According to the “Hyperscale Data Centers – Global Strategic Business Report”, the global market for hyperscale data centers is estimated to reach US$730.2 Billion by 2030, growing at a CAGR of 23.1% from 2023 to 2030. From the increasing adoption of cloud services to the rise of big data and artificial intelligence, several factors are at play when it comes to its rapid growth. As per the report, the biggest driver is cloud computing, with more and more companies migrating their workloads to the cloud to reduce costs, improve scalability, and enhance flexibility.
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These hyperscalers need a lot of energy to run their data centers around the clock. According to McKinsey & Company, data center power needs are expected to grow three times higher than the current capacity by the end of the decade, from between 3 and 4 percent of total US power demand today to between 11 and 12 percent in 2030. Naturally, the power sector has become a significant AI player. Several technology companies are looking at nuclear power, including the use of small modular reactors (SMR), to meet their electricity needs.
“Driven by recent trends in AI development, projected power consumption by data centers in the U.S. is expected to increase in the range from 8% to 17% by 2030—or potentially even higher, as progress in AI technologies is not linear but exponential, as seen in Silicon Valley today”.
-Energy expert Maksim Sonin
Recent AI News
As the demand for advanced computing power grows, the latest AI breakthroughs are reshaping industries and driving innovation at an unprecedented pace. Then again, nothing is perfect. A few days back, OpenAI’s premier chatbot, ChatGPT, went down for a total of 30 minutes. According to an outage tracking website Downdetector, over 19,000 people were impacted due to the chatbot’s unavailability. Sam Altman, the CEO, admitted to the outage on X and apologized.
The same company is said to be hitting stumbling blocks recently. That’s because, according to Bloomberg, its latest model Orion hasn’t been performing as well as the developers had hoped for. OpenAI, however, isn’t the only company seemingly facing a plateau. Three leading AI companies are now seeing diminishing returns from their costly efforts to build newer models.
In other news, search habits are changing across the globe now that artificial intelligence is here. According to research from Yext, a digital presence platform for multi-location brands, 45% of customers are likely to use and trust an AI tool for finding more information about a brand, while 51% now use social media, and 28% turn to voice assistants.
“Google impressions have dropped 8-20% in the past two years, pushing marketers to adapt as search behaviour shifts with AI-driven overviews, chatbots and social media searches. Instagram and TikTok have become favoured alternative search engines, particularly for younger consumers”.
– Anthony Rinaldi, senior director of insights at Yext.
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10. SoundHound AI (NASDAQ:SOUN)
Market Capitalization: $2.71 billion
SoundHound AI (NASDAQ:SOUN) is an independent voice AI platform offering voice AI solutions to businesses. The company boasts more than 200 enterprise brands employing its AI agents across a growing number of verticals.
On Tuesday, November 12, SoundHound AI (NASDAQ:SOUN) CEO and Co-Founder Keyvan Mohajer said during the company’s quarterly earnings call that its voice artificial intelligence (AI) solutions have been signed by seven out of the top 20 quick-service restaurants (QSR). Several of them are already live with the company’s phone and drive-thru AI solutions. QSRs and restaurants have been using these solutions for drive-thru, kiosks, phone ordering, mobile apps, and more. A few days ago, the company reported that its AI phone ordering technology had marked a milestone, processing more than 100 million interactions with restaurant customers, meaning that they were all handled exclusively by artificial intelligence.
9. Bloom Energy Corporation (NYSE:BE)
Market Capitalization: $3.08 billion
Bloom Energy Corporation (NYSE:BE) is a renewable energy company that offers solid oxide fuel cells that convert natural gas, biogas, and hydrogen into electricity without combustion, resulting in low CO2 emissions. The company’s fuel cell technology powers AI data centers.
On November 12, Wells Fargo analyst Michael Blum maintained a “Hold” rating on Bloom Energy Corporation (NYSE:BE) with a price target of $14.00. The hold rating comes amid the company falling short of expectations in its third quarter. Even though new commercial agreements have improved short-term outlook, there are risks associated with the timing of financing and customer orders. Moreover, despite the potential that comes from the data center market, there is a lack of clarity on specific details on such opportunities that are causing ambiguity. That said, the company has secured large-scale project deals, but there is uncertainty about its ability to finalize them.