This transcript is generated with the help of AI and is lightly edited for clarity.
REID:
I am Reid Hoffman.
ARIA:
And I’m Aria Finger.
REID:
We want to know what happens if, in the future, everything breaks humanity’s way.
ARIA:
Typically, we ask our guests for their outlook on the best possible future, but now every other week, I get to ask Reid for his take.
REID:
This is Possible.
ARIA:
Reid, great to chat with you today. We are going to talk a lot about energy. So when people are talking about AI, they often talk about sort of the global arms race between the U.S. and China, and other players involved as well. But there’s also a geopolitical energy arms race. So recently, a report from Anthropic: They highlighted that China added 400 gigawatts of electricity in 2024 while the U.S. added only a few dozen. And the E.U. is now spending 250 billion plus on liquid national gas and fossil import, but they’re relying on China to source their solar and their battery tech. It seems like China is just light-years ahead of the U.S. when it actually comes to energy. So my question for you is like, in this energy arms race, how is the U.S. keeping up, and do you think that this energy availability is gonna be sort of a new access in this geopolitical fight?
REID:
Well, the very quick answer is the U.S. is doing a lousy job of keeping up. And while this is a definite criticism of the current administration, it’s also a criticism of the former administration. And it already is the line of sight. We know this is going to be the new axis of AI geopolitics. It’s one of the reasons why there’s so many discussions in the Middle East. It’s one of the things that I’m hopeful for. It’s the kind of thing that if the current administration was keeping its premise of being more business and AI forward, it would be driving on, versus, for example, sending Marines into Los Angeles—choice of things or trying to destroy American science and universities.
REID:
But I’m hopeful that they’ll get there. Now, the other thing that is the side thing is, are we doing the regulatory permitting, capital allocations, enabling the companies to do the capital allocations, the building of it, the resources we’re building, the availability of different locations, et cetera, et cetera. All of which are part of raw, what the U.S. needs to be doing across the entire front—is like, “How do you essentially blitzscale on every single of these vectors and more?” But one of the problems with the general, like, “Cause friction with Canada,” is my backup plan had always been, go cut a deal with the Canadians because they have tons of hydro, clean energy, also oil, and say, “Here’s our business development deal that we can do with you.” But of course, just reading the news, what it seems to be is we’re mostly just trying to irritate them. I’ve never seen the Canadians so [pissed] off with anyone as they are with us. And that’s, of course, because treating them with disrespect and engaging in tariff wars is not a good way to keep friendships.
ARIA:
Well, I mean, I just saw last week, I think they said that Germany, for a day, had negative energy prices. Like everywhere, lots of our partners, or former potentially allies, are shooting forward in solar, wind, et cetera. And if we alienate them, obviously, we can’t rely on them. But, so what happens then? In addition to energy, everyone is spending huge sums on this AI infrastructure. I think Meta raised their guidance to $70 billion this year on AI infrastructure. We are building data centers. And so if we can’t build these data centers, if we can’t get the land, if we can’t get the energy, does AI then stall? How big of a risk is this in terms of getting to AGI and AI accomplishing the goals we want it to?
REID:
Well, the what is getting the AGI—as you know—is a complicated can. So that’s an entirely different question to itself. Mostly because people mean different things with it, as you know. But, look, the refresher is what’s going on with AI is scale compute to learning systems, with scale data and scale talent. And part of the scale compute is, it needs data centers and it needs energy. And even when you improve efficiency of algorithms, even when you get algorithms through AI at the edge, even when you get better neuro architectures—neurally-inspired architectures—you can do all that stuff, you’re still going to need as much scale in compute as you can get, which means data centers and energy. So it is fundamental. Now, it may be that you go, “Hey, we’ve done all these algorithmics and invention in such ways that we don’t lose out entirely based on inability to deliver energy, inability to deliver data centers.”
