This week’s stories come from Europe, China and USA
1-Europe’s data center power demand estimated to triple by 2030: McKinsey
Europe’s data center power usage is projected to triple by 2030, per a McKinsey report. This requires a substantial increase in electricity supply from primarily low-carbon sources and upgrades to the grid infrastructure, said the report.
In Europe—including the EU, Norway, Switzerland, and the UK—the IT load demand for data centers is expected to grow from 10 GW today to around 35 GW by 2030, according to McKinsey. Current adoption rates suggest that Europe’s data center power consumption could rise from about 62 TWh today to over 150 TWh by the decade’s end. By 2030, data centers may account for 5% of total European power consumption, up from 2% today. Addressing this demand will require at least $250-300 billion in infrastructure investments, excluding the cost of power generation capacity, revealed the report.
Investment in data centers increased recently as digitalization and AI adoption accelerate. This growth raises concerns about how countries will meet the anticipated increase in electricity demand driven by the expansion of large data centers, revealed the report.
As a side note, International Energy Agency (IEA) underlines that while most data center growth will come from the U.S., countries like China and those in Europe are also set to see more data center launches in the coming years.
2-ChatGPT to manufacture its own chips
OpenAI, the company behind ChatGPT, reportedly aiming to develop its own AI chip by 2026. To do that it is collaborating with TSMC and Broadcom on this in-house project. I read this story at Reuters and OpenAI has shifted away from establishing its own manufacturing facilities and will instead focus on chip design internally. The company has been working with Broadcom on a specialized AI chip for model processing, which could be ready as early as 2026.
Additionally, OpenAI plans to incorporate AMD chips via Microsoft’s Azure cloud platform for training its AI models. Previously, the company mainly used Nvidia GPUs, but supply shortages, delays, and high training costs have pushed OpenAI to consider alternatives, as noted by Reuters.
3-BYD’s revenues surpass Tesla’s for first time
Chinese electric vehicle (EV) giant BYD has reported a significant surge in its quarterly revenues, surpassing Tesla’s for the first time. I saw this story at the BBC and the company posted over 200 billion yuan ($28.2 billion) in revenue in Q3 2023. This figure marks a 24% increase compared to the same period last year, exceeding Tesla’s quarterly revenue, which amounted to USD25.2 billion.
Despite this revenue boost, Tesla still led in EV sales, selling more vehicles than BYD in the third quarter. The increase in EV sales in China has been fueled by government subsidies aimed at encouraging consumers to swap their petrol-powered cars for electric or hybrid models.(By the way, I have a story here about the Turkish EV Togg)
Additionally, BYD achieved a monthly sales record in the final month of the quarter, further solidifying its position as China’s best-selling car manufacturer. However, the company is facing growing opposition abroad, particularly concerning the Chinese government’s financial support for domestic carmakers like BYD.
Earlier this week, the European Union imposed tariffs of up to 45.3% on Chinese-made EV imports, a move aimed at countering what is seen as unfair state subsidies for China’s automotive industry. Chinese EV manufacturers are also subject to a 100% tax in the United States and Canada.
The tariffs come in response to concerns that Chinese carmakers, buoyed by government support, could undercut international competitors with lower prices. As of last week, official data revealed that 1.57 million applications had been made for a national subsidy of $2,800 for every older vehicle traded in for a greener alternative.
