Why AI Spending Isn't Going to Slow Down --- Soaring demand for reasoning models will consume electricity, microchips and data-center real estate for the foreseeable future

"Despite a brief period of investor doubt, money is pouring into artificial intelligence from big tech companies, national governments and venture capitalists at unprecedented levels. To understand why, it helps to appreciate the way that AI itself is changing.

The technology is shifting away from conventional large language models and toward reasoning models and AI agents.

Training conventional large language models -- the kind you've encountered in free versions of most AI chatbots -- requires vast amounts of power and computing time. But we're rapidly figuring out ways to reduce the amount of resources they need to run when a human calls on them.

Reasoning models, which are based on large language models, are different in that their actual operation consumes many times more resources, in terms of both microchips and electricity.

Since OpenAI previewed its first reasoning model, called o1, in September, AI companies have been rushing to release systems that can compete. This includes DeepSeek's R1, which rocked the AI world and the valuations of many tech and power companies at the beginning of this year, and Elon Musk's xAI, which just debuted its Grok 3 reasoning model.

DeepSeek caused a panic of sorts because it showed that an AI model could be trained for a fraction of the cost of other models, something that could cut demand for data centers and expensive advanced chips. But what DeepSeek really did was push the AI industry even harder toward resource-intensive reasoning models, meaning that computing infrastructure is still very much needed.

Owing to their enhanced capabilities, these reasoning systems will likely soon become the default way that people use AI for many tasks. OpenAI Chief Executive Sam Altman said the next major upgrade to his company's AI model will include advanced reasoning capabilities.

Why do reasoning models -- and the products they're a part of, like "deep research" tools and AI agents -- need so much more power? The answer lies in how they work.

AI reasoning models can easily use more than 100 times as much computing resources as conventional large language models, Nvidia's vice president of product management for AI, Kari Briski, wrote in a recent blog post. That multiplier comes from reasoning models spending minutes or even hours talking to themselves -- not all of which the user sees -- in a long "chain of thought." The amount of computing resources used by a model is proportional to the number of words generated, so a reasoning model that generates 100 times as many words to answer a question will use that much more electricity and other resources.

Things can get even more resource-intensive when reasoning models access the internet, as Google's, OpenAI's and Perplexity's "deep research" models do.

These demands for computing power are just the beginning. As a reflection of that, Google, Microsoft and Meta Platforms are collectively planning to spend at least $215 billion on capital expenditures -- much of that for AI data centers -- in 2025. That would represent a 45% increase in their capital spending from last year.

To demonstrate the projections of future AI demand, we can lay out a simple equation.

The first value in our equation is the amount of computing resources needed to process a single token of information in an AI like the one that powers ChatGPT.

In January, it appeared that the cost per token -- in both computing power and dollars -- would crash in the wake of the release of DeepSeek R1, the Chinese AI model. DeepSeek, with its accompanying paper, showed it was possible to both train and deliver AI in a way that was radically more efficient than the approaches previously disclosed by American AI labs.

On its face, this would seem to indicate that AI's future demand for computing power would be some fraction of its current amount -- say, a tenth, or even less. But the increase in demand from reasoning models when they are answering queries could more than make up for that.

To look at in the most simplistic way, if new, more efficient AI models based on the insights that went into DeepSeek slash demand for computing power for AI by a tenth, but reasoning models become the standard and increase demand for those models by a factor of 100, that's still a 10-fold increase in future demand for power for AI.

This is just the starting point. As businesses are discovering that the new AI models are more capable, they're calling on them more and more often. This is shifting demand for computing capacity from training models toward using them -- or what's called "inference" in the AI industry.

Tuhin Srivastava, CEO of Baseten, which provides AI computing resources to other companies, says that this swing toward inference is already well under way.

His customers consist of tech companies that use AI in their apps and services, such as Descript, which allows content creators to edit audio and video directly from a transcript of a recording, and PicnicHealth, a startup that processes medical records. Baseten's customers are finding that they need more AI processing power as demand for their own products rapidly grows, says Srivastava.

"For one customer, we brought their costs down probably 60% six months ago, and within three months, they were already consuming at a higher level than they were consuming initially," he adds.

