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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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Nvidia briefly surpasses $2 trillion in market cap during intraday trading

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Nvidia briefly surpasses  trillion in market cap during intraday trading

Nvidia CEO Jensen Huang speaks onstage during The New York Times Dealbook Summit 2023 at Jazz at Lincoln Center in New York City on Nov. 29, 2023.

Slaven Vlasic | Getty Images

Nvidia briefly surpassed $2 trillion in market cap during intraday trading Friday following the company’s rosy earnings report Wednesday — but it was short-lived.

After rising earlier in the day, shares of Nvidia were down about 1% at 11 a.m. ET. Nvidia stock closed up 16% Thursday.

Nvidia posted $22.10 billion in revenue for its fiscal fourth quarter, a 265% increase from a year ago and above the $20.62 billion expected by analysts polled by LSEG, formerly known as Refinitiv. Nvidia reported $12.29 billion in net income during the quarter, up a staggering 769% from $1.41 billion last year.

The company has benefited from the tech sector’s insatiable demand for artificial intelligence capabilities over the past year. Nvidia makes the pricey graphics processors for the servers that power large AI models.

Nvidia is clearly in a bullish trading cycle, says OptionPlay's Jessica Inskip

Nvidia said it expects $24.0 billion in sales in the current quarter, surpassing the $22.17 billion expected by analysts.

“Fundamentally, the conditions are excellent for continued growth,” Nvidia CEO Jensen Huang said during the company’s quarterly call with investors Wednesday.

— CNBC’s Kif Leswing contributed to this report.

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AI can ‘disproportionately’ help defend against cybersecurity threats, Google CEO Sundar Pichai says

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AI can 'disproportionately' help defend against cybersecurity threats, Google CEO Sundar Pichai says

Google CEO Sundar Pichai speaks in conversation with Emily Chang during the APEC CEO Summit at Moscone West on November 16, 2023 in San Francisco, California. The APEC summit is being held in San Francisco and runs through November 17.

Justin Sullivan | Getty Images News | Getty Images

Munich, GERMANY — Rapid developments in artificial intelligence could help strengthen defenses against security threats in cyber space, according to Google CEO Sundar Pichai.

Amid growing concerns about the potentially nefarious uses of AI, Pichai said that the intelligence tools could help governments and companies speed up the detection of — and response to — threats from hostile actors.

“We are right to be worried about the impact on cybersecurity. But AI, I think actually, counterintuitively, strengthens our defense on cybersecurity,” Pichai told delegates at Munich Security Conference at the end of last week.

Cybersecurity attacks have been growing in volume and sophistication as malicious actors increasingly use them as a way to exert power and extort money.

Cyberattacks cost the global economy an estimated $8 trillion in 2023 — a sum that is set to rise to $10.5 trillion by 2025, according to cyber research firm Cybersecurity Ventures.

A January report from Britain’s National Cyber Security Centre — part of GCHQ, the country’s intelligence agency — said that AI would only increase those threats, lowering the barriers to entry for cyber hackers and enabling more malicious cyber activity, including ransomware attacks.

“AI disproportionately helps the people defending because you’re getting a tool which can impact it at scale.

Sundar Pichai

CEO at Google

However, Pichai said that AI was also lowering the time needed for defenders to detect attacks and react against them. He said this would reduce what’s known as a the defenders’ dilemma, whereby cyberhackers have to be successful just once to a system whereas a defender has to be successful every time in order to protect it.

“AI disproportionately helps the people defending because you’re getting a tool which can impact it at scale versus the people who are trying to exploit,” he said.

“So, in some ways, we are winning the race,” he added.

Google last week announced a new initiative offering AI tools and infrastructure investments designed to boost online security. A free, open-source tool dubbed Magika aims to help users detect malware — malicious software — the company said in a statement, while a white paper proposes measures and research and creates guardrails around AI.

Pichai said the tools were already being put to use in the company’s products, such as Google Chrome and Gmail, as well as its internal systems.

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“AI is at a definitive crossroads — one where policymakers, security professionals and civil society have the chance to finally tilt the cybersecurity balance from attackers to cyber defenders. 

The release coincided with the signing of a pact by major companies at MSC to take “reasonable precautions” to prevent AI tools from being used to disrupt democratic votes in 2024’s bumper election year and beyond.

Adobe, Amazon, Google, IBM, Meta, Microsoft, OpenAI, TikTok and X, formerly Twitter, were among the signatories to the new agreement, which includes a framework for how companies must respond to AI-generated “deepfakes” designed to deceive voters.

