US AI investment may hit $1.4 trillion

Chapel Hill (US), Sep 1 (IANS) Investment in artificial intelligence infrastructure in the United States is expected to reach USD 1.4 trillion next year, accelerating an expansion compared with the building of railways in the 19th century, a former White House technology official has told G20 representatives.

David Sacks, a former White House AI czar, said that about USD 800 billion was being invested in AI-related capital expenditure in the United States this year.

“And that number is expected to be USD 1.4 trillion next year,” Sacks told a G20 session on emerging technologies.

The estimates were repeatedly being revised upwards as companies expanded data centres and the computing capacity needed to develop and operate artificial intelligence, he said.

“We really haven’t seen a build-out of this kind of infrastructure,” Sacks said. “You have to go all the way back to the railroads in the 1800s to see something of equal scale.”

He said the investment was greater than the expansion of fibre-optic networks during the development of the internet.

“It’s a new industrial revolution,” Sacks said.

If managed correctly, the AI expansion could help the United States reindustrialise, modernise its electricity grid and restore some manufacturing in advanced sectors, he said. Other countries could also benefit if they embraced the technology.

The rapid construction of data centres has, however, become politically contentious in the United States amid concerns about their effects on electricity prices and local communities.

Sacks said data centres could lower power costs if AI companies built new generation capacity instead of competing with residents for electricity from the existing grid.

“Data centres, if done right, they bring electricity costs down, not up, because the AI companies will generate net new power generation,” he said.

Companies could construct power facilities behind the meter to meet their own needs and return surplus electricity to the grid, Sacks said. The investment could also support long-delayed upgrades to transmission and other power infrastructure.

AI facilities were creating hundreds of thousands of construction and skilled-trade jobs, he said. Counties hosting the centres were also receiving revenue that could reduce the property-tax burden on residents.

Sacks cited Loudoun County in Virginia, one of the largest data-centre markets in the United States. He said its residents were paying an average of USD 6,000 less in property taxes because of revenue from AI companies.

He stressed that the federal government had not attempted to compel communities to accept data centres.

“It is fundamentally a local decision, and we respect that and have done nothing to change that even though we do think that ultimately there is a good deal to be had there for local communities if they lean into it,” Sacks said.

He also said governments should nurture the AI boom rather than impose regulations that could restrict it.

“The AI boom is already here,” Sacks said. “And I think this is a very positive thing.”

The discussion formed part of a G20 session examining how emerging technologies could drive economic growth. Ministers considered the policy conditions needed to promote innovation, attract investment and accelerate the commercial use of new technologies.

–IANS

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