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‘AI revolution’ to boost demand for fossil fuels

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Fossil fuel companies argue that rising demand for electricity to power data centres and the ‘artificial intelligence revolution’ will usher in a ‘golden age’ for gas.

According to the Financial Times (FT), executives argue that AI’s growing energy needs will far outstrip what renewables and batteries can provide, making fossil fuels more important even as governments pledge to reduce their use.

“It’s not going to happen without gas,” Toby Rice, CEO of EQT, the largest US gas producer, said of the coming AI boom. Rice said the tech sector would provide a boom for shale gas producers similar to the US liquefied natural gas (LNG) industry, which has boomed in recent years, giving drillers new customers for their products.

“We have a really great emerging market in LNG. But there’s another emerging market that people are just as excited about, and that’s the demand for electricity,” Rice said.

Gas essential to big tech’s AI push

The US government has offered huge incentives to clean energy developers in a bid to rapidly decarbonise the power grid. But fossil fuel executives argue that renewables alone cannot be a reliable supplier for energy-hungry data centres.

Energy Capital Partners (ECP), a large private investor with green and fossil fuel energy assets, says the expansion of gas-fired power generation will be critical in supporting renewable supplies to data centres.

“Gas is the only cost-effective generation that can provide the kind of reliable, 24/7 power that big tech companies need to support the explosion in artificial intelligence,” said Doug Kimmelman, founder and partner at ECP.

“Intermittent renewables won’t cut it,” says Colin Gruending, vice-president of pipeline group Enbridge, adding that this bodes well for gas consumption.

Data centres add to energy hunger

As cloud storage, crypto mining and artificial intelligence take over the grid, the energy needs of data centres will increase. Microsoft alone opens a new data centre every three days around the world.

According to S&P Global Commodity Insights, these energy-intensive operations will consume more than 480 terawatt-hours of electricity by 2035, almost a tenth of the total electricity demand in the US.

The International Energy Agency estimates that global data centre electricity demand could reach 1,000 TWh by 2026. This is double the 2022 level and an increase equivalent to the total electricity demand of Germany.

Dominion Energy, which serves Virginia’s fast-growing data centre sector, said in a recent strategic plan that natural gas plants will be the “most affordable and reliable” option until zero-carbon energy provides continuous power.

Gas-fired generation accounts for more than 40 per cent of US electricity demand, far more than any other fuel, and cheap shale resources have eliminated dirtier coal’s share of generation over the past decade. According to federal projections, 20 more natural gas-fired power plants are expected to come online in 2024 and 2025 to meet demand.

The manufacturers’ plan to capitalise on Big Tech’s energy needs comes at a time when companies such as Google and Microsoft have set ambitious goals to power their operations entirely with certified green electricity in the coming years.

AMERICA

Elon Musk and Vivek Ramaswamy spar with MAGA over high-skilled immigration

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The first major debate between influential figures of the new US administration and Trump’s ‘Make America Great Again’ (MAGA) movement erupted over the contentious issue of skilled labor migration.

Among the priorities of Elon Musk and other Silicon Valley billionaires is facilitating the migration of skilled migrant workers to the U.S. With Silicon Valley’s growing influence on Trump and the Republican Party, preliminary discussions in Congress have begun. Republican members are openly considering new plans to increase the number of high-tech immigrants.

However, this week’s heated online exchanges suggest immigration hardliners will not easily capitulate to Trump’s new tech allies.

On Sunday, President-elect Trump appointed Sriram Krishnan, a former partner at venture capital firm Andreessen Horowitz, as an adviser on artificial intelligence. The move triggered panic among Trump’s base, many of whom are concerned about Krishnan’s previous advocacy for lifting green card restrictions for highly skilled workers.

Laura Loomer, a prominent anti-immigration advocates close to Trump, criticized Krishnan’s appointment, calling it “deeply troubling.” She accused tech leaders of cozying up to Trump to “enrich themselves” and secure Pentagon contracts.

