Australia may be good at innovation and invention (think wi-fi and over-the-horizon radar, along with a host of medical breakthroughs and advances), but as a nation we don't have a great track record in attracting investment to fund those brilliant ventures.
uncertain
we → think → ventures
Traditionally they've headed offshore.
asserted
they → head → ?
Amidst the wreckage of last week's failed mega capital-raising by data centre provider Firmus Technologies was a creeping sense that, once again, we had somehow fallen short.
asserted
we → fail → Technologies
Big investors, including both domestic super funds and global hedge funds, baulked at the price and deemed the entire venture too risky.
asserted
venture → include → price
This is a company still in its infancy that churns through capital and racks up losses, big on promises and short on detail, demanding to be valued at $44 billion.
asserted
that → churn → billion
Or perhaps they were thrown by the sudden decision to alter course in the days preceding the sales process, abandoning a multi-billion-dollar joint venture with an Australian data centre group to focus instead on Asian expansion.
asserted
they → throw → expansion
While there has been an endless stream of words churned out about the criminal record of one of the founders, a far more important issue loomed large.
asserted
issue → churn → founders
Both Oliver Curtis and his partner Tim Rosenfield have barely any history in technology, precious little experience in data centres and are novices when it comes to the daunting task of running a multinational public company.
asserted
it → have → company
The biggest selling point for the float was that some of the world's biggest investors, including American giant Blackstone, and industry titans like Nvidia, were on board, delivering credibility to the Australian-born Firmus.
asserted
some → include → Firmus
That begs the question: was the Firmus float collapse a sign that the AI investment bubble is running short of fuel?
asserted
bubble → beg → fuel
Data centre backlash will delay AI earnings boom
asserted
backlash → delay → boom
Maybe Elon Musk shares some responsibility.
asserted
Musk → share → responsibility
Just 16 weeks ago, his SpaceX conglomerate — a mix of AI, robotics and ah, social media — soared into the history books with the world's biggest Initial Public Offering.
asserted
conglomerate → soar → Offering
It raised an eye-watering $US85.7 billion, valuing the company at more than $US2 trillion on day one and catapulting Musk into rarefied territory as the world's first trillionaire.
asserted
It → raise → trillionaire
Like Firmus it burns cash.
asserted
it → burn → cash
Like Firmus it is fuelled by hype and vague promises about the future, including outlandish plans to build data centres in space.
asserted
it → fuel → space
As fanciful as Musk's ambitions seem he may have hit upon something important.
uncertain
he → seem → something
For across the developed world a huge backlash is growing for data centre construction.
asserted
backlash → develop → construction
He should be able to avoid that problem on Mars, or even the Moon.
asserted
He → avoid → Mars
Across the United States, disgruntled residents are marshalling communities to halt the rapid roll-out of data centres, with one poll by Gallup finding that 71 per cent of Americans are opposed to the massive barns filled with high powered electronics.
asserted
cent → marshal → electronics
To put that into perspective, only 53 per cent are opposed to nuclear power plants.
asserted
cent → put → plants
A similar trend is sweeping across Europe with more than 70 data centres rejected or restricted so far this year.
asserted
centres → sweep → Europe
Meanwhile, here in Australia, the data centre revolution is being put the test in capital cities across the nation.
asserted
revolution → put → nation
Huge amounts of power and vast amounts of water are required to keep these massive sheds perennially humming.
asserted
amounts → require → sheds
You could dismiss it as NIMBYs (not in my backyard) selfishly grumbling about the future while they demand ever more sophisticated technology.
But the opposition places a unexpected roadblock in the way of the AI rollout.
uncertain
opposition → dismiss → rollout
That's something the tech bros, and their supporting army of investment bankers, never took into account as they hyped a boom that has been driving global investment markets now for four straight years.
asserted
that → support → years
The big tech corporations at the heart of the artificial intelligence boom have been driven to stratospheric valuations underpinned by perfect execution, that nothing could go wrong.
uncertain
nothing → drive → execution
Generally, such booms either start from a position of weakness, such as the eight-year winning streak to 2016 after the global financial crisis, or end in market crashes such as the 1987 crash and the dot-com collapse in 1999.
asserted
booms → start → 1999
The pandemic may have rudely interrupted this boom as tech stocks were powering the pre-pandemic market to new records.
uncertain
stocks → interrupt → records
But the AI revolution has sent a handful of already seriously overvalued stocks to new heights, making it one of the most unevenly balanced stock booms in history.
asserted
it → send → history
Not everyone agrees that this is a bubble.
asserted
this → agree → ?
Supporters point to the rapid growth in earnings from the technology giants.
asserted
Supporters → point → giants
What isn't in dispute is that the race for technological dominance has been undertaken at breakneck speed.
asserted
race → undertake → speed
But getting it to the customers may not be as easy.
uncertain
getting → get → customers
While the technology is being developed unhindered in labs and basements within Silicon Valley and beyond, the task of delivering it to the masses involves winning over communities while navigating a host of local, state and national government rules that could sideline projects for years.
uncertain
that → develop → years
You can build the world's best locomotive and carriages.
asserted
You → build → locomotive
But without the tracks you ain't going nowhere.
asserted
you → go → tracks
Loading'An existential risk to humanity'
Has there ever been a boom like this, where the leaders continually warn of a potential calamity from their own endeavours?
asserted
leaders → warn → endeavours
Anthropic's Dario Amodei, in particular, has been on the parapet urging caution, even as his models plunder databases in other countries like the recent hack of our very own Medicare.
asserted
models → urge → Medicare
OpenAI's Sam Altman has been equally cautious about the technology's application but, unlike Amodei, he doesn't quite see the need to slow the pace of AI development.
asserted
he → see → development
…and 9 more, not listed.
The Aporia
