AI productivity gains could mask social consequences lasting generations, says AI expert
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The construction of an "artificial intelligence (AI) factory" in northern Tasmania will bring economic benefits to the state and help ensure Australian data isn't sent overseas, an AI expert says. A company called Firmus Technologies is building a $2.1 billion AI factory in the Launceston suburb of St Leonards, set to be operational in the first half of next year. Co-chief executive Tim Rosenfield said the factory was different from a typical data centre — a building which houses computers and storage systems. "With an AI factory, the customer is the end user — it's you and me, it's folks in a bank, it's folks in a telco, it's folks in a mining company." Mr Rosenfield said AI factories produced the "tokens" needed for tools such as ChatGPT, a generative AI "chatbot" being increasingly used by Australians and people around the world. Toby Walsh, chief scientist at the University of New South Wales's AI Institute, welcomed the announcement of an AI factory in Tasmania. "People don't realise that to get things like ChatGPT serving up all those wonderful funny responses requires a lot of infrastructure in the cloud and we need to start building that infrastructure if we're going to be players in the AI race that's coming," Professor Walsh said. He said it was important these factories were built in Australia. "If they're overseas, we have to ship our data overseas — our sensitive personal data, our sensitive commercial data, our sensitive health data — with other people. That's a risk," he said. "And then the other risk is that — [and] we've seen this already that in the US — they can change their mind as to who they want to play with, and we may be therefore be easily cut off." Professor Walsh said big companies, including in tech and banking, would be relying on these factories. A data centre designed to be used by AI factories is also being built in Sydney, by NEXTDC. Firmus said it chose northern Tasmania as the location for its facility due to the availability of renewable energy and its cool climate. "We've always believed that green energy is an important part [of] delivering AI sustainably and responsibly," Mr Rosenfield said. Like data centres, AI factories require cooling systems due to the heat they generate. Mr Rosenfield said the Firmus project has a liquid cooling system that uses either oil or water in a closed loop. AI expert Toby Walsh said Tasmania was a logical location for an AI factory. "Tasmania is the obvious place to start building these because of the wonderful access that you have to hydroelectric power, to wind power, to do this in a sustainable way," he said. He said the use of a closed cycle cooling system would ensure the projects don't draw vast amounts of water from Tasmania's rivers and lakes. Mr Rosenfield said the factory would employ Tasmanians in construction and operation. "Roughly for every 50 megawatts or so of capacity, we're needing between 50 and 100 full-time staff to help operate this AI factory," he said. But Professor Walsh cast doubt on the number of employees the factory would require. "There will be a significant number of jobs to build these factories in the first couple of years, but once those factories are built, they don't employ that many people to run them." He said the project would, however, bring economic benefits to the state through the sales of tokens generated by the factory. Tasmanian Premier Jeremy Rockliff this week said he would establish an "AI factory zone" in northern Tasmania, where Firmus's project is being built. "We've worked very solidly together," Mr Rockliff said. "A business, an investment, saw an opportunity to invest in Tasmania, empowered by renewable energy." Tasmania is heading towards an election on July 19, and the Liberal party is not proposing to invest money in Firmus's factory. But Mr Rosenfield said the support was meaningful. "It's really a statement of intent that the government understands the importance of this new asset class, the AI factory, and is going to work to help us realise the vision of Tasmania and northern Tasmania as a globally significant hub of renewable AI," he said. It comes as other major Tasmanian projects have reported issues with getting enough power. The Boyer paper mill said this week it had not been able to secure Tasmanian-generated electricity to convert its coal-fired boilers to electric ones. Labor leader Dean Winter welcomed the project, but voiced concerns about power availability. "Firmus is a really exciting opportunity for the north," Mr Winter said. "But there's a big problem here — there isn't enough power. Firmus said the first stage of its project required 90 megawatts of energy. "The infrastructure for that is in place and the customer connection agreements are in place for that," Tim Rosenfield said. He said the company had been working with TasNetworks and the Australian Energy Market Operator for the past six to seven years on connecting to the grid. The company is planning a 300-megawatt second stage of the project, but Mr Rosenfield described it as "aspirational".
