South Africa’s well-documented energy supply constraints and the looming threat of water scarcity demand accelerated solutions.
This, as artificial intelligence (AI) advancement is anticipated to put more pressure on these natural resources, said Haim Israel, Bank of America global strategist and head of global thematic research.
Israel was speaking during a Bank of America webinar, detailing insights into research conducted on the impact and growth of AI, how to power AI in an energy-constrained world, as well as what it means for some of the developments on the African continent.
Presenting the use cases on the impact of AI and what it means for technology evolution, Israel explained that key natural resources are needed as AI takes off. The increased data centres, processing power and training models will require more energy, natural resources, fibre and water, he explained.
“The pressure on water reservoirs will increase because all the data centres required will need cooling systems. We will see more demand for semi-conductors, which are huge consumers of water worldwide.
“All of this together puts more constraints on our resources across the board – energy, natural resources, water, manpower, etc.
“We’ll need more capacity and we’ll need it fast because the revolution is happening so much faster than before. This capacity will come from a lot of sources, but we believe it will mainly come from renewables, because these are scalable, fast and cheaper. Hydrogen will also help to some extent. Nuclear is a long-term solution, as it will not answer the need today.
Efficiency is another requirement, he noted. “The electricity networks and grids all over the world are inefficient. Some were built centuries ago, with traditional designs and old materials, so we’ll have to change that a lot. To increase the efficiency of the networks, we’ll likely see these investments happening soon, adding the extra supply back to the grid.”
Ahead of the AI game
According to the GSM Association, South Africa, which has robust compute capabilities, data centres, and a vibrant research and development ecosystem, stands out as a regional leader in AI.
Described as a water-scarce country, SA’s water infrastructure suffers from poor management and inadequate maintenance, limited investment and inefficient monitoring systems. For example, the country’s economic hub Gauteng reportedly suffers water losses of around 46% due to failing infrastructure.
Discussing how SA can respond to energy and water scarcity in the age of advancing AI, Israel said the country has an advantage. “Rightly so, SA already faces those crises – both in energy and in water.
“I live in a country that faced a massive water crisis. In the 1990s, Israel did not have fresh water at all and had to start importing water into the country.
“It’s unfortunate that only when there is a crisis do investments start. The problem with generative AI is that the crisis is going to come so much faster. I think a lot of the estimates of the European Union will have to be updated as to how much energy and water will be consumed because of the IT sector.
“We know that because of the AI revolution, we’ll need so many more data centres. According to statistics, if all the data centres in the world were a country, they would consume more energy than Japan by 2026. The thing is that countries that have already identified this in advance, will start acting today.
“This is why I believe SA has an advantage, because the country already faces these scarcity issues and a lot of investments to solve these challenges have already started. It’s going to have to accelerate fast and the solutions will come from technology solutions.”
Complete transformation
According to Israel, the Bank of America’s global research team believes AI is about to change everything, becoming bigger than the internet and smartphone revolution.
Globally, most technology companies are making significant investments in AI, which is seen as a foundational technology for future innovation.
New research from IDC predicts that business spending to adopt AI, use AI in existing business operations and deliver better products/services to business and consumer customers will have a cumulative global economic impact of $19.9 trillion through 2030 and drive 3.5% of global gross domestic product in 2030.
AI is definitely going to change everything, Israel stated. “We are in a world of data, where technology is changing fast, accelerating all the time. Up until now, we didn’t use a lot of data – we created a lot of it, but we only used 1% of it, with 99% of global data not stored or used.”
Israel said AI adoption is going to be faster than that of the internet, resulting in the democratisation of data, mass adoption, warp-speed technological development and an abundance of use cases.
“The thing that has changed since ChatGPT and all the other large language models is that we can all use it. Now you don’t need to be a data scientist or have degrees in computers and so on; it’s an app on my phone. As a result, more and more people are going to start using it…they don’t need to understand algorithms or mathematics.
“Since the first three months of the ChatGPT launch, some 100 million users started using it. Currently, the number of people using generative AI across all the different models − Copilot, ChatGPT,Anthropic, Gemini and all the other models − are estimated in the hundreds of millions. Never has a technology been adopted as fast as generative AI.
“I can’t think of one industry, one company or any sector out there that will not start using generative AI and start benefitting from it.”
The discussion around AI’s impact on the job market has accelerated, with many worried about mass layoffs as a consequence of its progress.
Like many other global strategists, Israel stated that AI will create more jobs than those being eliminated.
“There will be a lot of jobs that could be replaced with AI – all those jobs that don’t require creativity. However, we anticipate so much value created, that new jobs will be added. Some jobs will be lost but more jobs will be created. The job market shows that AI will bring out the human part of us.
“In the future, we will need creativity, social skills and emotional intelligence. These are things that AI cannot provide and I think that jobs of the future will focus on that.”
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