REID:
And one of the, I think, treasures we have as a country is that many of the most significant investing hyperscalers—including Meta, but also, obviously, Google, Microsoft, OpenAI, and others—are all, like, massively driving this on a private ecosystem basis. But of course, are running into a whole set of the traditional, think of it as the—Abundance was focused on consumer prices in terms of regulatory, and kind of saying, “Hey, look, we should be cheaper on regulation for house building. We should be cheaper on regulation for other kinds of things, so that we can accomplish the social goods.” We have the same issues around data centers, around energy provisioning, et cetera. Even though we have a ton of private capital that is willing to do this, let alone anything else that can happen. And so you just got to solve the problem. And like I said, my backup was if we couldn’t get out of our own way and enable it in the U.S.—which we continue to seem not to be able to do, although I remain hopeful—my backup was, always, go to Canada, and now I think the Canadians are not so happy with us. So we need different backups.
ARIA:
I mean, I couldn’t agree more. It’s the “abundance” mindset. It’s, “How do we reduce regulation in so many of these situations?” Reducing environmental review for things that are solar farms or wind farms is a no-brainer because we need to create this renewable energy. And of course, we’re also still relying on non-renewable energy, and that’s just a fact of where we are. But a lot of people would say that these data centers are actually what’s causing some of the environmental problems. So, specifically, I’m looking at a report, it was saying that xAI had a site in Memphis, and they had 35 methane gas turbines without proper air permits. They were releasing harmful pollutants—nitrogen oxides, and formaldehydes—into the surrounding community, which happened to be historically black community. They’re already burdened by high asthma rates, and now they’re also being burdened by this additional environmental harm.
ARIA:
I read just this week that places where there was a Microsoft data center, people were going to have to limit their showers because Microsoft needed more water. So I’m not trying to pick on xAI, I’m not trying to pick on Microsoft either. This is just the reality in some places where there are data centers. The costs are borne by the local people. What do you say when people say, “Well, this isn’t a trade-off we’re willing to make. These big tech companies are putting these data centers in, and it’s the local people that are feeling the environmental effects.”
REID:
Well, the very first thing is obviously local people should be able to determine, “You got to make it worth my while, whatever I’m going to do,” right? So if you’re going to do stuff that is gonna have massive health and environmental impact on me, you can’t do it unless I buy into it and know what I’m buying into. Now that being said, I think most of the hyperscalers, including Microsoft, are pretty committed to doing the right thing by both, generally, the environment and their local communities. And so, they’ve been doing tons of pre-purchase orders on green energy fusion, and geothermal, and other kinds of things as ways of making this happen. They’re very focused on, “How do you make sure that you don’t have pollutants?” They’re also very focused on, “How do you hire people from local community? Park these in places where communities can get economic boost from these.”
REID:
Now, I am happy to pick on xAI because I don’t think they care about any of this stuff, unlike the other hyperscalers. But I think that’s an important thing to do. Now that being said, I think Microsoft, Google, and others have demonstrated that you can build energy, and you can build these data centers, at speed, with a green focus, with all of these things. It’s some more intelligence and some more work in order to do that, but that’s obviously worth doing it. Because if you said, doesn’t make a huge difference of X gigawatts month one, month six, month 12. It’s like, “Look, it’s always better to be closer,” but it’s better to be month nine—now, not month 50—but month nine versus month one. And to ameliorate all the health impacts.
REID:
If you said you can’t do that, you immediately need to do it, then you have to figure out other solutions. But those solutions are there. Capitalism and invention does solve this most often. It’s one of the things that I find most frustrating in talking to a lot of the climate change people. It’s like, “Look, I think fundamentally, much more than legal permitting, I think what you want is invention in technology and geoengineering for what kind of stuff you need to do.” And that’s what we should be focused on getting. And the regulatory should be incentivizing that versus trying to be overly predictive to the whole thing.
ARIA:
So, Reid, I couldn’t agree more. If there are bad actors who are polluting their local community, breaking the law, they should not be doing that. We’ve seen—especially Microsoft, Google—these companies do want to be good corporate citizens. We want people wanting AI, and we want people believing in these companies, and they’re trying to do the right thing as they’re building it. I think a lot of people just see the negative side. They say, “Oh, these data centers and these companies are using electricity, they’re using water, they’re bad for climate.” But you would argue that, “No, no, no, the only way we are going to solve this climate change issue, which we actually believe is real, is with AI.” So make the bull case to the environmentalists who might be listening, who are like, “Ah, Reid, you just don’t care about the environment.” What’s the bull case for AI actually being the solution?
