"The thing that will gate us the most is power. It’s the biggest strategic constraint…We might run out of money before we run out of silicon.” warns Martin Lund, EVP of Hardware at Cisco.
Some argue that China burns cheaper coals, so the energy consumed by Deepseek is cheaper. However it is important to note China's energy landscape has transformed dramatically over the past decade. While some think China relies mainly on cheap coal, the reality shows a strong shift toward clean energy. By the end of 2023, wind and solar power capacity had grown tenfold, with clean energy now generating over 58% of China's power. Coal use has dropped significantly, while clean energy use has risen from 15.5% to 26.4% of total energy consumption. The country has also become more energy efficient, using 26% less energy per unit of GDP than in 2012, while building expertise in renewable energy technology including wind, solar, nuclear, and hydropower systems.
DeepSeek's breakthrough in AI training efficiency raises important questions about our infrastructure thesis. While more efficient models might reduce individual training costs, the impact on total infrastructure demands remains unclear. Historical patterns suggest technological efficiency often increases total system usage (think cars and gas stations) - but AI's rapid evolution means we need to watch carefully how these efficient models perform at scale before drawing firm conclusions about future power demands.
Update (Jan 28, 2025):
Some argue that China burns cheaper coals, so the energy consumed by Deepseek is cheaper. However it is important to note China's energy landscape has transformed dramatically over the past decade. While some think China relies mainly on cheap coal, the reality shows a strong shift toward clean energy. By the end of 2023, wind and solar power capacity had grown tenfold, with clean energy now generating over 58% of China's power. Coal use has dropped significantly, while clean energy use has risen from 15.5% to 26.4% of total energy consumption. The country has also become more energy efficient, using 26% less energy per unit of GDP than in 2012, while building expertise in renewable energy technology including wind, solar, nuclear, and hydropower systems.
Update (Jan 27, 2025):
DeepSeek's breakthrough in AI training efficiency raises important questions about our infrastructure thesis. While more efficient models might reduce individual training costs, the impact on total infrastructure demands remains unclear. Historical patterns suggest technological efficiency often increases total system usage (think cars and gas stations) - but AI's rapid evolution means we need to watch carefully how these efficient models perform at scale before drawing firm conclusions about future power demands.
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