Elon Musk and David Sacks, another venture capitalist appointed as Trump’s AI and crypto czar, defended Krishnan against MAGA critics. Musk argued on X (formerly Twitter) that there is a “persistent shortage of excellent engineering talent” in the U.S., warning that America risks losing its competitive edge without more highly skilled immigrants. “The number of super talented engineers AND super motivated people in the U.S. is too low,” Musk emphasized.

Vivek Ramaswamy echoed Musk’s concerns, suggesting the lack of competitive American engineers is partly a cultural issue. Writing on X, he argued that American culture has long glorified “mediocrity over excellence,” citing societal preferences for athletes over valedictorians or math champions.

“The reason top tech companies hire foreign-born engineers isn’t an innate lack of American IQ but a cultural problem,” Ramaswamy stated. He expressed hope that a Trump presidency would usher in an era valuing “hard work over laziness.”

Conservative tech leaders, including Joe Lonsdale, co-founder of Palantir Technologies, defended Krishnan’s appointment. Lonsdale endorsed a merit-based approach to immigration, stating, “For the U.S. to have the highest standard of living and the strongest military, we need to hire the best and brightest.”

David Sacks also supported Krishnan, clarifying that his proposals focus on lifting per-country green card caps rather than making the program unlimited. “Sriram supports a limited number of highly skilled immigrants based on merit—a common view on the right,” Sacks noted.

Republican lawmakers, including Jay Obernolte, co-chair of the House Artificial Intelligence Task Force, suggested that every PhD in STEM fields from U.S. universities should come with a green card. “This is an issue Congress should address,” Obernolte stated, adding that more foreign technologists are essential for competing with China in artificial intelligence.

However, conservative groups, including the Federation for American Immigration Reform, warned that tech lobbyists expecting leniency on visas “are in for a big surprise.”

The debate over high-skilled immigration highlights a growing divide within the Republican Party. While some remain staunchly opposed to immigration reforms, others, influenced by Musk and other tech billionaires, are open to expanding H-1B visas and green cards to secure America’s competitive edge.

Tech industry leaders view this as a unique opportunity to reshape the debate on immigration policy. As John Neuffer, CEO of the Semiconductor Industry Association, remarked, “Musk and Silicon Valley leaders could restart the discussion productively.”

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Trump renews interest in Greenland following Panama controversy

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Former U.S. President Donald Trump has reignited discussions about Greenland’s strategic importance, sparking strong reactions from Denmark and Greenland’s leadership. On Sunday, Trump announced his nomination of former Swedish ambassador Ken Howery as U.S. ambassador to Copenhagen. During this announcement, he reiterated Greenland’s significance, labeling its “ownership and control” as critical for U.S. national security and global freedom.

Trump took to Truth Social, stating, “The United States considers the ownership and control of Greenland to be an absolute necessity for the purposes of National Security and Freedom around the World.”

Trump’s remarks were met with immediate backlash in Denmark and Greenland. Rasmus Jarlov, a member of Denmark’s opposition Conservative Party, emphasized on X (formerly Twitter) that Greenland’s sovereignty is non-negotiable.

“To the extent that U.S. activities aim to take control of Danish territory, this must be prohibited and resisted. Then they cannot be there at all,” Jarlov asserted.

Greenland’s Prime Minister, Mute Egede, echoed this sentiment on Monday, stating unequivocally, “Greenland is ours. We are not for sale and we will never be for sale. We must not lose our long struggle for freedom.”

Greenland, an Arctic island rich in minerals, oil, and natural gas, has long been of strategic interest to global powers. Despite its natural resource potential, its economy remains heavily reliant on fishing and annual subsidies from Denmark. The Pituffik Air Base, located in Greenland, plays a critical role in the U.S. ballistic missile early warning system and is positioned along the shortest route from Europe to North America, further underlining its military value.

While Greenland is an autonomous territory of Denmark, it has the right to declare independence under its 2009 Self-Government Act. Despite this, the island’s population of roughly 56,000 has so far opted to remain part of the Danish Kingdom, relying on Copenhagen for substantial financial support.

