The US Needs a Better Energy Grid to Win the AI Arms Race

Stephen Kines, Chief Operations Officer, Goldilock

October 23, 2024

5 Min Read

Source: Jochen Tack via Alamy Stock Photo

COMMENTARY

Artificial intelligence (AI) technology has become virtually inescapable, and its growth has kickstarted a worldwide AI arms race. But where the US was once at the forefront, it’s quickly losing ground to countries like China, because its energy grid cannot support the breakneck pace of innovation. To remain a global AI leader, the federal government needs to make the grid more secure and resilient by addressing three compounding issues.

Growing Energy Demands

First, data center electricity consumption is expected to triple, from 2.5% of the US total in 2022 to 7.5% by 2030. That’s equivalent to the energy consumption of one-third of all US homes. We need to squeeze more power generation out of the energy grid, or it won’t be able to meet the demand of AI. At the same time, the US must show the world that this can be done sustainably as it continues working toward its net-zero goals.

Acknowledging this necessity, executives from OpenAI, Nvidia, Anthropic, and Google met at the White House recently for a Roundtable on US Leadership in AI Infrastructure. Following the gathering, the administration announced several new actions to accelerate public-private collaboration, including plans to launch a new Task Force on AI Data Center Infrastructure to coordinate policy across government.

Time will tell if these efforts help achieve the energy usage and data center capacity required by AI. In the meantime, there are other challenges to consider.

Utilities Are the New Frontlines of the Cyber War

Countries like Russia, China, and Iran have a long history of infiltrating US businesses to steal proprietary technology and data. Today, critical infrastructure has become a primary target for cyberattacks by nation-states engaged in geopolitical conflict, and the impact this can have on the ability of the US to prevail in the AI arms race is huge.

I’ve seen the chaos critical infrastructure attacks can cause firsthand through my participation in NATO’s Defense Innovation Accelerator for the North Atlantic (DIANA), which is aiming to “provide companies with the resources, networks, and guidance to develop deep technologies to solve critical defense and security challenges.” Energy is at the top of its agenda and was highlighted as one of three challenges in 2023.

Rogan Shimmin, challenge manager at DIANA, calls attention to the fact that “these threats are compounded by a significant lack of cyber literacy in the energy sector, which is leading to continued investment in insecure legacy infrastructure and is scaring industry players away from adopting proper security measures.”

Growing Threat of Climate Change and Severe Weather

Malicious actors and adversaries aren’t the only players who can compromise networks. Severe weather and the heightened energy demand that often results during these instances can also take down networks, as we saw during the 2021 Texas grid collapse. Plus, there’s the ongoing possibility of another solar flare knocking out grids, like this year’s auroral storms.

If we continue with business as usual, our energy grids will remain vulnerable to both physical and cyberattacks at any time. As we saw with SolarWinds and the Colonial Pipeline attack, the damage can be catastrophic, not just impacting energy supply but putting the US’s position on the world stage at risk.

Assessing Recent Federal Efforts for Energy Resiliency

Fortunately, the federal government recognizes that energy resilience is a priority and has taken measures to support this. Announced in May, the Federal Energy Regulatory Commission’s (FERC’s) Order No. 1920 outlines a smart grid approach that’s a crucial step in addressing long-term transmission planning needs. However, its passage has been hamstrung by political debate in an election year when action is urgently needed.

In the same vein, the White House launched a Federal-State Modern Grid Deployment Initiative with commitments from 21 leading states. The goal is to bring states together with federal entities and power sector stakeholders in support of modern grid technologies to enable next-level capacity and throughput. The initiative was launched in tandem with the US Climate Alliance’s announcement of “policy, technical, and analytical assistance to help participating members advance state-level efforts to carry out these commitments.”

Is This Enough? Not Really

These regulations and state-by-state initiatives are a step in the right direction, but they fall short. As the Modern Grid Deployment Initiative alludes, the US must address its energy demands through a level of smart controls, mainly via dynamic line rating (DLR) systems using intelligent sensors and more widely geographically distributed networks. This technology is fundamental to getting more out of networks, and it should be applied to water and other core sectors as well. However, it requires crossing state lines, which is a political hot potato.

The US must also reduce its attack surface. While DLR and other modern grid technologies can be revolutionary, they exponentially increase the threat of cyberattacks and create new vectors for malicious actors. We have to develop these technologies with a security-first mindset to give utilities a way to stop attacks in their tracks before they can spread, and get back online quickly through better backup and disaster recovery solutions.

James Appathurai, acting assistant secretary general for innovation, hybrid, and cyber at NATO, argues the ability to disconnect is one of the main security lessons from the Russia-Ukraine war. Upon Russia’s first invasion, Ukraine prioritized improving its cyber resilience by building in air gaps through physical network segmentation so its critical infrastructure could be disconnected from the Internet at critical moments. "[The Internet of Things] is great, connecting to the Internet for efficiency is great, but you absolutely must build in the worst-case scenario. Being able to run if you are cyberattacked — to air gap, to run on island mode — is very important."

The federal government needs to acknowledge this urgency and implement regulations that will ensure a more resilient and secure electrical grid. We must push past the partisan divide, as the longer we avoid reform, the further behind we’ll fall in AI innovation, and the more vulnerable we’ll be.

About the Author

Chief Operations Officer, Goldilock

Stephen Kines is the chief operations officer (COO) and co-founder of Goldilock. He served in the Canadian military and currently represents Goldilock in NATO on the DIANA program. Stephen is also an international corporate lawyer who has been a general counsel for international law firms, as well as ultra-high net worth individuals and families. His expertise is in technology transactions with a positive-ESG impact.