We haven’t grown much here, or most developed countries – the exception of the US – that we have seen for a while, that is something that we have seen very little about, and that most of us see profits quickly. It tended to arrive in a way that was not possible.
Data centers, and in general, AI may not be very meaningful in ways of growth. Goldman Sachs released a fascinating paper a few months ago. City AM Summary: “Goldman Sachs has been released paper He says that AI productivity benefits and returns are likely to be significantly more limited than expected, but its electricity demand is extremely large, with utility companies almost 40% in the next three years to meet demand You have to spend %. ”
Essentially, we can invest very large amounts of money and invest very important resources in things that we don’t actually have much for the broader economy. This is a long-standing issue in economics, known as the Sorrow Paradox, following Robert Thoreau back in 1987.
It’s stuck
But the big picture aside, the details of the data center look bad. These things are severely limiting local economic benefits.
Teesside’s planned data center is run by Blackstone and announced in a fantastic fanfare by British Prime Minister Rachel Reeves last fall, costing $10 billion. That $10 billion investment is expected to create 4,000 jobs locally. This means that all jobs created cost around $2.5 million.
This is not a public fund, but of course, the world’s largest data center itself uses a huge amount of public resources. .
This means that the pressure on both grid connections, both systems increases. Everything is all about investments that produce a small number of jobs compared to the amount entered.
This should not surprise us. Data centers are large and highly capital, not labor-intensive investments. In other words, to work, they rely much more on a bank of servers full of overheating silicon chips than the people there they are there to operate.
force
And (until recently) profits that were astronomical for the major exclusive operators (until recently) flow not only from the local area, but usually abroad.
The digital services tax introduced by the final government is primarily trying to try and return some of the money that has flooded the nation to major US engineers, and some of those profits have returned to public wallets. I’m watching it come.
But please keep an eye on what happens in future negotiations regarding a trade deal with the Trump administration. My guess is that Trump will demand its removal in return for the US-UK trade agreement.
This means you should not invest in any kind of data center or computing power.
Immy
The National Engineering Policy Center has some great suggestions on how to make your data center more environmentally sustainable, from top to bottom. e-waste (the UK produces more per capita than any other country except Norway!) water, reuse of waste heat from data centres, and more.
But we really need a more sophisticated conversation about the purpose of these things. That the arrival of Deepsec is being forced on us all. If it is possible to build a sophisticated, large-scale language model without large infrastructure and resources, then there are many possibilities here, using what big technology claims to us. .
We can think about the democratization and spread of technology using smaller, simpler models for the types of tasks we know that AI is good at.
Instead, what we are getting is the exact opposite, as there was some noise from the government, the industry and the so-called Immy movement.
This author
Dr. James Meadway is an economist and former political advisor. This article is based on a transcript of an episode of Meadway’s Podcast. Macrodose.