REID:
Well, two-part answer. One is, I don’t think AI is the only answer, but I think AI is a positive solution versus a detriment. I will get to that. And then second, I think that technology is the answer to climate change. That basically, when you look at what is the climate change problem is, the more and more hundreds of millions of people that we have joining the lifestyle of what is considered to be middle-class today, that involves new buildings, new cars—even if you go, “Well, we’re doing electric cars.” Well, electric cars also come with a carbon footprint relative to batteries, manufacturer, et cetera, et cetera. And so you go, “Okay, what is the solution?” The solution is better technologies. There’s no ways to limit it without technologies. And included in those technologies are things like, for example, carbon capture, which is too expensive right now relative to the amount of clean energy you’d have to do.
REID:
But if you make the carbon capture cleaner and you make clean green energy plentiful, you can also capture carbon. So it’s a technological solution, and frankly, everyone who cares about it should be trying to take the moonshots of this. Yes, we should have a cord. Yes, we should try to limit the temperature. Yes, we should do things, but that’s not the solution. That is simply a delay. And so the solution is technology. And part of that solution, for example—one of the things that generally is considered to be too questionable by most people—is geoengineering. And so, geoengineering we should be experimenting with today. Doesn’t mean we should go whole hog into it, but experiment and understand. Like if we put some sulfur in the upper atmosphere to try to bring down cooling. If we do a little bit, what happens?
REID:
It can’t be that that’s like the same thing as an asteroid hitting the world, right? So like, well, fine, now we go, “Oh, doesn’t really work. Change weather patterns too much, et cetera, et cetera.” Okay, you stop doing it. All the sulfur falls out of the atmosphere within a year. Do these experiments. And so I think solving climate change is fundamentally about technology. And we should be doing technology, technology, technology. Now, number two, is you get to AI. And it’s an easy criticism that a lot of people say, “Oh, look, it’s got an exponential energy demand curve.” Even though data centers are only, call it seven percent of first world energy output today, and only ten or 15% of that might be charitably thought of as AI, but it’s going to be going up at a huge rate—we just talked about the gigawatts. And you go, “Well, okay, is that just going to put a huge burden on the system?” Well, the answer is the whole point of AI is intelligence per watt. And when you begin to get intelligence per watt, you can also apply that intelligence per watt on a whole number of climate change issues. Now, this isn’t pie-in-the-sky science fiction; it’ll be inventing fusion. You know, if we’re in that universe, that’s a very interesting universe to be in. But not intrinsically that. But it’s the “Hey, let’s analyze our grid and make the grid a lot better. Let’s make all of our appliances a lot smarter. Let’s be intelligent about HVAC. Let’s be intelligent about washing machines. Let’s be intelligent about power regulation and monitoring to be much greener and much more efficient across the whole thing.”
REID:
The whole point of intelligence is to be more efficient on those things. So it’s not very good intelligence if it can’t do that. And it’s only going to get to scale—we’re only going to be spending massive gigawatts on it—if it is good intelligence. So that should be a solvable cycle, and that’s the kind of thing we need to be doing. And it’s one of the reasons why I tend to think that the electricity environment critique of AI tends to be very misplaced from a, “I don’t understand how intelligence can be a help to solve the climate change problem.”
ARIA:
Well, and also just to reinforce your point, we do see, like the U.K., through new technologies and more efficiency, they’re reducing their carbon output to the lowest in a hundred years. And so technology, to your point, is the only way out of this, especially if we actually want other people to bring into the global middle-class. So appreciate it, Reid. Thank you as always.
REID:
Always a pleasure.
REID:
Possible is produced by Wonder Media Network. It’s hosted by Aria Finger and me, Reid Hoffman. Our showrunner is Shaun Young. Possible is produced by Katie Sanders, Edie Allard, Thanasi Dilos, Sara Schleede, Vanessa Handy, Alyia Yates, Paloma Moreno Jimenez, and Melia Agudelo. Jenny Kaplan is our executive producer and editor.
ARIA:
Special thanks to Surya Yalamanchili, Saida Sapieva, Ian Alas, Greg Beato, Parth Patil, and Ben Relles.