There’s something about artificial intelligence that they’re not telling you.
We’ve been promised better health care, shorter work weeks, safer travel, even smarter children, but there’s one detail that’s been swept under the rug that could make these images of the future nothing more than a fantasy.
Artificial intelligence on this scale will require massive computing power.
And that much computing power will demand far more energy than we produce.
It’s that simple.
To anybody familiar with cryptocurrencies, which consume an estimated 127 terawatt-hours (TWh) per year, this should come as no surprise — but the figures associated with AI just may.
First, the macro view: Between now and 2030, the AI market as a whole is expected to grow by five-fold, from $250 billion per year today to $1.8 trillion by 2030.
Now, the micro view: According to a study conducted at Carnegie Mellon, the power required to generate just nine AI images is enough to completely charge a smartphone. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
Artificial Intelligence Eats up as Much Power as Brazil
When taking into account that publicly available AI engines are now able to generate short movies from text prompts, global daily image generation could easily run in the trillions.
And that’s just one application.
To see the total expansion in power demand for AI, look no further than the expansion of the data center industry, as that’s where all of the heavy lifting for artificial intelligence takes place.
Over the next six years, power demand for data centers is expected to grow by a factor of between 5 and 20x.
And because the modern power grid and power generation network can barely handle current demand, it’s already accepted that all of this additional power generation will have to come from internal sources.
And that usually means one thing: solar.
Solar is the standard when it comes to corporate, commercial and industrial power generation.
Why Solar and Artificial Intelligence Are Inseparable
It’s silent, it doesn’t block the sun, there are no moving parts to lubricate or replace, and if the location is right, you can count on a quarter century or so of reliable power generation.
Solar is already how companies like Apple and Google have been able to operate their facilities on a near or complete carbon neutral basis.
And as increasingly powerful AI pushes popularity to the masses, it will play an increasingly vital role in tomorrow’s economy.
Unfortunately, that raises another problem… Where there is renewable power generation, be it solar, wind, tidal, geothermal or any other, there needs to be power storage capacity.
This need comes in the form of massive battery banks, with individual units the size of small buildings.
It’s where unused power goes for storage during off-peak hours.
When the demand comes back, and exceeds production capacity, these batteries are tapped for the extra juice.
Without battery arrays like the one pictured below, power-generation from the environment would simply not be viable. That’s why power storage is a vital part of the equation.
Vanadium Batteries Will Be at the Heart of the Artificial Intelligence Revolution
At the moment, this segment of the rechargeable battery market is still dominated by lithium. But right now, a revolutionary alternative is gaining traction: vanadium batteries.
This class of batteries is more expensive to produce and has an inferior energy density, making them bigger and bulkier on a kWh basis than lithium. But there is one advantage which makes all this immaterial: service life.
Vanadium batteries will operate for at least 25,000 cycles before any performance decay can be observed.
That’s 5 times longer than anything else on the market and allows for a service life of 25–30 years… Exactly the lifespan of a typical solar installation.
That makes these batteries far more economical in the long run.
For the last few weeks, I’ve been tracking a company that specializes in precisely this power storage technology.
It’s a small, young company, but it’s an industry leader in vanadium power storage, and it recently received a substantial financial commitment from the U.S. Department of Energy.
Considering the future of power demand from the AI sector, this vanadium pure-play — valued at less than $60 million as of this morning — couldn’t be better positioned.
I recently profiled this company for my premium readers.
Want to see what they saw? Check out this presentation, ASAP.
Fortune favors the bold, Alex Koyfman His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.
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