Tackling AI in Texas

October 3, 2024

We're closely following the issue of AI and emerging technologies and how the State of Texas is considering them, from the standpoint of policies and regulations, to their uses by public and private actors in Texas, to their integration into state agencies, the risks and benefits of AI and emerging technologies, plus how things like ethics, data privacy and cybersecurity factor in. We want to keep you updated on this fast-moving and complex issue, which is why we’ve created this newsletter – Tackling AI in Texas.

Below you’ll find info on the news driving the day on AI in Texas, plus recaps of events we attended and info on upcoming events we've got on our calendars.

1. ?? RECAP: House Select Committee on AI and Emerging?Technologies Hearing This Week + California’s AI Law

The House Select Committee on Artificial Intelligence and Emerging?Technologies, under the direction of Chairman Capriglione, met Tuesday in the?Capitol Extension for testimony on the following subjects:?

• Determine the impact of the application of artificial intelligence and?emerging technologies on various sectors of society, including transportation,?healthcare, licensed industries, and unlicensed industries.?
• Formulate recommendations for legislative, policy, regulatory, and remedial?actions needed to address the challenges and opportunities presented by?artificial intelligence and emerging technologies.?

The committee heard from unlicensed industries, licensed industries, transportation, and healthcare. For a full recap of the panels click here.

Why it matters: With the recent veto of a landmark AI regulations bill on Sunday by California Gov. Gavin Newsom, the spotlight now shifts to Texas, where lawmakers, led by Texas Rep. Giovanni Capriglione, are exploring how to regulate AI responsibly without hampering innovation.

The big picture: As Texas positions itself as a national leader in the tech sector, the state's ability to balance economic growth with responsible AI regulation will be critical.

2. ?? AI’s Power Surge: A Growing Concern

The surge in generative AI and GPU shipments has led to significant increases in data center electricity demand, with power consumption now viewed as a critical challenge.

Why it matters: New generations of AI accelerators from Nvidia, AMD, and Intel show a concerning trend of rising power consumption per chip. For instance, Nvidia’s H100 consumes up to 700W, while Intel's upcoming Gaudi 3 is expected to reach 900W. The exponential rise in electricity demand from AI accelerators is becoming a critical issue for data centers, impacting infrastructure and sustainability efforts.

• Nvidia's Blackwell series may consume up to 2,700W for advanced configuration, indicating a potential 300% increase in power consumption over just a few years.
• While it is important to note that each subsequent generation is likely to be more power-efficient than the last generation, GPUs are becoming more powerful in order to support trillion-plus large language models resulting in AI requiring more power consumption with each future generation of AI acceleration

By the numbers: Recent forecasts show AI’s power demand could surge by 5x over the next three years.

• Nvidia’s 3.76 million GPU shipments in 2023 could consume 14.38 TWh, equivalent to the annual power needs of 1.3 million US households.
• GPU power consumption is skyrocketing, with Nvidia’s H100 consuming 75% more power than its predecessor, the A100.
• Big Tech is expected to increase capital expenditures significantly in 2024, mainly for AI infrastructure, with estimates of around $200 billion.
• Morgan Stanley projects data center power use will triple from ~15 TWh in 2023 to ~46 TWh in 2024, and Wells Fargo projects a 550% increase by 2026.
• AMD’s MI300x and Intel’s Gaudi 3 accelerators are also seeing 50% increases in power consumption.

What’s next: As GPU shipments increase, the focus shifts to power efficiency. Companies like TSMC are addressing these challenges by developing more power-efficient chips, moving from 5nm to 3nm and eventually 2nm processes, which promise better performance and lower power consumption.

What they’re saying: “This AI race is going to go on for a long time. It's not a matter of getting ahead, just simply getting ahead in AI, but you also have to keep your model current. And that's going to take larger and larger data centers. — Oracle Chairman Larry Ellison

3. ? Dockworkers vs. Automation: A Brewing Conflict

Port operators and dockworkers are at odds over automation, threatening strikes that could disrupt international commerce.

Why it matters: Automation in ports is seen as a way to cut costs and limit labor disputes, but it threatens dockworkers’ jobs and livelihoods. As ports across the East and Gulf Coasts of the United States face potential strikes, the economic impact could be significant, affecting supply chains and consumer goods availability.

By the numbers:

• Dockworkers earn over $200,000 annually, factoring in overtime, handling dangerous and physically demanding work.
• The advent of container shipping in the 1950s reduced loading costs from $6 per ton to 16 cents, largely due to decreased labor needs.
• A potential strike at major ports could cost the economy $5 billion a day, impacting nearly half of the imports reaching the United States.
• Automation has already eliminated nearly 5% of jobs at key ports like Los Angeles and Long Beach, highlighting the tension between efficiency and employment.

The bottom line: As automation advances, dockworkers demand job protections and fair wages. The outcome of this conflict could reshape labor relations and port operations globally, influencing how technology is integrated into traditional industries.

?? What’s on our calendars…

• Join the Texas Higher Education Coordinating Board (THECB) Wednesday, October 30, 3:00 – 4:00 PM CDT for their “Become an AI Wizard: Unlock Generative Power for Content Creation and Student Engagement” event. More information can be found here.

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