All of the big AI labs at companies like OpenAI, Google and Meta are still trying to best one another by training ever-more-capable AI models. Whatever the cost, the prize is capturing as much of the still-nascent market for AI as possible.

"I think it's entirely possible that frontier labs need to keep pumping in staggering amounts of money in order to push the frontier forward," says Chris Taylor, CEO of Fractional AI, a San Francisco-based startup that helps other software companies build and integrate custom AIs. His company, like Baseten and many others in the blossoming AI ecosystem, relies on those cutting-edge models to deliver results for its own customers.

Over the next couple of years, new innovations and more AI-specific microchips could mean systems that deliver AI to end customers become 1,000 times more efficient than they are today, says Tomasz Tunguz, a venture capitalist and founder of Theory Ventures. The bet that investors and big tech companies are making, he adds, is that over the course of the coming decade, the amount of demand for AI models could go up by a factor of a trillion or more, thanks to reasoning models and rapid adoption.

"Every keystroke in your keyboard, or every phoneme you utter into a microphone, will be transcribed or manipulated by at least one AI," says Tunguz. And if that's the case, he adds, the AI market could soon be 1,000 times larger than it is today." [1]

1. EXCHANGE --- Keywords: Why AI Spending Isn't Going to Slow Down --- Soaring demand for reasoning models will consume electricity, microchips and data-center real estate for the foreseeable future. Mims, Christopher.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 Feb 2025: B2.

 

Savaitgalio interviu su Douglasu Murray: susipažinkite su Europos pilies laužu, pranešančiu apie priešo priartėjimą

 „Niujorkas – kai praėjusią savaitę viceprezidentas JD Vance'as niūriems Europos lyderiams Miunchene skaitė paskaitas apie „grėsmę iš vidaus“ ir „Europos traukimąsi nuo kai kurių svarbiausių jos vertybių“, jis galėjo cituoti britų eseistą Douglasą Murray'ų – ir beveik neabejotinai taip ir buvo.

 

 Duodamas interviu podcasteriui Joe Roganui prieš išrinkimą, ponas Vance'as atskleidė, kad skaitė „Keista Europos mirtis“ (2017 m.) – žinomiausią p. Murray knygą, kurioje teigiama, kad „Europa nusižudo“, derindama nekontroliuojamą imigraciją ir neapgalvotą krikščionybės principų atsisakymą.

 

 Savo prekės ženklo stiliumi ponas Roganas apibūdino J. Murray kaip „šio šūdo Paulą Revere'ą [1]“.

 

 „Aš nenustebau, kad Vance'o kalba susilaukė tokio šalto atsako Miuncheno salėje“, – sako p. Murray. "Jis perdavė Europos elitui tiesas, nuo kurių jie bėgo ilgus metus. Net reakcija į jo kalbą įrodo problemą." Europos lyderiai „amžinai bando šaudyti į pasiuntinius, kurie jiems pasakoja apie jų problemas – net tada, kai žinia ateina iš draugų – užuot iš tikrųjų susidoroję su tomis problemomis“.

 

 45 metų M. Murray yra išleidęs 11 knygų. Pirmoji – lordo Alfredo Douglaso, Oskaro Vaildo meilužio, biografija, buvo paskelbta, kai autoriui buvo 20 metų – „šlykštus amžius, visai nedovanotinas“. Naujausias yra „Karas prieš Vakarus“ (2022) – ataka prieš „visas vakarietiškos tradicijos šaknis ir prieš viską, kas gera, ką sukūrė Vakarų tradicija“.

 

 Jis apgailestauja, kad „demokratijos, proto, teisių ir universalių principų pusė“ per anksti pasidavė jos kultūrinei priešei - postkolonijinei ir rasių apsėstai kairiajai pusei.

 

 Savo raštuose apie Vakarų „deklinizmą“ – šį žodį jis dažnai vartoja – P. Murray rezonuoja su Oswaldu Spengleriu (1880–1936), vokiečių filosofu ir nuosmukio pranašu; Samueliu Huntingtonu (1927-2008), amerikiečių politologu, kuris parašęs „Civilizacijų susidūrimą“; ir Oriana Fallaci (1929–2006), italų žurnaliste, kuri pastaruosius metus praleido perspėjusi mus, kad Europa tampa „Eurabija“.

