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Energy and infrastructure are key to AI’s future

Energy and infrastructure are key to AI’s future

Energy and infrastructure are key to AI’s future
Aerial view of a data center owned by Google in Santiago, Chile. (AFP)
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At the heart of the artificial intelligence surge is infrastructure. Rapid advances in AI are driving a record-breaking demand for data centers. But a shortage of reliable power is becoming a major bottleneck, sparking a global wave of investment in both energy and digital infrastructure.

Today, AI is increasingly seen not as a passing trend, but as a new essential utility — just like electricity or the internet.

Private markets are riding this wave of optimism. AI-related deals now make up about 3 percent of all transactions, but a hefty 15 percent of total capital invested.

At the same time, venture capitalists are pouring money into AI application platforms at a dizzying pace, showing early signs of a possible investment bubble. Funding for AI platforms has soared to 10 times previous levels, with valuations running five times higher than typical venture capital investments.

For these AI companies, the median funding multiple is about 25 times revenue — and for the top performers, it is as high as 40 times. These eye-watering figures reflect strong expectations for future growth and profits.

Large technology firms have also become ever more intertwined with the global economy, now representing about $15 trillion, or about 15 percent of global gross domestic product.

If momentum continues, this figure could grow to $35 trillion — or even $50 trillion if AI’s influence continues to expand, accounting for about 35 percent of global GDP.

Supporting all this growth requires massive infrastructure expansion. During the original internet boom, the US built about 2 gigawatts of data center capacity over 16 years. In the cloud computing era, this rose to 6 gigawatts.

While the opportunities in AI are huge, building the power and infrastructure needed to support it will be one of the world’s greatest challenges.

Lina Tayara

Today, thanks to AI, the US is adding between 2 to 7 gigawatts of capacity every year — half of it driven by hyperscale companies.

The Middle East, meanwhile, is perfectly placed to capitalize on the AI era, thanks to its affordable, abundant energy.

Global investment firm KKR recently announced a $5 billion investment in Gulf Data Hub, a UAE-based data center company, with 300 megawatts of new capacity aimed at boosting AI growth across the GCC — including a major expansion in ֱ, unveiled at LEAP.

AI’s hunger for computing power is also fueling massive investments in graphics processing units.

Over the past six to eight years, the size of processor clusters used for AI model training has exploded by 20 to 40 times, leading to the rise of enormous “giga campuses” with up to 1 million processors.

But with all this expansion, two big questions loom. Can the flow of capital keep up? And can infrastructure projects scale fast enough?

KKR points to two global megatrends that could shape the future: An estimated $100 trillion needed for infrastructure investment over the next 15 years, and another $200 trillion required to achieve global net-zero emissions by 2050.

The bottom line: While the opportunities in AI are huge, building the power and infrastructure needed to support it will be one of the world’s greatest challenges.

Lina Tayara is a consultant in the digital infrastructure industry driving business development, market research and thought leadership on her platform Let’s Talk Tech.
 

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view

Ronaldo announces Al-Nassr chapter ‘over’

Updated 2 min 46 sec ago

Ronaldo announces Al-Nassr chapter ‘over’

Ronaldo announces Al-Nassr chapter ‘over’

PARIS: Portugal icon Cristiano Ronaldo indicated on Monday that he could leave Al-Nassr after declaring that a “chapter is over” hours after the Saudi Pro League finished.
Ronaldo, 40, joined Al-Nassr in 2022 from Manchester United and his contract in ֱ ends this summer.
A special transfer window runs from June 1-10 to allow the 32 clubs involved in the Club World Cup to sign players.
“This chapter is over,” Ronaldo cryptically said on social media with a photo of him in an Al-Nassr shirt.
“The story? Still being written.
“Grateful to all,” the former Real Madrid and Juventus attacker added.
He posted the message shortly after Al-Nasser lost 3-2 to Al-Fateh in the last game of the season, finishing third.
Al-Nassr missed out on the Asian Champions League Elite, losing to Japan’s Kawasaki Frontale in April’s semifinals and were third in the Saudi Pro League.
Ronaldo ended as the league’s top goal scorer on 24.
Last year, the five-time Ballon d’Or winner said he could end his career wit Al-Nassr.


