Digital Economy Weekly - September 1, 2024

Story of the Week

There's Hope in the Developing World

To paraphrase the famous Tolstoy line, “all developed nations are alike, each developing nation is developing in its own way.”?

Indeed, anyone who's done work in the developing world will attest that despite similarities in income and underdeveloped infrastructure, each developing nation faces a unique set of circumstances that can enable or impede progress.

We were reminded of this in a story in last week's Digital Economy Weekly to a story about a new data center that just opened in the Democratic Republic of Congo (known as Zaire at one time) in Central Africa. The new facility will consume 1.5MW when fully operational and accommodate as many as 400 racks.?

This would hardly be a noteworthy item in the developed world, nor in many developing nations. But it is big news in the Democratic Republic of the Congo, one of the largest and least-developed nations in the world.?

A Silver, Sustainable Lining

According to the IDCA Digital Readiness Index, the nation ranks near the bottom in its economy, social structures, and governance. It has a highly serious, ongoing civil conflict in its eastern regions, a nasty business involving neighboring nations and separated from its capital city of Kinshasa by 1,300 miles (where the new data center has opened).?

A small silver lining can be found in the country's ability to produce all of its electricity from renewable energy; its lack of economic development also means it produces minimal CO2 emissions, across the vastness of a nation that's larger than Mexico and about the size of all of Western Europe. The country's people survive on 2% of the electricity per person found in the EU. Even that low level, though, is in line with other, more prominent African nations such as Senegal, Tanzania, and Kenya.?

That said, the Democratic Republic's renewable grid elevates its overall Digital Readiness score to the 37% of world nations, ahead of less-impoverished nations such as Pakistan and Indonesia. So there is hope in Central Africa.?

Meanwhile, a news link in this week's edition notes another modest facility in an under-developed place, a 240K facility in the north of Brazil. The Wakanda dream can be found in the Democratic Republic of the Congo, along with similar dreams in distinctly unique countries throughout the world.?

Links of the Week

For Nvidia, It's Hard to Be the King

Nvidia's most recent financial results exceeded expectations, but its stock dropped the nonetheless, as concerns about maintaining market share and momentum crept into the investor mindset. Read here.

Key Intel Board Member Leaves

Lip-Bu Tan, who is Executive Chairman of chip-design software leader Cadence Design Systems, has resigned his role as an Intel board member because of what he sees as a bloated workforce, risk aversion, and lagging AI-chip competitiveness. Read here.

AI Developers in China Using Nvidia Chips, One Way or Another

A new Wall Street Journal report finds that AI developers in China are getting their hands on Nvidia chips that have been banned from being exported from the US to China. Brokers are involved, allegedly masking their identities sometimes through techniques learned in the cryptocurrency world. Another wrinkle was found with a recent shipment sent to Brisbane, Australia, which started operating for a Beijing-based business, according to the report.?Read here.

Australian Fund Invests in European Infrastructure Firm

“To tap into the AI boom” was the expressed reason for Australian pension fund Aware Super to invest in London-based EuNetworks, which has deep fiber networks across Europe, connecting more than 500 data centers.?Read here.

TSA Acquiring More CT Machines at $1 Mil Each

This item is less about technology than the agony of flying in the US. For those readers who travel and have become TSA fans, you can rest well knowing the agency will spend $1.3 billion for about 1,300 large CT machines to ensure the 3-1-1 rule will be in place until at least 2042. Read here.

Brazilian Telco Puts 240KW Data Center Online in the North

Manaus, Amazonia, in the relatively underdeveloped north of Brazil, is the site for a new data center launched by Grupo ClickIP. As noted in an IDCA country report in a previous issue of Digital Economy Weekly, there is a dramatic difference of around 40% in the relative wealth and development of Brazil's southern metro centers (e.g., S?o? Paulo and Rio de Janeiro), and its Amazonian north.?

The new facility encompasses 1,200 square meters, including 685 square meters of floor space and the ability to accommodate 49 racks.?Read here.

Elon?Musk is a “Threat to International Peace”

It's easy enough to find reports of Elon Musks's current battles with the governments of Brazil, the UK, and the EU. His recent, loosely structured conversation with Donald Trump has also drawn a lot of attention. He seems to embrace comment and criticism, to the point he is now being called “intolerable,” “a world threat” and other unflattering things by numerous commentators. As head of Tesla, one of the so-called Magnificent Seven, his activities remain quite consequential. Read here.

