In a recent Q&A to close the Bosch Connected World conference, the recent Nobel Peace Prize nominee , Elon Musk, the tech entrepreneur behind companies like Tesla and xAI, has sounded the alarm about a looming shortage in electricity and transformers. This shortage, he says, is a result of the rapid growth in artificial intelligence (AI) and electric vehicles (EVs).
Surge in Demand Driven by AI and EVs
Musk highlighted the astonishing rate at which AI computing power is growing, likening it to a modern-day gold rush. With AI companies like xAI needing huge amounts of computing power, the electricity demand is expected to skyrocket.
“The artificial intelligence compute coming online appears to be increasing by a factor of 10 every six months. Like, obviously that cannot continue at such a high rate forever, or it’ll exceed the mass of the universe, but I’ve never seen anything like it. The chip rush is bigger than any gold rush that’s ever existed,” said Musk.
Additionally, the rise in popularity of electric vehicles, particularly those made by Tesla, puts even more strain on our electrical systems. As more EVs hit the road, the need for electricity keeps climbing, creating a significant demand for clean energy and transformers.
“Then, the next shortage will be electricity. They won’t be able to find enough electricity to run all the chips. I think next year, you’ll see they just can’t find enough electricity to run all the chips,” he added.
“The simultaneous growth of electric cars and AI, both of which need electricity, both of which need voltage transformers – I think, is creating a tremendous demand for electrical equipment and for electrical power generation.”
Musk pointed out a critical bottleneck in the supply chain: voltage step-down transformers. These transformers are essential for powering AI systems, yet their scarcity could disrupt the smooth functioning of AI technologies.
“You know, there’s supposedly a Chinese curse: ‘May you live in interesting times.’ Well, we live in the most interesting of times,” Musk noted.
It’s ironic, Musk noted that we need transformers to power the very AI systems that are driving up the demand. This interconnectedness between AI and EVs means that both industries are competing for the same resources, putting pressure on electrical infrastructure.
Impact on Supply Chains and the Economy
The shortage of semiconductors, or chips, has already caused disruptions across various industries worldwide. With supply chains strained and demand soaring due to the COVID-19 pandemic, the situation is expected to worsen as the demand for electrical equipment, especially transformers, grows.
“The constraints on AI compute are very predictable… A year ago, the shortage was chips; neural net chips. Then, it was very easy to predict that the next shortage would be voltage step-down transformers. You’ve got to feed the power to these things. If you’ve got 100-300 kilovolts coming out of a utility and it’s got to step down all the way to six volts, that’s a lot of stepping down,” stated Musk.
Musk predicts that this shortage could have far-reaching economic consequences, affecting industries that rely heavily on AI and clean energy solutions.
Elon Musk’s warnings are a wake-up call for industry leaders and policymakers. He’s urging urgent action to ramp up clean energy generation and increase the production of electrical transformers to avoid a potential crisis.
“My not-that-funny joke is that you need transformers to run transformers. You know, the AI is like… There’s this thing called a transformer in AI… I don’t know, it’s a combination of sort of neural nets… Anyway, they’re running out of transformers to run transformers,” said Musk reported New Atlas.
Musk stresses the importance of proactive measures to address these challenges as the world moves towards an AI-driven future. By investing in clean energy initiatives and strengthening electrical infrastructure, we can better prepare for the transformative impact of AI while ensuring a sustainable energy future.
“I think we really are on the edge of probably the biggest technology revolution that has ever existed. You know, there’s supposedly a Chinese curse: ‘May you live in interesting times.’ Well, we live in the most interesting of times. For a while, it was making me a bit depressed, frankly. I was like, ‘Well, will they take over? Will we be useless?’ But the way I reconciled myself to this question was: Would I rather be alive to see the AI apocalypse or not? I’m like, I guess I’d like to see this. It’s not gonna be boring.
Musk’s predictions shed light on the broader implications of the AI revolution, emphasizing the need for innovative solutions to balance technological advancement with environmental sustainability. As AI continues to reshape industries and societies, it’s crucial to anticipate and mitigate potential challenges, such as supply chain disruptions and resource shortages.
Elon Musk’s warning about an electricity and transformer shortage by 2025 underscores the urgent need for strategic planning and investment in clean energy solutions. By taking action now, we can build a brighter future powered by sustainable energy for generations to come.