Brazilian leader Lula hospitalized with inner ear ailment, then released

Brazilian leader Lula hospitalized with inner ear ailment, then released
Updated 45 min 17 sec ago

Brazilian leader Lula hospitalized with inner ear ailment, then released

Brazilian leader Lula hospitalized with inner ear ailment, then released
  • The health scare adds to Lula’s recent medical worries, which are also part of his allies’ concerns ahead of his likely bid for reelection next year

RIO DE JANEIRO: Brazil’s President Luiz Inácio Lula da Silva was diagnosed with labyrinthitis Monday after suffering from vertigo, hospital officials said. The 79-year-old leftist leader has already returned to the country’s presidential residence, where he is resting.
The Sirio-Libanes Hospital said in a statement that Lula underwent imaging and blood tests, and its results came within normal limits. Labyrinthitis is an inflammation of the labyrinth in the inner ear, which is responsible for hearing and balance.
The health scare adds to Lula’s recent medical worries, which are also part of his allies’ concerns ahead of his likely bid for reelection next year.
The most serious is a fall he had in the bathroom of the presidential residence in Brasília on Oct. 19. Almost two months later, he was transferred to São Paulo for surgery after suffering headaches caused by new a bleeding in his head. He was discharged Dec. 15.

 


Canadians welcome King Charles after Trump takeover threats

Canadians welcome King Charles after Trump takeover threats
Updated 27 May 2025

Canadians welcome King Charles after Trump takeover threats

Canadians welcome King Charles after Trump takeover threats
  • The so-called throne speech outlining the government’s priorities is typically given by the British monarch’s representative in Canada, the governor general

OTTAWA: King Charles III was given an enthusiastic welcome on Monday by Canadians who turned out in droves to see their monarch on his historic visit to open parliament, as part of the pushback against US President Donald Trump’s annexation threats.
The 76-year-old king, who is Canada’s head of state as part of the Commonwealth, was greeted at the airport by Prime Minister Mark Carney, who has invited him to give an address opening Canada’s new legislature on Tuesday.
“This historic honor matches the weight of our times,” Carney said.
On their first stop in the Canadian capital, the royals visited a farmer’s market, where they were cheered by thousands of Canadians. The king also dropped the puck for a street hockey game.
The so-called throne speech outlining the government’s priorities is typically given by the British monarch’s representative in Canada, the governor general.
Queen Elizabeth II, the king’s late mother, delivered a throne speech in Canada just twice during her long reign, in 1957 and 1977.
Charles, making his first visit to Canada since his coronation, has never commented on Trump’s repeated talk of making Canada the 51st US state.
But he will be closely watched for any comments on Canada’s sovereignty, and on trade.
Trump has slapped tariffs on Canadian goods including sector-specific levies on autos, steel and aluminum, rattling the Canadian economy, although he has suspended some of them pending negotiations.
Queen Camilla is accompanying Charles on the 24-hour visit to Ottawa.
Carney has said his newly-elected government has been given a mandate “to define a new economic and security relationship with the United States,” a neighbor he believes Canada “can no longer trust.”
He has promised to curb reliance on trade with the United States by boosting internal commerce while forging deeper economic ties with allies overseas.
The government’s path to build up Canada and create new relationships will be outlined in Charles’s speech, Carney said Monday.
A government statement described the visit as “a momentous and historic occasion that underscores Canada’s identity and sovereignty as a constitutional monarchy.”
Trump repeatedly returned to his annexation musings during Carney’s Oval Office visit earlier this month, insisting it would be a “wonderful marriage.”
Carney stood his ground, saying Canada was “never for sale.”
Trump’s envoy to Canada, Ambassador Pete Hoekstra, dismissed the notion that inviting Charles to open parliament was an effective way to make a statement on annexation. According to him, the annexation issue is “over.”
But, among the throngs that showed up to welcome the royals, Robert Brown, 64, said: “I think it’s a very subtle form of diplomacy. A good one.”
After Charles and Camilla landed in Ottawa in the afternoon, they were received by Governor General Mary Simon and other dignitaries before meeting community organizations.
They also planted a tree at the governor general’s estate, and Charles held audiences with Carney and Indigenous leaders.
At the Senate on Tuesday, the monarch will receive full military honors before delivering the throne speech.
Noah Marshall told AFP he couldn’t miss this “once in a lifetime opportunity to come see the royals.” The 24-year-old also noted that because Trump seems to respect the King, “that’s a good kind of signal to him.”
Gaelle Hortop, 46, said she is “optimistic that it’ll be positive for Canadian morale” too.


