"I've never seen any technology advance faster than this." The chip shortage may be behind us, but AI and EVs are expanding at such a rapacious rate that the world will face supply crunches in electricity and transformers next year, says Elon Musk.
In a dial-in Q&A to close the Bosch Connected World conference, the recent Nobel Peace Prize nominee spoke about self-driving cars and humanoid robots, and hinted at what's coming next from Tesla in electric vehicles – but he clearly wanted to send the clearest possible signal to industry as well: Get going on clean energy generation, and make as many electrical transformers as you can.
We'll let Musk take it from here in his own words, lightly edited:
"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.
I think we really are on the edge of probably the biggest technology revolution that has ever existed.
"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.
"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 will 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.
"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.
"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.
"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."
The idea that the developed world's lights will begin flickering in 2025 because there are so many AIs being trained is pretty remarkable, and if Musk is right, it greatly underscores the need for massive amounts of clean energy, from a variety of different sources, yesterday.
Interesting times, indeed!
Source: Bosch Connected World conference
The biggest and most important factor that he's overlooking though, is the collapsing USD! When we go into hyperinflation mode, the electrical utilities will get a one-two punch that will knock them all to the mat for a ten count. No utility will be able to afford the ultra high cost of fuels to burn to make electricity, and too few customers will be able to pay electric bills that have gone up five to ten times! Who can afford to pay even a doubling right now? Without electricity to run the oil refineries, no Diesel fuel will be produced and no coal will be shipped to the power plants, and no iron ore will go to the steel mills, therefor no steel for all of the transformers that will be needed. Without electricity, no banking will be possible, so no one will be able to buy or sell much of anything. If you don't have something to barter with, or have some precious metals to buy the few things that might be available, you are out of luck!
How will the electric utilities be able to pay their workers enough to come in and do their extremely dangerous jobs to keep the electricity going down the wires? The insurance companies view linemen as being akin to race car drivers and astronauts, one mistake and you could be dead! And thus we can see how our electrified civilization and world will die out. Slowly at first, and then quite suddenly!
Technology may help there too. Early home computers had a heavy brick for a power supply, containing lots of copper and iron. Now an equivalent switching supply has a relatively tiny amount of copper and iron oxide. The higher the voltage feeding the switching regulator, the smaller the actual inductor. I'm not sure whether the power grid industry has adopted the latest technology, or whether they build "old school" transformers just due to conservatism. Some of the transformer winding factories might be many decades old, and could still produce old-style transformers for decades more, so they'd be reluctant to scrap that investment.
Also, if demand for power for AI ramps up, electricity costs will rise, and other industries with lower profit/kW will shut down, freeing supply. Likewise, if costs rise, consumers will turn thermostats down, stop leaving unnecessary lights on, etc.
That or we stop feeding it!!!!!!!!!!!!