Could Tech bros like Mike Cannon-Brookes become the new climate pariahs?

In September, Atlassian spent more than $2 billion on its largest acquisition to date to solidify the future of AI. If Atlassian is successful in driving AI adoption among its 300,000 customers, it will face the same dilemma as global AI hyperscalers like Amazon, Microsoft and Google: How do we reconcile AI’s increasing carbon footprint with a sustainable future?

These AI giants are already experiencing a major reversal in declining carbon burdens. And as rising AI spending shows, it’s still early days.

Emissions from Amazon, Facebook owner Meta, Google and Microsoft rose by an average of 150 percent between 2020 and 2023, thanks to the high energy demands of AI data centers, according to a report by the UN International Telecommunications Union. Remember, this was before the AI ​​boom.

In its latest sustainability report, Google said its 2030 net-zero emissions target is in jeopardy, noting “uncertainty around the future environmental impacts of AI that are complex and difficult to predict.”

In fact, it is not that difficult to predict the future environmental impact of artificial intelligence. While Amazon, Microsoft, Meta and Google are expected to spend more than $400 billion ($618 billion) on AI infrastructure in the next 12 months, this is not possible.

BloombergNEF predicts that data centers will account for 9 percent of energy demand in the United States by 2035. Data centers will be the fourth largest user of electricity globally, behind China, the US and India.

And that’s not including the vast pools of water needed to cool these data centers. As founder and CEO of $5 trillion Nvidia Jensen Huang recently said, one of the key obstacles to the future of AI is feeding its insatiable appetite for energy.

“AI is energy, it’s chips, it’s infrastructure, it’s AI models, it’s AI applications,” he told the US network. CNBC last month.

As the manufacturer of the processors that have enabled the explosive impact of AI to date, Huang and Nvidia are well positioned to understand the role of energy and why it is potentially the biggest hurdle.

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What we’re seeing in AI, he says, is a technology that requires “exponential amounts of computing” to serve customers creating “exponential demand.”

This is what is driving a surge in energy demand that mature economies like the US and Australia have not experienced in generations. In the USA, this situation is likened to the introduction of air conditioning in the 1960s.

The tech sector, including Atlassian, remains committed to powering data centers with green energy, but the slow pace of energy development means they can only do so in the medium term from a source that will decarbonise the grid.

Or in rare cases, bitcoin mining, as demonstrated by Sydney-based Iren Energy.

Nasdaq-listed Iren is up more than 1,000 percent this year after its move from Bitcoin to AI paid off this week with a multibillion-dollar data center deal with Microsoft.

A JPMorgan report says this energy issue should be addressed in the next wave of AI spending, which will move beyond the first wave focused on chips, servers and networking equipment.

“This next phase aims to support infrastructure such as power plants and grid improvements, which can take years to plan, permit and build. The first signs of this phase are emerging, but the full impact is likely to be ahead,” the firm said.

Hyperscalers are already considering investing in additional power, including nuclear and more environmentally efficient data centers. But this will take years.

Dutch financial giant Aegon Asset Management is among those who see natural gas as the only stopgap measure that can meet the needs of artificial intelligence.

“While renewables may play a larger role in the long term, natural gas remains the most viable solution in the short term to support the AI ​​revolution,” Aegon said in a report this month.

AI energy demand not only promises to increase carbon emissions, but is also eroding the promise of abundant green energy that reduces energy bills.

Apparently, this is already a major problem in the United States. BloombergIt reported that wholesale energy costs for areas near data centers have increased by as much as 260 percent compared to five years ago. These wholesale costs are passed on to local businesses and consumers.

And the situation will get worse.

Huang underlined the importance of US President Donald Trump’s “pro-energy growth” strategy for this multi-trillion-dollar artificial intelligence industry that sits above the energy layer.

This includes Trump’s plans to accelerate the connection of AI data centers to the power grid that serves consumers and businesses.

“If it weren’t for President Trump’s pro-energy policy, you could imagine the entire layer above the energy (layer) being restricted,” Huang said.

This may help explain why Grok Ventures, the private arm of Cannon-Brookes driving its eco agenda, remained particularly aggressive about AGL’s environmental targets at the energy group’s last AGM.

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Grok was one of the few investors to vote against AGL’s Climate Transition Action Plan.

“We express our view that more is needed in terms of targets, pace and action to give investors clarity and confidence about AGL’s path over the critical next half-decade,” Grok said after the AGM.

However, more meaningful news came from Grok’s major solar energy project, SunCable.

The initial plan was to generate electricity from a massive solar farm in the Northern Territory’s outback and literally send it via cable to Asia, displacing carbon-intensive power in the process.

But SunCable confirmed its focus is now on growing demand closer to home: data centres.

“There is a role for grid-connected data center assets,” says SunCable CEO Ryan Willemsen-Bell.

“SunCable can complement this with access to an off-grid supply that will reduce the impact on the delicate energy balance of the National Electricity Market. Collectively, this will strengthen Australia’s competitive position to meet the growing global demand for energy to power AI.”

Cannon-Brookes might argue that her personal and professional conflicts pale in comparison to billionaire environmental advocate and Bombardier Global 7500 owner Andrew Forrest.

An early supporter of SunCable, Forrest is trying to save the planet while making his fortune from shipping iron ore, which accounts for about 8 percent of global emissions. Despite the setbacks in the search for hydrogen as a green energy solution, Forrest remained as determined as ever at last week’s AGM.

“You’ve got an iron ore industry, ladies and gentlemen, and it’s going green,” he told investors.

Cannon-Brookes also remains committed to a green future. “My commitment to climate is as strong as ever. I’m still very focused on making an impact at scale, eliminating large amounts of emissions through active investments and philanthropy,” he said in a March LinkedIn post.

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