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Generative AI, which is incredibly power-demanding, is a relatively new thing in the market and Utilities have not accounted for it! MS estimates that AI could use 2027 as much energy as Spain needed to power itself two years ago.

For now, AI is hosted on servers in data centers that are in a way giant warehouses containing an average of 100’000 computing machines. Since they are mounted in a virtual mode, they can align with an astonishing digital capability. To generate and create human-like speech, text, images, and video, systems have to access and deal with enormous amounts of data and content which is power-intensive work for CPUs, GPUs, memory, and other infrastructure-related parts. Industry experts suggest that the growth ratio is typically beyond 10 % annually, which generates an incremental jump in power demand as machines are better and stronger, hence the energy input requirement increases exponentially. 

More importantly, the above-average demand growth from data centers is such that it outweighs capacity addition on the utility side. Given this, the growing demand by data centers to power generative AI apps and programs could create investment opportunities in the companies that build computing power infrastructure.

This may include, but is not limited to:

1. Integrated power-management systems providers,
2. Makers of risk identification and mitigation processes, 
   
3. Air-conditioning and remote monitoring systems,
4. Suppliers of cooling systems, racks, cables, processing units, and IT management systems, and 
5. Makers of flash storage systems, which handle 90% of current cloud storage needs.
   

Investment Opportunities

To ensure efficiency, security, and reliability datacenter locations have to met prerequisites that can depend on the organization's constraints and business requirements, but in general they are:

• Connectivity: High-speed and reliable internet connectivity is essential for data centers. The location should have access to multiple internet service providers (ISPs) and fiber-optic networks to ensure redundancy and minimize latency.
• Accessibility: The location is key and it should be easily accessible. Proximity to highways, airports, and public transportation is crucial for logistics and emergency response.
• Power Supply: Access to a reliable and ample power supply is critical for a data center. Considerations include proximity to power grids, availability of redundant power sources, and the capacity for future expansion.
• Stability: The location should be in a region with a very low earthquake menace, it should be in a region with a high stable political system. Further consideration this section includes low risks for floods, hurricanes, and potential landslides.
• Cooling and Climate: Data centers generate significant heat, so the location should have adequate cooling infrastructure to maintain optimal operating temperatures. Factors such as climate, availability of cooling water, and the cost of energy for cooling systems is considered.
  

Other elements considered may include (not an exhaustive list)

• Regulatory Compliance,
  
• Space and Scalability, 
  
• Cost Considerations,
• Local Support Services.
  

Interlinking the whole

As one shown in the above table, access to sufficient power is positioned #3; In other words, power companies will need to develop significant new generation and transmission capacity to meet this surging demand. Given this deduction, several segments of the power sector are likely to benefit from generative artificial intelligence growth. 

• Regulated utilities are the only companies that can provide power infrastructure at the massive scale needed to meet data center growth projections. Solely in DM, large-scale utilities could generate meaningful earnings from increased generative AI demand, although meeting the load requirements may require capital investments of $10 billion to $15 billion. 
• Hydrogen fuel cell manufacturers that can provide base-load power to data centers will be in demand. While the technology is relatively new, hydrogen fuel cells are easy to deploy and can operate at a high capacity, offsetting the intermittency of most renewable power sources. If data centers are going to meet their power needs with renewable energy, hydrogen fuel cells are key.  
• Datacenter infrastructures do meet the same location prerequisites as nuclear power plants; hence they are oftentimes close by. Therefore, nuclear power plant operators have a competitive advantage and offer a unique opportunity to provide data centers with a consistent, uninterrupted power supply within a limited distance. 
• Mini-nuclear power plant: Alternatively, the data center could deploy its mini-nuclear power plant. An on-spot nuclear power generation would eliminate transmission and distribution charges — which can represent as much as half of a typical electric bill. 
• PPA: Providers of power purchase agreements work directly with large customers, usually from wind and solar generation, and enter into long-term agreements to provide electricity. 
• Interconnections, such as medium and high-voltage cables, are essential for balancing power demand and supply across regions, so the manufacturers of these products could also see a boost. 

The massive amount of power that is required argues that demand is an underappreciated driver for the manufacturers of large-scale, distributed clean energy technology and developers of wind, solar, energy storage, and hydrogen fuel cells.

A word about sustainability 
Generative AI is power intensive, and one can argue about the trade-off between potential benefits and its contribution to global carbon emissions. 

The long-term utilization optimization of the power grid is a known prerequisite for the industry and the benefit of alternative and clean energy sources is expected to be balanced out by more precise content output for a wide range of private and commercial users such as weather forecasting and other economic sensitive output. 

AI is securing an advantage over external factors due to climate change. With the development of new systems and technologies such as improved carbon capture and storage facilities are possible, which is downright a benefit.