Bytes: Week in Review – New chip exports for China, Microsoft to pay electricity for AI data centers, and Gemini will power Apple’s AI
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What are the implications of AI data centers on energy consumption?
The data center reckoning has arrived. From American Public Media, this is Marketplace Tech. I'm Megan McCarty Carino.
Those massive AI data centers going in across the country can't use as much energy as an entire city. President Trump said he wants tech companies to pay their own way and touted a new Microsoft pledge to bear the full cost of its AI energy needs. We're digging into it on today's Marketplace Tech Bytes Week in Review. Plus, Apple announces its long-awaited new AI Siri will be powered by Google. And NVIDIA can once again export its second-best H200 chips to China if it follows some new security rules and pays the U.S. government 25% of its sales. Here to discuss all this is Anita Ramaswamy, columnist at The Information.
They are talking about testing the chips. But I think a lot of folks are wondering, will this actually stop shipments of the chips to China? And so definitely rigor is a question. And then, you know, there's been some reporting even in the last couple of days that China is stopping the chips from reaching the Chinese border.
Yeah, this is a key point. I think Jensen Wang, NVIDIA's CEO, had been sort of lobbying to sell these chips in China. It's a major market for them. You know, they make a lot of money selling those chips. And his argument had been kind of, It's better to have China rely on American, you know, infrastructure for its whole AI economy.
How is Microsoft addressing the energy costs of AI data centers?
But in the meantime, China has started to make moves, you know, even as these export controls have been loosened to, you know, deny companies and, you know, different institutions in China from using these chips because they want to grow their domestic chip supply, right?
Yeah, that's exactly it. I mean, the Chinese government wants to support homegrown businesses like Huawei in their pursuit of more advanced AI chips. Right now, NVIDIA's chips are considered to be the best out there for running AI. And so there's still a lot of export and import activity that's been happening, even though it's effectively been banned since April. And I think the key point here is actually that the rule is such that China cannot get more than half of the total amount of chips that are being sold to American customers. So there is sort of a natural mechanism for trying to control the number of chips that end up there. And whether or not that actually ends up being effective is still to be seen.
And this kind of interesting arrangement where the U.S. government gets a 25 percent cut, which we saw with the H20 chips that they kind of made a deal that I think was for 15 percent. So this is this is an even higher cut, I guess.
Yeah, it is. And it's going to be assessed like a tariff. So the ships, the ships are actually manufactured in Taiwan. And then when they're sent back to the US, that's when that 25% fee is going to be assessed.
All right, well, now we want to talk about some pressure that's been mounting on these huge AI data centers that are being built all over the country by what we call hyperscalers, Microsoft, Google, Amazon, Meta. These giant facilities, they basically use as much power as an entire city. And there's been a lot of concern about how they're affecting electricity prices for the people who live nearby. Obviously, you know, as a ratepayer, They pay for the electricity that they use, but they increase competition for that resource, which can raise prices.
What new security rules affect Nvidia's chip exports to China?
They usually necessitate new transmission lines, often new generation facilities. And those costs are often shared among all rate payers. So this week, I feel like we kind of reached a critical point, like a watershed moment here. President Trump said on Truth Social that he wanted tech companies to pay their fair share for the power. Microsoft announced this new policy to pay more for electricity and to forego some of these sort of tax incentives that often get offered for these data centers. Here's Microsoft President Brad Smith on CNBC this week talking about how they will be a good neighbor.
People do have questions. They're pointed questions.
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Chapters
6 chapters
1
What are the implications of AI data centers on energy consumption?
0:00–1:46
2
How is Microsoft addressing the energy costs of AI data centers?
1:46–3:47
3
What new security rules affect Nvidia's chip exports to China?
3:47–8:08
4
What does the partnership between Apple and Google mean for Siri?
8:08–9:52
5
How are local communities responding to the growth of AI data centers?
9:52–11:10
6
What political pressures are emerging around AI and data centers?
11:10–12:17