It comes as the internet becomes an increasingly important sphere of influence for both individuals and state-backed malicious actors.

Former U.S. Secretary of State Hillary Clinton on Saturday described cyberspace as “a new battlefield.”

“The technology arms race has just gone up another notch with generative AI,” she said in Munich.

“If you can run a little bit faster than your adversary, you’re going to do better. That’s what AI is really giving us defensively.

Mark Hughes

president of security at DXC

A report published last week by Microsoft found that state-backed hackers from Russia, China, and Iran have been using its OpenAI large language model (LLM) to enhance their efforts to trick targets.

Russian military intelligence, Iran’s Revolutionary Guard, and the Chinese and North Korean governments were all said to have relied on the tools.

Mark Hughes, president of security at IT services and consulting firm DXC, told CNBC that bad actors were increasingly relying on a ChatGPT-inspired hacking tool called WormGPT to conduct tasks like reverse engineering code.

However, he said that he was also seeing “significant gains” from similar tools which help engineers to detect and reserve engineer attacks at speed.

“It gives us the ability to speed up,” Hughes said last week. “Most of the time in cyber, what you have is the time that the attackers have in advantage against you. That’s often the case in any conflict situation.

“If you can run a little bit faster than your adversary, you’re going to do better. That’s what AI is really giving us defensively at the moment,” he added.

Germany has been benefitting from a 'peace dividend' for years, defense minister says

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Ride-hailing giant Grab posts first profitable quarter, announces $500 million share buyback

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Ride-hailing giant Grab posts first profitable quarter, announces 0 million share buyback

A attendee walks past a banner with a Grab logo before a bell-ringing ceremony as Grab begins trading on the Nasdaq, in Singapore, on Thursday, Dec. 2, 2021.

Ore Huiying | Bloomberg | Getty Images

SINGAPORE — Grab posted its first-ever profitable quarter, raking in $11 million in profit, the Southeast Asian ride-hailing giant said in its fourth-quarter earnings report Thursday.

This compares with a $391 million loss recorded in the same period a year ago. The boost was “primarily due to the improvement in Group adjusted EBITDA, fair value changes in investments, and lowered share-based compensation expenses,” the company said.

Revenue for the quarter hit $653 million, exceeding LSEG analysts’ estimates of $634.86 million.

Losses for full year 2023 came to $485 million, down 72% from $1.74 billion a year ago.

In addition to ride-hailing, the company also provides financial services like payments and insurance, as well as deliveries for food, groceries and packages.

“We exited [2023 with] mobility exceeding pre-Covid levels. We are seeing a very strong demand in the mobility space,” Grab CFO Peter Oey told CNBC in an exclusive interview on Friday, adding that tourism is “growing very much.”

“If you look at the deliveries business, we have another record 13% year-over-year growth. We have now more users on our platform also at the same time. So we have really strong momentum,” he said on CNBC’s “Squawk Box Asia.”

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Grab announced Thursday it would be repurchasing up to $500 million worth of class A ordinary shares for the first time.

Grab was largely unprofitable during its years of operation, having amassed billions of dollars in losses since its inception in 2012.

In the initial years of business, tech startups tend to prioritize growth over profitability, which usually means burning a lot of cash. But with global macro uncertainties slowing growth, they have been forced to renew their focus on profitability and be more prudent with costs.

During the fourth quarter, total incentives — which include partner and consumer incentives — were further reduced to 7.3% of total value of goods sold, Grab said in its report. That’s compared to 8.2% in the same period a year ago “as we continued to improve the health of our marketplace.”

Grab had been doling out incentives to attract drivers and passengers to its platform but that’s tapering now as the company moves to drive up profitability.

On whether Grab would reach a time where it wouldn’t need to incentivize people to stay on the platform, Oey said incentives will “always be a lever” for the business.

“I don’t think we’re going to see a world where there’s no incentive whatsoever,” he told CNBC, adding that incentives help “to make sure we have enough supply” of drivers and attract price-sensitive customers.

For 2024, Grab expects revenue to come in between $2.70 billion and $2.75 billion, lower than LSEG analysts’ consensus of $2.8 billion.

Grab’s shares closed 8.41% lower on Thursday. Its share price has plummeted 75.8% from its $13.06 opening price in December 2021, when the firm first listed on the Nasdaq.

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