AI is doing extraordinary things, but its continued progress might be contingent on how much value it adds to society.
This seems to be the belief of Microsoft CEO Satya Nadella, who offered a stark reminder to the tech industry: the escalating energy demands of artificial intelligence will necessitate a clear and demonstrable social and economic benefit. In a recent discussion, Nadella unpacked the critical relationship between AI’s computational power, its significant energy footprint, and the ultimate need for “social permission” to continue its expansion.
Nadella laid out the foundational issue, stating, “If you sort of really step back and say intelligence is one of a log of compute, and then you ask the question, how much energy does compute consume? Let’s take in the United States, maybe 2% today, 3% tops, let’s say doubles. It’s 6%. That’s like massive because the amount of extra energy that needs to be produced in order for AI to use it is pretty high.”
This projection underscores the burgeoning challenge facing the tech world. The insatiable appetite of AI models for computational power translates directly into a substantial and growing demand for electricity. This reality, Nadella suggests, brings with it a societal expectation.
He continued, “I think that’s why we all have to sort of keep in mind that if there’s one lesson history has taught us is that if you’re going to use energy, you better have social permission to use energy. So that means you’ve got to make sure that the output of this AI is socially useful.”
Nadella’s framing of “social permission” is a crucial one, moving the conversation beyond mere technical feasibility to one of societal license. He elaborates on what this means in practical terms: “In other words, if we really are not creating social surplus, economic surplus as measured by countries and communities, we just can’t consume energy.”
The core of his argument lies in this imperative to generate tangible value. The “social surplus” and “economic surplus” he refers to are not just abstract economic terms but represent real-world benefits that improve people’s lives and strengthen communities.
Looking ahead, Nadella shifted the focus from the problem of energy production to the challenge of creating valuable AI applications. “Everybody’s today hot and bothered about, okay, what do I do about energy production? I think the real question in the next five years is we’ve gotta produce enough products that are creating great value,” he asserted. He expressed confidence in the potential of AI in key sectors, “which I’m very confident of by, by the way, in healthcare and education, in productivity. So there’s many, many domains.”
He concluded with a call to action for the tech industry, emphasizing the need for measurable impact beyond internal benchmarks. “That’s the real challenge for us as a tech industry, is to prove that what we have created is showing up in real stats, that is not just an AGI or AI benchmark,” Nadella urged.
Nadella’s comments come at a time when the tech industry is grappling with the environmental impact of the AI boom. Data centers, the backbone of the AI revolution, are significant consumers of electricity and water for cooling. Projections from various analysts suggest that the energy consumption of data centers could double in the coming years, largely driven by the demands of AI workloads. This has spurred a race to develop more energy-efficient AI hardware and software, and to power data centers with renewable energy sources. Microsoft itself has committed to being carbon negative by 2030 and is investing in sustainable data center technologies. But Nadella says that if AI does end up consuming a large fraction of the world’s energy, it’ll need to have a broad based mandate for its continued use — if a large section of the world’s population believes that AI’s benefits are passing them by, it might be socially hard to allocate ever-greater amounts of electricity to the sector. And thus, AI’s progress, in a way, could be determined by how much it can positively impact the lives of a majority of the world’s population.