Boko Haram’s resurgence: Why Nigeria’s military is struggling to hold the line

Boko Haram’s resurgence: Why Nigeria’s military is struggling to hold the line
Updated 27 May 2025

Boko Haram’s resurgence: Why Nigeria’s military is struggling to hold the line

Boko Haram’s resurgence: Why Nigeria’s military is struggling to hold the line

ABUJA, Nigeria: A resurgence of Boko Haram attacks is shaking Nigeria’s northeast, as Islamic extremists have repeatedly overrun military outposts, mined roads with bombs and raided civilian communities since the start of the year, raising fears of a possible return to peak Boko Haram-era insecurity despite the military’s claims of successes.
Boko Haram, Nigeria’s homegrown jihadis, took up arms in 2009 to fight Western education and impose their radical version of Islamic law. The conflict has spilled into Nigeria’s northern neighbors and resulted in the death of around 35,000 civilians and the displacement of more than 2 million others, according to the United Nations.
In the latest attack last week in the village of Gajibo in Borno state, the epicenter of the crisis, extremists killed nine members of a local militia that supports the Nigerian military, after soldiers deserted the base when becoming aware of the insurgents’ advance, according to the group’s claim and local aid workers. That is in addition to roadside bombs and deadly attacks on villages in recent months.
Nyelni Kwari’s area of Borno, Hawul, includes some of the affected villages, and returning home has become unsafe. “Unfortunately, the situation hasn’t improved for me to feel secure,” said Kwari, a graduate student in Borno’s capital, Maiduguri.

Two factions

Boko Haram has split into two factions over the years.
One is backed by the Daesh group and is known as the Islamic State West Africa Province, or ISWAP. It has become notorious for targeting military positions and has overrun the military on at least 15 occasions this year, killing soldiers and stealing weapons, according to an Associated Press count, experts and security reports.
In May, ISWAP struck outposts in Gajibo, Buni Gari, Marte, Izge and Rann and launched an assault on the Nigeria-Cameroon joint base in Wulgo and Soueram in Cameroon. Other attacks this year have hit Malam Fatori, Goniri, Sabon Gari, Wajiroko and Monguno, among others. The group often attacks at night.
The other faction, Jama’atu Ahlis Sunna Lidda’awati wal-Jihad, or JAS, has increasingly resorted to attacking civilians and perceived collaborators, and thrives on robberies and abductions for ransom.

Expansion and decentralization

Malik Samuel, senior researcher at nonprofit Good Governance Africa, said ISWAP’s success is a result of its territorial expansion following gains against rival JAS as well as a decentralized structure that has enhanced its ability to conduct “coordinated, near-simultaneous attacks across different regions.”
“The unpredictability of attacks under this framework illustrates ISWAP’s growing strategic sophistication,” Samuel said.
External support from IS in Iraq and Syria is also a critical resource, said Samuel, who has interviewed ex-fighters. Such support is evident in ISWAP’s evolving tactics, including nighttime raids, rapid assaults with light but effective weaponry and the use of modified commercial drones to drop explosives, Samuel said.

