’s blistering post-U.S. election rally.

As of around 6:30 a.m. ET, the firm’s shares were down nearly 5% in U.S. premarket trading, extending losses from earlier in the week. On Wednesday, Tesla shares slumped 8% to post their worst day since before Donald Trump’s presidential election victory in November.

Trump’s win prompted a sharp rally in Tesla shares, as investors increased their bets that the electric vehicle firm would benefit thanks to its CEO Elon Musk’s close ties to the president-elect. The stock is still up around 65% since Nov. 5’s market close — the night of the U.S. presidential vote.

Musk was appointed by Trump to co-lead the newly created Department of Government Efficiency, also referred to as “DOGE.” The proposed presidential advisory commission’s acronym shares the same name as the internet meme that inspired so-called “memecoin” cryptocurrency, dogecoin.

Dogecoin briefly shot up in price after the body’s creation.

Musk was a major backer of Trump during the Republican’s election run, pouring in $277 million primarily into his campaign effort, according to Federal Election Commission filings. Musk is the world’s richest person, with a net worth of $439.4 billion, according to Forbes data.

Last month, Bloomberg News reported Trump’s transition team was planning to pursue a federal framework for regulating self-driving vehicles.

Tesla and Trump’s transition team did not immediately respond to a CNBC request for comment on the report.

If true, the move would offer a major boost to Musk’s EV firm. Tesla is staking its future on the idea of rolling out mass fleets of autonomous vehicles, known as “robotaxi” services. At the firm’s “We Robot” event in October, Musk unveiled the firm’s Cybercab self-driving concept car.

Tesla has yet to deliver on Musk’s promise of offering truly autonomous vehicles. Tesla’s Autopilot and paid “Full Self-Driving” services still require a human behind the wheel to supervise the system’s actions and take over if needed.

In other Tesla-related news, data released by the European Automobile Manufacturers Association on Thursday showed sales of Tesla cars declined 40.9% in November, exceeding the overall 9.5% dip in sales of battery electric cars (BEVs) in the bloc.

Separately, Tesla also on Friday said it was recalling nearly 700,000 vehicles in the U.S. due to an issue with its tire pressure monitoring system. Software-related recalls aren’t typically a huge issue for Tesla, however, as it can issue “over-the-air” updates to fix these issues.

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