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On Tuesday, SoftBank, the Japanese financial giant, announced plans to dump all 32 million of its shares in Nvidia, the AI chip maker. The news wont be the needle that pops the AI bubble, but it did cause enough of a stir to make Nvidias shares drop 2% Tuesday morning. The bad vibes were muted somewhat by news of what SoftBank says it will do with the proceeds of the sell off, along with those from the sale of some of its $9.17 billion T-Mobile stake: The firm will double down on another big bet in the AI spaceOpenAI. SoftBank expects to directly invest $30 billion in OpenAI this year, according to its second-quarter financial statement in September. And it had already committed $19 billion to the $500 billion Project Stargate infrastructure initiative (with OpenAI and Oracle). To bankroll these commitments, Masayoshi Son, SoftBank’s CEO, likely needed to free up funds. Hence the Nvidia sell-off. For years, Son has talked about SoftBank’s strategy to invest in the computing platforms of the future, including AI. His firm amassed a reported $4 billion stake in Nvidia back in 2017, only to dump the shares in 2019. At the time Son had called Nvidia the the core company of the AI revolution. He now believes that OpenAI will be that core company. During SoftBanks annual general meeting in June, Son declared he is all in on OpenAI. Hed always wanted to be an early major investor in the AI super-startup, he said, but Microsoft beat him to the punch. OpenAI, he predicted, will one day go public and eventually become the most valuable company in the world, he said. Nvidia reported $46.7 billion in revenues during its July-ending quarter (and crossed $4 trillion in market cap), while OpenAI doesnt expect to turn a profit until 2029. But by divesting of Nvidia and doubling down on OpenAI, Son can play a more active role in the platforms expansion via initiatives like the Stargate Project, which will finance a major buildout of AI infrastructure. SoftBank is still indirectly entwined in Nvidias fortunes, which also rest on the broad expansion of AI. The entire stock market is being propped up by confidence in big tech companies that are investing huge amounts in AI. Investors are placing a lot of faith in the idea that generative AI, a mostly unproven technology, will create valuable new efficiencies for businesses in the coming years. Compounding the concern is the fact that a relatively small group of wealthy companiesSoftBank, Nvidia, and OpenAIare investing in each other, which has fed fears that theyre involved in a sort of self-inflating bubble. Its unclear if or when that bubble will popThat bubble may well pop at some point. For nowUntil then, Son has made his preference clear: software over hardware, a bet that feels like a big vote of confidence for AI.
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E-Commerce
When Amazon proposed building its Project Blue data center in Tucson, Arizona, the company faced intense pushback. Residents raised concerns about the enormous amounts of water and electricity that the data center would need, two major ways such projects impact the environment, especially in a desert city. Ultimately, Tucsons town council rejected the proposal (though its developer hasnt given up). But the story highlights both the growing environmental impacts of data centers, and how location matters to that impact. A study published this week in the journal Nature Sustainability makes that connection even clearer. Led by researchers at Cornell University, the study analyzed the environmental impact that data centers could have in the U.S. as their growth continues, and created a state-by-state look at where those data centers should go to avoid the worst effects. The growing impact of AI Data centers demand a lot of electricity, so much so that they are straining our energy grid. In order to quickly meet that growing energy demand, developers are building more fossil fuel infrastructure, like natural gas power plants. The data center surge has also delayed the planned retirements of coal plants. The current rate of AI growth in the U.S. would put 24 to 44 million metric tons of carbon dioxide into the atmosphere by 2030, the study authors found. Thats equivalent to adding 5 to 10 million cars to the countrys roads. That growth would also drain 731 to 1,125 million cubic meters of water every yearas much as 6 to 10 million Americans annual average household water usage. All together, that means the AI industry is unlikely to meet its net-zero aspirations by 2030, the study reads, without massively relying on carbon offsetswhich the researchers call highly uncertainor water restoration efforts. Still, researchers didnt only want to see the environmental trajectory that this AI boom would take. They also wanted to figure out what choices could steer it toward sustainability, Fengqi You, a Cornell engineering professor who led the study, said in a statement. How location matters The location of data centers matters to those impacts, and developers could cut data centers environmental footprints by building them in different places, the researchers found. Some data centers are being planned in regions that are already water scarce, like Arizona or Nevada, even though data centers require a lot of water themselves. Instead, locating projects in regions with lower water-stress and improving cooling efficiency could cut water demands by 52%, per the study. In other places, the massive surge of data centers can strain the grid or water resources; Virginia, for example, is the biggest data center market in the world, with more than 600 facilities clustered around Washington, D.C., and Richmond. Data center companies have wanted to be close to workers in D.C., but continuing to build data centers there just adds to that strain. What powers the grid that supports a data center matters too. Some states like New York may have energy grids powered by more renewables or may be investing in more clean energy, which means fewer carbon emissions. But just focusing on reducing a projects carbon footprint could actually increase its water footprint, the researchers found. Conversely, putting data centers in the best locations for water use reduced their overall carbon footprint, too. Researchers used a combined carbon- and water-focused strategy to find the best places to build data centers to minimize their environmental impact. And those states are clustered in the midwest, specifically Texas, Montana, Nebraska, and South Dakota. The researchers acknowledge that certain technologies, like better liquid cooling and improved server utilization, could bring down data centers environmental impact toopotentially removing 7% of carbon dioxide and lowering water use by 29%. Those are just more decisions, like location, that companies could consider when building more data centers. This is the build-out moment, You said. The AI infrastructure choices we make this decade will decide whether AI accelerates climate progress or becomes a new environmental burden.
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E-Commerce
Just when you thought youd seen it all on Capitol Hill, reopening the federal government appears to have hit yet another roadblock: Hemp. A day after Democratic Senators reached a deal with their Republican counterparts in the Senate to end the longest government shutdown in history, a vote on the agreement was held up by a provision in the bill that would ban the unregulated sale of hemp-based or derived products. The provision relates to funding for the Department of Agriculture, and was flagged by Senator Rand Paul of Kentucky, home to a burgeoning hemp industry. Paul introduced an amendment to strip the language on Monday, but the amendment failed. Subsequently, the Senate passed the bill with the prohibitive language intact. However, the bill, which would impact everything from smokable hemp products to hemp-derived THC drinks, wont take effect until 365 days after it is signed into law. Sales of hemp and hemp-derived products were allowed under the 2018 Farm Bill, and thats led to the sale of certain cannabis-derived products around the country, sometimes in contrast to state laws. The new language would ban sales of any products containing THC, of which hemp may contain trace amounts, effectively outlawing it. On X, Paul defended his amendment, even if it slowed the reopening process, saying that protecting constituents jobs is under his purview. Just to be clear: I am not delaying this bill, he wrote on Monday. The timing is already fixed under Senate procedure. But there is extraneous language in this package that has nothing to do with reopening the government and would harm Kentuckys hemp farmers and small businesses. Standing up for Kentucky jobs is part of my job. Notably, Kentuckys other Senator, Mitch McConnell, was at odds with Paul over his proposed amendment. The hemp industry in Kentucky employs roughly 3,500 people, and worries about a potential ban have been floating around since earlier this year. A statement released in June by the Kentucky Hemp Association seemingly preempted this weeks action in the Senate, too. Kentucky has emerged as a national leader in hemp production and innovation, it reads. Now is not the time for the federal government to impose arbitrary changes that disrupt this progress. The hemp industry has consistently called for thoughtful regulation that protects consumers while preserving economic opportunities for farmers, it continues. Rather than rolling back years of responsible development, federal policy should reinforce this thriving sectornot seek to recriminalize it.
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E-Commerce
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