Breakthroughs for AI promise to slash energy needs, Temasek says

Advances in artificial intelligence could dramatically alter the energy demands from a sector that’s pressuring global electricity grids, according to Temasek Holdings Pte, Singapore’s state-owned investor.

Adoption of more efficient AI architecture, along with improved innovation in materials discovery and better chipmaking have potential to deliver an industry with a much lower impact, said Russell Tham, head of emerging technologies at Temasek Global Investments.

“You may see the energy equation for generating AI tokens change quite drastically,” Tham said at the Bloomberg Sustainable Business Summit in Singapore on Tuesday. The existing generation of AI “as amazing as it is, as rapid as the progress is, is fundamentally an ineffective AI architecture,” he said.

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Grid constraints and ballooning electricity prices are prompting data center operators to explore new ways to power their facilities. At current pace, data centers in the US will account for about 20% of the nation’s electricity consumption in 2035, up from 5.9% today, according to BloombergNEF.

Firms like UK-based CuspAI, backed by investors including Temasek and Bezos Expeditions, are seeking to improve production of semiconductors, potentially by reducing or eliminate the use of some rare metals.

“We’ve invested in very novel material and chip architecture that is vastly more energy efficient,” Tham said. “We’ve invested in new AI model architectures — yet to be proven — that are vastly more energy efficient.”

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