This isn’t Trump’s first foray into Greenland-related controversies. In 2019, during his presidency, he proposed purchasing Greenland. Denmark and Greenland’s leadership rejected the suggestion outright, with then-Danish Prime Minister Mette Frederiksen calling the proposal “absurd.” Trump responded by canceling a planned visit to Copenhagen, labeling Frederiksen’s reaction “outrageous.” Frederiksen remains Denmark’s Prime Minister to this day.

Greenland, while a part of the Kingdom of Denmark for over 600 years, does not fall under European Union jurisdiction, despite Denmark’s EU membership since 1973. Its unique position in the Arctic continues to make it a focal point for geopolitical and strategic interests.

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Silicon Valley giants form consortium to compete for U.S. defense contracts

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Two of the largest U.S. defense technology companies, Palantir and Anduril, are in discussions with several firms to create a consortium aimed at bidding for U.S. government contracts. This initiative seeks to disrupt the long-standing dominance of the nation’s “prime contractor oligopoly.”

The consortium is expected to officially announce in January that agreements have been reached with a variety of technology groups. Companies reportedly in talks to join include Elon Musk’s SpaceX, OpenAI (creator of ChatGPT), autonomous shipbuilder Saronic, and artificial intelligence data group Scale AI, according to sources familiar with the matter who spoke to The Financial Times (FT).

“We are working together to build the next generation of defense companies,” stated one individual involved in forming the group.

This move underscores the growing ambition of technology firms to claim a larger share of the U.S. government’s $850 billion defense budget, traditionally dominated by contractors like Lockheed Martin, Raytheon, and Boeing.

The consortium will unite some of Silicon Valley’s most innovative and valuable companies, leveraging their technologies to offer the government more efficient, cutting-edge solutions for defense and weapons systems. A second source described the collaboration as a way to modernize defense capabilities through advancements in artificial intelligence, automation, and software.

Defense technology startups have attracted record funding in 2023, fueled by increased federal spending on national security, immigration, and space exploration. This trend reflects rising geopolitical tensions involving the U.S., China, and conflicts in Ukraine and the Middle East. These dynamics have bolstered government confidence in advanced AI for military applications, further enticing investors into the sector.

Palantir, founded by tech investor Peter Thiel, has seen its share price soar by 300% over the past year, giving the company a market value of $169 billion—surpassing even Lockheed Martin. Anduril, founded in 2017 with Thiel’s backing, reached a valuation of $14 billion this year. Similarly, SpaceX was valued at $350 billion in December, making it the world’s largest private startup. OpenAI has climbed to a valuation of $157 billion since its inception in 2015.

While SpaceX and Palantir have a long history of securing public contracts, newer entrants like OpenAI are adapting their policies to enter the defense sector. OpenAI recently revised its terms of service, removing restrictions on the use of its AI tools for military purposes.

U.S. defense procurement has faced criticism for being anti-competitive and favoring a few entrenched firms producing large-scale systems like tanks, ships, and aircraft. These systems often require years to design and manufacture, with high associated costs.

In contrast, Silicon Valley’s emerging defense sector emphasizes smaller, more affordable autonomous weapons systems, which proponents argue are better suited to modern warfare.

One source described the consortium as a strategic alignment of industry players to address the Department of Defense’s (DoD) technical priorities and resolve critical software capability gaps.

According to the FT, agreements among participating companies are already underway, with integration efforts to begin immediately. Recent collaborations include the integration of Palantir’s AI Platform, a cloud-based data processing tool, with Anduril’s autonomous software Lattice for national security applications.

Anduril and OpenAI have also partnered on U.S. government contracts, combining Anduril’s anti-drone defense systems with OpenAI’s advanced AI models to counter aerial threats.

“We aim to provide the U.S. Department of Defense and the intelligence community with access to the most advanced, effective, and secure AI-driven technologies available in the world,” Anduril and OpenAI said in a joint statement.

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