ESG Investors Getting Spooked by Power Hunger of B
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Posted On: 10/02/2024 5:30:36 PM
ESG Investors Getting Spooked by Power Hunger of Big Tech’s AI Programs
The power demands of advanced computing and artificial intelligence (AI) companies have begun raising concerns among some investors regarding whether this field should be represented as greatly as it is in sustainable funds. Already, asset managers in charge of environmental, social and governance (ESG) funds worth hundreds of billions have been calling out big tech firms such as Alphabet and Microsoft on the impact their operations have on the environment.
Six fund executives in the United States and Europe have revealed that they are closely examining the environmental impact of AI on the environment. This comes after major tech companies spearheading the artificial intelligence race begun reporting increases in their greenhouse-gas emissions. For example, Alphabet announced a 13% increase in total emissions, explaining that the increase was attributed to materials and power needs for data centers. Microsoft also announced a 30.9% rise in supply-chain emissions last year.
The thirst for power by major players in this field appears relentless, however, as cloud computing and artificial intelligence continue to drive significant growth. This has seen some funds turn to tech stocks, because companies in this market produce less greenhouse gases than others in sectors such as energy and manufacturing, while making outsized market gains.
A review of top holdings of huge funds show that most are greatly invested in tech giants, including Amazon, Apple, Nvidia, Meta, Microsoft and Alphabet.
Data from Goldman Sachs estimates that AI will significantly increase power demand from data centers by 160% in the next five or so years. Senior ESG research analyst at Morgan Stanley, Jason Qi, has also highlighted the need for more relevant data on energy use of these companies. Qi notes that companies are sharing surface-level data instead of specific data on power consumption related to AI, the volume of power supply deals, duration of use and geographic distribution. Investors and analysts believe that if concerns on increasing emissions aren’t addressed, investments could be affected.
It appears companies in the field are working on these issues, however, with Meta announcing that it had been offsetting emissions from its operations. Apple and Amazon also revealed in their recent environmental reports that their emissions were dropping.
Some expect these players to shift to nuclear energy, with the rise in investments into nuclear signaling this change. Just last week, Microsoft announced that it had entered a deal to revive a nuclear plant in Pennsylvania. This comes after Amazon revealed earlier this year that it had begun purchasing nuclear power to supplement renewable energy.
The concerns about the hunger for massive amounts of energy by large tech companies should give other companies, such as Energy and Water Development Corp. (OTCQB: EAWD), points to reflect upon and possibly come up with scalable solutions that power-hungry companies can implement to keep their energy consumption as low as is practically possible.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
The power demands of advanced computing and artificial intelligence (AI) companies have begun raising concerns among some investors regarding whether this field should be represented as greatly as it is in sustainable funds. Already, asset managers in charge of environmental, social and governance (ESG) funds worth hundreds of billions have been calling out big tech firms such as Alphabet and Microsoft on the impact their operations have on the environment.
Six fund executives in the United States and Europe have revealed that they are closely examining the environmental impact of AI on the environment. This comes after major tech companies spearheading the artificial intelligence race begun reporting increases in their greenhouse-gas emissions. For example, Alphabet announced a 13% increase in total emissions, explaining that the increase was attributed to materials and power needs for data centers. Microsoft also announced a 30.9% rise in supply-chain emissions last year.
The thirst for power by major players in this field appears relentless, however, as cloud computing and artificial intelligence continue to drive significant growth. This has seen some funds turn to tech stocks, because companies in this market produce less greenhouse gases than others in sectors such as energy and manufacturing, while making outsized market gains.
A review of top holdings of huge funds show that most are greatly invested in tech giants, including Amazon, Apple, Nvidia, Meta, Microsoft and Alphabet.
Data from Goldman Sachs estimates that AI will significantly increase power demand from data centers by 160% in the next five or so years. Senior ESG research analyst at Morgan Stanley, Jason Qi, has also highlighted the need for more relevant data on energy use of these companies. Qi notes that companies are sharing surface-level data instead of specific data on power consumption related to AI, the volume of power supply deals, duration of use and geographic distribution. Investors and analysts believe that if concerns on increasing emissions aren’t addressed, investments could be affected.
It appears companies in the field are working on these issues, however, with Meta announcing that it had been offsetting emissions from its operations. Apple and Amazon also revealed in their recent environmental reports that their emissions were dropping.
Some expect these players to shift to nuclear energy, with the rise in investments into nuclear signaling this change. Just last week, Microsoft announced that it had entered a deal to revive a nuclear plant in Pennsylvania. This comes after Amazon revealed earlier this year that it had begun purchasing nuclear power to supplement renewable energy.
The concerns about the hunger for massive amounts of energy by large tech companies should give other companies, such as Energy and Water Development Corp. (OTCQB: EAWD), points to reflect upon and possibly come up with scalable solutions that power-hungry companies can implement to keep their energy consumption as low as is practically possible.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
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