Why Elon Wants to Put Data Centers in Space | Ramez Naam
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the bitcoin miners i know are all shifting to ai i think you've covered this as well and it's because they have access to power and that is the bottleneck and you just make more dollars per kilowatt hour going into an ai compute than you do in bitcoin ultimately uh and b because power is the constraint the you know value flows to what's scarce
Bang, bang. Today, guys, we got a great conversation with Ramez Nam. He's an investor at Planetary VC. And in this conversation, we're getting deep into the weeds of what's going on in the artificial intelligence space. We know that energy and power are a massive bottleneck. And Ramez is here to explain exactly what the potential solutions are, who's likely to win, and what are the various companies doing so that we can get more power to get to superintelligence. On top of that, we talk about how superintelligence is actually going to be applied. It's going to be general or narrow or What is it going to mean for you? And what are some of the companies that he's excited about that are actually helping to usher in a world where superintelligence makes you and I happier, healthier, wealthier, and richer?
Sounds good to me. And Ramez is here to explain it all. Here's my conversation with Ramez Nam. All right, Ramez, there's a massive problem in the AI industry. Energy and power are the bottleneck at the moment. Can you please help us understand why is this problem persist? And what are the potential solutions as to how we're going to get around this?
Yeah, absolutely. Like AI is hugely compute intensive. The way that we've been making AI better is through the scaling laws. And the scaling laws look awesome at the beginning, but they're brutal. It means you have to keep doubling the amount of compute that to get linear gains and add performance. So there's this huge race to do so. And we're just not used to expanding the grid at this pace. In the 50s, we built out the grid 5%, 7% growth a year. But for the last two decades, it's been zero growth. So we're just not accustomed to putting on new power or new sources of demand at this pace. So the poles and wires themselves are the bottleneck right now. Chip production is about twice the pace that we can hook things up to the grid.
And that's the bottleneck everyone is trying to work around.
Now, when you think about that bottleneck, can you walk through, there's different companies with different potential solutions for this. They're all kind of racing to see not only what solution is going to be the one that is the winner, but also how do they fund it? How do they build it? There's a lot of stuff, supply chain issues. What are the ones that you're most excited about or the ones you think are most noteworthy as a solution?
Well, let me walk you through the overall set of options people have. Option one is you're going to build a data center. You put in a request to the grid to get hooked up. And a few years ago, that was fine. Now it's maybe a five to seven year wait. Option two is behind the meter power. So people are trying to buy natural gas turbines to build on site at their data center. to run their load. The big turbines made by companies like GE are sold out five to seven years. So now they're turning to smaller turbines that are maybe a tenth, a twentieth the size, and a whole bunch of these things on the back of semi-tractor trailers, basically. And you have companies, you know, Boom Supersonic was trying to build a supersonic jet a few years ago, or as recently as six months ago.
They've pivoted to taking their engine and and making it a power plant for behind the meter power for data centers. Option three, one that I really love, is batteries. Just being really clever, we build the grid out for peak demand, for late afternoon in the summer when the AC is on. But most hours of the day, the poles and wires, which again are the bottleneck, are not loaded. So you take a battery, install it at your data center, fill it up at night, don't need to touch the grid in the afternoon, and suddenly you can get powered on a lot faster.
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