Elon Musk's Security Team Deputized as He Defends DOGE at CPAC
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Yahoo
22 minutes ago
- Yahoo
Trump's AI plan calls for massive data centers. Here's how it may affect energy in the U.S.
President Donald Trump's plan to boost artificial intelligence and build data centers across the U.S. could speed up a building boom that was already expected to strain the nation's ability to power it. The White House released the 'AI Action Plan' Wednesday, vowing to expedite permitting for construction of energy-intensive data centers as it looks to make the country a leader in a business that tech companies and others are pouring billions of dollars into. The plan says to combat 'radical climate dogma,' a number of restrictions — including clean air and water laws — could be lifted, aligning with Trump's 'American energy dominance' agenda and his efforts to undercut clean energy. Here's what you need to know. What AI means for the environment Massive amounts of electricity are needed to support the complex servers, equipment and more for AI. Electricity demand from data centers worldwide is set to more than double by 2030, to slightly more than the entire electricity consumption of Japan today, the International Energy Agency said earlier this year. In many cases, that electricity may come from burning coal or natural gas. These fossil fuels emit planet-warming greenhouse gas emissions, including carbon dioxide and methane. This in turn is tied to extreme weather events that are becoming more severe, frequent and costly. The data centers used to fuel AI also need a tremendous amount of water to keep cool. That means they can strain water sources in areas that may have little to spare. What Big Tech is saying and doing about finding all that power Typically, tech giants, up-and-comers and other developers try to keep an existing power plant online to meet demand, experts say, and most existing power plants in the U.S. are still producing electricity using fossil fuels — most often natural gas. In certain areas of the U.S., a combination of renewables and energy storage in the form of batteries are coming online. But tapping into nuclear power is especially of interest as a way to reduce data center-induced emissions while still meeting demand and staying competitive. Amazon said last month it would spend $20 billion on data center sites in Pennsylvania, including one alongside a nuclear power plant. The investment allows Amazon to plug right into the plant, a scrutinized but faster approach for the company's development timeline. Meta recently signed a deal to secure nuclear power to meet its computing needs. Microsoft plans to buy energy from the Three Mile Island nuclear power plant, and Google previously signed a contract to purchase it from multiple small modular reactors in the works. What's at stake in the kind of energy that powers data centers Data centers are often built where electricity is cheapest, and often, that's not from renewables. And sometimes data centers are cited as a reason to extend the lives of traditional, fossil-fuel-burning power plants. But just this week, United Nations Secretary-General António Guterres called on the world's largest tech players to fuel their data center needs entirely with renewables by 2030. It's necessary to use fewer fossil fuels, he said. Experts say it's possible for developers, investors and the tech industry to decarbonize. However, though industry can do a lot with clean energy, the emerging demands are so big that it can't be clean energy alone, said University of Pennsylvania engineering professor Benjamin Lee. More generative AI, ChatGPT and massive data centers means 'relying on wind and solar alone with batteries becomes really, really expensive,' Lee added, hence the attention on natural gas, but also nuclear. What does AI growth mean for my electricity bills? Regardless of what powers AI, the simple law of supply and demand makes it all but certain that costs for consumers will rise. New data center projects might require both new energy generation and existing generation. Developers might also invest in batteries or other infrastructure like transmission lines. All of this costs money, and it needs to be paid for from somewhere. 'In a lot of places in the U.S., they are seeing that rates are going up because utilities are making these moves to try to plan,' said Amanda Smith, a senior scientist at research organization Project Drawdown. 'They're planning transmission infrastructure, new power plants for the growth and the load that's projected, which is what we want them to do," she added. "But we as ratepayers will wind up seeing rates go up to cover that.' ___ Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ___ Read more of AP's climate coverage at ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at Alexa St. John, The Associated Press
Forbes
22 minutes ago
- Forbes
Cut 'Em Loose With No Government Props
(CFOTO/Future Publishing via Getty Images) CFOTO/Future Publishing via Getty Images The Trump Administration is seriously considering privatizing Fannie Mae and Freddie Mac. It's long past time that it did this. The business of these two giants is to bundle and sell mortgages to investors with a government guarantee. That is, investors are covered if there are losses because of homeowner defaults. Washington, via the Federal Housing Finance Agency, took control of both entities in 2008 because of their massive losses. The seizures were called 'conservatorships.' The takeover was supposed to be temporary, yet here we are nearly a generation later, and the conservatorships are still intact. Fannie and Freddie are the elephants in the housing market, backing some $7 trillion in mortgages. They have an eye-popping line of credit with the Treasury Department of $254 billion. They charge a so-called guarantee fee of around two-thirds of 1% on each mortgage. Fannie tends to work with larger financial institutions, while Freddie goes with smaller ones. It's a nice business. As President Trump noted, they are gushing cash. Trumpites estimate the market cap of these two monsters would be $330 billion, with the government's share coming to more than $250 billion. In these times of rivers of red ink in Washington, the prospect of getting that much cash without raising taxes should be irresistible. The two got into trouble because they went heavily into debt. Why not, they figured. The higher the leverage, the bigger the profits, which shareholders loved. They could borrow at rock-bottom interest rates because there was an implicit government guarantee. It wasn't written into law, but the markets figured Uncle Sam would come to the rescue if there were trouble. That ar-rived with the financial crisis that began in 2007, when the housing market was imploding. Washington stepped in. But shareholders were largely wiped out. What made the two particularly complacent was their extraordinary political muscle, especially Fannie Mae's. They made sure every member of Congress learned how important they were to constituents involved in local housing markets. And jobs were to be had for congressional relatives and friends. The challenges of pushing Fannie and Freddie out of the Washington nest are real, but that shouldn't deter the move. Critics say changing the status quo will raise mortgage rates, a particularly sensitive topic at a time when housing affordability is a big issue. If Fannie and Freddie are to be truly private companies, they'll need higher profits, which could lead to more expensive mortgages. Guarantee fees for mortgages would also likely go up. This is why the Trump Administration doesn't want to do away with guarantees, implicit or explicit. But this would put Fannie and Freddie back where they were when they got in trouble. If there are any guarantees, the two monsters should have to pay Uncle Sam realistic insurance fees, which would run into the tens of billions of dollars. Critics underestimate the power of competition. Instead, the two enterprises should be broken up. Competition works. As for mortgage rates, the problem is the Federal Reserve, whose ignorance of inflation is keeping the cost ofmoney unnecessarily high.
Bloomberg
23 minutes ago
- Bloomberg
Canada Talks Up Pension Funds' Financial Muscle as Lever in US Trade Talks
Canada's major pension funds could boost their investments in the US, a top Canadian cabinet minister said, as the country looks to negotiate a trade agreement with the Trump administration. Dominic LeBlanc, the minister responsible for US trade, is in Washington for talks with US lawmakers. He brought up Canada's pension funds when asked if President Donald Trump will seek a specific pledge for more investment into the US.
