The MAD Podcast: How AI Gets Built — with Matt Turck
00:21:16 · Matt Turck, Nathan Benaich
[00:21:16] S1: Okay. All right. So maybe to, close this part of, the conversation on, AGI, RSI, cyber, and basically things getting out of hand. Where are you on the pacing the frontier idea? Is that something that you think makes sense? Something that's realistic or not? [00:21:37] S0: I can see multiple like angles on this one. You know, in in some way if you ask the general public, okay, all the lab leaders are saying we have something that we just like increasingly can't control that's dangerous, that has caused these incidents. Like, do you think it's worth continuing or like just figuring out what's going on before you make it worse? And I think a logical, like, immune reaction is like, yeah, we should probably, like, figure it out before we go much further. I think the practical reality is that there's so much money at stake from all sorts of different parties in the economy that I think it... That kind of level of collaboration and coordination is really difficult and is sort of like peak game theory where maybe some some participants, like, support it because they are behind. Other ones support it because it plays to their general agenda, whether their agenda is like fair or not fair or seeking another goal. I I I don't know. But I think the the practical things are like who decides it? How do you measure it? How do you implement it? When do you know when to stop or start. There's some proposals like sending like external evaluators into labs to sort of measure the stuff. Trying to see [00:22:48] S1: big revenge of KPMG.
00:22:48 · Matt Turck, Nathan Benaich
[00:22:48] S1: big revenge of KPMG. [00:22:51] S0: That's a good one. Or trying to like somehow survey like workloads that are running on data centers, maybe like, you know, put compute thresholds on certain workloads, but like that stuff has been tried in the past and it's like very difficult to monitor. [00:23:04] S1: Yeah, especially when one thinks about the international part of the prisoner's dilemma, right, especially US versus China. [00:23:12] S0: Yeah. So like this part of the report, like I don't have like the definitive answer but I've tried to do my best to present the different perspectives on things and then let people conclude with their with their own data. But I find it's... If we extend this towards like, you know, this nimbyism debate, which we predicted in the last year's report of, you know, most people would not wanna, you you know, live next to a data center and then this would start to become a politically important component to midterms. [00:23:37] S1: Yeah. That was a resoundingly correct prediction. Right? [00:23:42] S0: Yeah. Yeah. Yeah. It seems so Where more and more states have tried to implement a moratorium or have done so or established new criteria by which grid connections can happen. Like, for example, you know, data centers would have to figure out and bring their own power on-site or they would have to make certain investments in the communities that they want to build in.
00:23:42 · Nathan Benaich, Matt Turck
[00:23:42] S0: Yeah. Yeah. Yeah. It seems so Where more and more states have tried to implement a moratorium or have done so or established new criteria by which grid connections can happen. Like, for example, you know, data centers would have to figure out and bring their own power on-site or they would have to make certain investments in the communities that they want to build in. [00:24:03] S1: Yeah. And while you added, so maybe just go into this a bit more, explain what the current state of things. Obviously, we all know that there is opposition to data center construction, but, like, any color, you can add. [00:24:15] S0: Yeah. Well, there's there's... They're like projects, I think, worth about $50,000,000,000 that are currently stalled, through a variety of these these reasons. Like Texas, Pennsylvania have been ones that have generally, like, paused paused new data center connections. There's a there's a stat on polling of, like, American American people where individuals would prefer to live next to a nuclear power plant than live next to a data center, which is quite wild to think of. [00:24:44] S1: And what what do you think that is by the way? Is that lack of understandingeducation? Is that just terrible PR
00:24:44 · Matt Turck, Nathan Benaich
[00:24:44] S1: And what what do you think that is by the way? Is that lack of understandingeducation? Is that just terrible PR [00:24:55] S0: Yeah. I think it's kind like everything because, you know, there... There's like public narratives that data centers consume tons of water and that your water bill will go up. But realistically, like, data center is kind of more like a closed, like, swimming pool. Like, you fill it once and then the water is, like, constantly, like, recycled in there, so it doesn't actually consume that much once it's filled. Then there's, you know, points around, hey, your energy bill will go up. But that's also kind of inconclusive because certain facilities like consume grid, other ones are off grid. So there's around noise. I think that's, like probably uniformly true that these things are really noisy and like droney and like pretty horrible. There's, you know, others around like job creation or job loss. I think that's that's a little bit like tough to read, but in general... Generally speaking, there's been we see a rise in like the need for like HVAC engineers of construction staff, like operating heavy equipment and like actually doing the nuts and bolts of building the building. [00:25:56] S1: You had a number somewhere that was actually very high. It was like 300,000. [00:26:01] S0: New jobs. [00:26:01] S1: New jobs.
00:26:02 · Nathan Benaich
[00:26:02] S0: Okay. Nimbism is not restricted to The United States. They had this also in Korea and South Korea where, you know, it's a country that has, you know, seen like a massive explosion of, like, share price and, like, wealth basically for employees of SK Hynix and and Samsung, you know, create the high bandwidth memory that GPUs need for these, mega scale data centers. And, you know, the the people who participated in this, you know, very happy. Right? Like, your stock price went up and your options are... You know, went up and you got a cash bonus and that's driving increase in real estate prices in Seoul. You know, they wanna create more data centers, but also people are not so happy with that for similar reasons than in The US. In in Europe, there's... I guess, like, I don't really see that problem as much because there's just, no compute capacity to speak of. Like, we have some some data in the in the report where, like, the total, like, number or the estimated number of, like, h 100 equivalents in all, like, 27 European countries is, like, 80,000 cards, which is less than like every single one of the top five GPU clusters in The US. And, you know, while US hyperscalers are spending like 730,000,000,000 in 2026, like Europe committed like single digit billions pretty much. And then energy costs are really bad. If you're not Finland or Norway, where the parrot... Where you're kind of at parity with The US and with China, which has, like, the best the best energy price, Other European countries are just significantly more expensive. Like, The UK is one of the most expensive energy prices out of those, like, developing economies. And there's no, like, good capacity. Yeah. You had some
00:27:46 · Matt Turck, Nathan Benaich
[00:27:46] S1: good good good stats where it costs per kilowatt hour in Finland is $0.085, in The US 0.086, but the most expensive costs is actually in The UK at $0.373 per kilowatt hour and China is at 0.109. [00:28:11] S0: Yeah. And then most recently, think there's you know, a big deal with Microsoft and Nscale that got pulled or at least Microsoft pulled out of it because the data center provider couldn't get the energy connection in time. [00:28:23] S1: Great, so that's nimbyism and data centers. So just following your thread while we are at it talking about Europe versus The US and China. Any reason for Europe to be optimistic? You're based in The UK for for anybody that doesn't know and invest globally, but in particular in Europe. So what's your current take?