The Valmy AI, data centers, and power economics, with Azeem Azhar
Episode: AI, data centers, and power economics, with Azeem Azhar
Release date: 2025-02-27
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Patrick McKenzie (patio11) is joined by Azeem Azhar, writer of the Exponential View newsletter, to discuss the massive data center buildout powering AI and its implications for our energy infrastructure. The conversation covers the physical limitations of modern datacenters, the challenges of electricity generation, the societal ripples from historical largescale infrastructure investments like railways and telecommunications, and the future of energy including solar, nuclear and geothermal power. Through their discussion, Patrick and Azeem explain why our mental models for both computing and energy systems need to be updated.
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Full transcript available here: www.complexsystemspodcast.com/ai-llm-data-center-power-economics/
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Recommended in this episode:
- Azeem’s newsletter: https://www.exponentialview.co/
- Azeem Azhar’s guest essay: The 19th-Century Technology That Threatens A.I. https://www.nytimes.com/2024/12/28/opinion/ai-electricity-power-plants.html
- Electric Twin: https://www.electrictwin.com/
- Video of Elon Musk’s Colossus https://www.youtube.com/watch?v=Tw696JVSxJQ
- Complex Systems with Travis Dauwalter on the electrical grid: https://open.spotify.com/episode/5JY8e84sEXmHFlc8IR2kRb?si=35ymIC0UQ5SKdV8rrBcgIw
- Complex Systems with Austin Vernon on fracking: https://open.spotify.com/episode/0YDV1XyjUCM2RtuTcBGYH9?si=YshjUXPEQBiScNxrNaI-Gw
- Complex Systems with Casey Handmer on direct capture of CO2 to turn into hydrocarbon: https://open.spotify.com/episode/0GHegWgLSubYxvATmbWhQu?si=xNYBjn0ZTX2IT_pAZ5Ozsg
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Twitter:
@azeem
@patio11
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Timestamps:
(00:00) Intro
(00:27) The power economics of data centers
(01:12) Historical infrastructure rollouts
(04:58) The telecoms bubble
(06:22) Unprecedented enterprise spend on AI capabilities
(11:12) Let's have your LLM talk to my LLM
(16:44) Is there a saturation point?
(19:25) Sponsors: Safebase | Check
(21:55) What’s in a data center?
(24:52) The challenges of data centers
(29:40) Geographical considerations for data centers
(36:53) Energy consumption and future needs
(40:48) Challenges in building transmission lines
(41:35) The solar power learning curve
(43:51) Small modular nuclear reactors
(51:26) Geothermal energy and fracking
(01:01:34) The future of AI and energy systems
(01:12:57) Wrap