Meta to Build New Data Center in South Carolina

Meta (Facebook), which a couple of years ago invested more than $500 million in a new data center in DeKalb County, Illinois, near the outskirts of the Chicago area, is now investing as much as $800 million in a new data center project in Aiken County, South Carolina, across the state line from Augusta, Georgia. The location also has some proximity the capital city of Columbia, SC, as well as Charleston, SC and Savannah, GA. Read here.

“Alexa, Meet Claude. Claude, Meet Alexa”

Alexa is slated by Amazon for a major update to be released in October, and will henceforth be “powered primarily by Anthropic's Claude,” according to a breaking report from Reuters. The new version will be billed as the “Remarkable” version and be billed at $5 to $10 monthly.?Read here.

Heard in the Industry

“Amsterdam is still a top-tier market...but it’s about to drop to number four (in Europe) because Paris will soon grow to a greater size. The original moratorium (in 2019) really knocked the wind out of Amsterdam’s sails.”? - Andrew Jay, head of data center solutions, CBRE

Heard in the Aisle

“Artificial Intelligence is not just a change agent for data centers; it's a transformative force that turns them into highly intelligent, efficient, and sustainable infrastructures. Integrating AI into data centers opens the door to automated operations, improved data management, and substantial energy savings.” - Mark Minevich, General Partner Going Global Ventures and AI Counsel, IDCA.

Country Close-up: Morocco, Tunisia, and Algeria

The government and people of Morocco are working steadily to make their country a key digital hub in North Africa. Neighboring Tunisia is pursuing the same goal, and neighboring Algeria is showing some potential as well.?

These nations all face towards the EU, and have the potential to benefit from internet traffic flows that connect directly to Spain and France. Submarine optical cables are in place in all three countries; it's worthy to note that they compete in this area with two residual autonomous cities of Spain (Ceuta and Melilla ) that are located on the African continent.?

Although none of the three nations are among the top data center hubs in the EMEA region or Africa, there is at least one ambitious plan afoot: a startup with founders in the US and the UK, Iozera.ai, has announced a massive, multi-hundred-MW development plan for the north of Morocco, to be known as Eureka Park. Plans reportedly call for a multi-phase hub to be built in increments as large as 75MW. The Taiwanese electronics company Pegatron is also involved with this idea.

Digital Readiness in Morocco and Tunisia

Morocco and Tunisia each score slightly below the world average in the IDCA Digital Readiness Index of Nations. The world average score overall is 46 (on a 0-100) scale, with Morocco and Tunisia coming in at 43 and 41, respectively. Both have relatively strong economies, but are brought down by sub-par Environment scores, particularly in Tunisia's case.

The world average shows 30% of electricity being produced by sustainable energy. Morocco's sustainable grid, though, stands at around 20% and Tunisia produces only about 3% of its electricity fro sustainable resources.?

Another major component of the IDCA Sustainability score measures the amount of CO2 produced per US$1M of GDP – this measures economic efficiency and is a far superior way to look at emissions than a simple look at per capita emissions.?

The world average for this component is 400 tons per $1M. The US comes in at 225, for example, with China at around 600 and India around 800. Morocco is slightly worse than the world average, at 485, where Tunisia comes in at almost 700. Clearly there is a big opportunity for investors in improving this situation in both countries.

And in Algeria

Algeria scores less well than the other two, with an overall score of 36. Algeria's economy is not strong, and has barely started the process of developing sustainable energy. A silver lining in these clouds reflects a relatively efficient economic production of CO2 so far, so anyone wishing to focus aggressively on developing the Algerian economy would not encounter a highly polluting existing infrastructure.?

Overall

With a tilt toward Europe and some nascent interest in the region, it's well-advised to watch Morocco, Tunisia, and Algeria closely, and think of them as part of a regional hub rather than three countries that must necessarily compete with one another.

Inside IDCA

AI on the Webinar Docket, Thursday, September 5

World-renowned AI researcher and consultant Mark Minevich will have a one-on-one conversation about AI with IDCA Chief of Research Roger Strukhoff in a webinar on Thursday, September 5, from 11am-noon eastern time. Mark also serves as IDCA's AI Counsel, and will discuss the entire range of ways AI can enable organizations. Attendance is free, and participants will be surveyed throughout the webinar to hear their challenges, concerns, and opinions. Register here.