Outgunned and outnumbered military

Ali Abani, a local nonprofit worker familiar with military operations in Borno’s strategic town of Dikwa, said army bases are understaffed and located in remote areas, making them vulnerable to attacks.
“When these gunmen come, they just overpower the soldiers,” Abani said.
Reinforcements, in the form of air support or nearby ground troops, are often too slow to arrive, allowing militants time to strip the outposts of weapons needed to bolster their arsenal, he added, recalling a May 12 attack during which soldiers fled as they were outnumbered, leaving the extremists to cart away weaponry.
There also have been reports of former militants who continued to work as informants and logistics handlers after claiming to have repented.

Nigeria losing ground ‘almost on a daily basis’

At its peak in 2013 and 2014, Boko Haram gained global notoriety after kidnapping 276 Chibok schoolgirls and controlling an area the size of Belgium.
While it has lost much of that territory because of military campaigns, the new surge in Boko Haram attacks has raised fears about a possible return to the gloomy past.
Borno Gov. Babagana Zulum warned recently of lost gains after raising concerns that military formations in the state are being dislodged “almost on a daily basis without confrontation.”
Federal lawmakers highlight the extremists’ growing sophistication and advanced weaponry, calling on the government to bolster military capabilities.
The Nigerian military didn’t respond to a request for comment.
Last Friday, senior commanders visited one troubled area, Gamboru on the border with Cameroon, promising the deployment of more troops to combat Boko Haram.


EU ‘fully committed’ to reaching US trade deal: commissioner

EU ‘fully committed’ to reaching US trade deal: commissioner
Updated 27 May 2025

EU ‘fully committed’ to reaching US trade deal: commissioner

EU ‘fully committed’ to reaching US trade deal: commissioner
  • Trump has called for eliminating the EU’s surplus in goods trade with the United States

BRUSSELS, Belgium: The European Union remains “fully committed” to reaching a trade agreement with the United States, the bloc’s trade commissioner Maros Sefcovic said Monday following calls with top US officials.
The contacts come after US President Donald Trump threatened Friday, but then postponed, to hit EU goods with a huge tariff, voicing frustration that talks with the EU were “going nowhere.”
Sefcovic said in a post on X that he had “good calls” with US Secretary of Commerce Howard Lutnick and US Trade Representative Jamieson Greer.
“We continue to stay in constant contact,” he added.
Trump has called for eliminating the EU’s surplus in goods trade with the United States.
On Friday, he threatened to impose 50-percent tariffs on the bloc from June 1, sending markets into a tailspin.
The US president had already hit the bloc with multiple waves of tariffs, including 25-percent duties on cars, steel and aluminum.
The European Commission has been leading talks on behalf of the 27-country bloc in search of a mutually beneficial deal with Washington — though with little to show so far.
But Trump agreed Sunday to delay the heftier levies on the EU until July 9 after a phone call with EU chief Ursula von der Leyen.
While the dollar remained under pressure Monday, European markets rallied over news of the delayed tariffs.
“The stock market seems to dance to Trump’s tune: first a threat, then a pullback, quickly followed by a rebound as speculative investors anticipate a concession from the US president,” said Jochen Stanzl, chief market analyst at CMC Markets trading platform.
European Central Bank President Christine Lagarde on Monday criticized Trump’s “terrible language” about the European Union, in response to his comments that the bloc was formed to “screw” the United States.
“It’s against history. And it’s certainly not the purpose of this region,” she said, urging negotiations on a deal.
The EU remains subject to a 10-percent tariff that Trump imposed last month on imports from nearly every country around the world.
Brussels is consulting with member states on plans to impose tariffs on US goods worth nearly 100 billion euros ($113 billion) if negotiations fail to produce a deal.
The US trade deficit in goods with the European Union was $236 billion in 2024.
But when taking account of services, where US firms are dominant, the European Commission calculates that the overall US trade deficit stood at $57 billion.
Sefcovic has said that the European Union could cover that figure by buying US liquefied natuaral gas and some farm products.