 

 Britų žurnalas „Prospect“ J. Murray apibūdino kaip „pasaulinės neliberalios dešinės numylėtinį“, o „Keistos Europos mirties“ apžvalgoje kairiajame „Guardian“ buvo kalbama apie jo „gentrifikuotą ksenofobiją“.

 

 Ponas Murray, kurio ikonos yra Edmundas Burke'as ir konservatyvus filosofas Rogeris Scrutonas (1944–2020), šaiposi iš šių sumetimų. Mane „kraštutinės dešinės atstovu“ vadino tik islamistai ir kraštutiniai kairieji, kurie nori bandyti mane stigmatizuoti taip, lyg būčiau visiškai neprotingas galvos daužytojas. Tai yra šmeižtas, skirtas diskusijoms uždaryti“.

 

 Jis priduria, kad terminas nėra bevertis, kai jis teisingai taikomas. M. Murray „labai nerimauja“ dėl kraštutinių dešiniųjų Europoje. "Manau, kad jie egzistuoja."

 

Dešinieji „klysta, kai pradeda žaisti – o aš sakau „žaisti“ su giliomis kabutėmis – su etnonacionalizmu.

 

Manau, kad dauguma žmonių supranta, kad čia tai pradeda nukrypti nuo bėgių. Klausiu jo apie Alternatyvą Vokietijai arba AfD, kuri prieš sekmadienį vyksiančius rinkimus rinkimuose užima antrą vietą. Elonas Muskas išreiškė jo paramą, o J. Vance'as susitiko su jos lyderiu po savo kalbos Miunchene.

 

 „Čia yra labai didelių problemų“, – apie AfD sako M. Murray. "Tai yra kuratoriaus kiaušinis – iš dalies gal ir geras, bet kai kur tikrai blogas. Turiu omenyje, kad partijos viršūnėje yra žmonių, kurie būtų normalūs konservatoriai Britanijoje, gal net centristai demokratai Amerikoje." Tačiau partijoje taip pat yra „žmonių, kurie labai neramina. Tikri neonaciai. Ir tada pagalvoji: Oho, tai partija, kuri bando pataisyti CDU“ – centro dešiniųjų krikščionių demokratų sąjungą.

 

 P. Murray, įgijęs išsilavinimą Etone ir Oksforde, yra sidabraliežuvis anglas, kuris jo, lengvai sugalvojamais, išmaniais daiktais apsvaido amerikiečius. Jis dalija jo gyvenimą tarp Londono ir Niujorko, kur yra Manheteno instituto bendradarbis.

 

 Ar jauni amerikiečiai susidoros su šia užduotimi? Galbūt – jei „turite tinkamas vertybes ir nemokysite jų neapkęsti šalies, iš kurios jie yra“. Ameriką jis vadina vienintele šalimi Vakaruose, kurioje nėra nuosmukio, „o tai nereiškia, kad pavojaus nėra“.

 

Didžioji Britanija J. Murray kėlė neviltį nuo pat paauglystės, kai jis pamatė, kaip Anglijos bažnyčia „iš vietos, kurioje buvo tikėjimas ir tikėjimas, pavirto į savotišką Greenpeace maldą“. Tiesą sakant, nuojautos jausmas apėmė dar anksčiau, kai jam buvo 10 metų. „Buvau savo mokyklos žaidimų aikštelėje Londone, kai pasklido žinia, kad Margaret Tečer atsistatydino“. Jis prisimena mokyklos draugui, kai jie spardė futbolo kamuolį, sakydavo: „Bet kas kitas gali atlikti šį darbą? Ir vėlesni metai parodė, kad atsakymas yra: niekas.

 

 Jis mano, kad JAV „didelis atsparumas“ neleidžia nuosmukiui Ameriką pažaboti. „Šalis gali būti išbandyta labai, labai blogai ir vis dar jo gyvenimas tęsiasi. Jis žavisi amerikietišku charakteriu, netikėtu jo stiprybės pavyzdžiu. "Yra konkretus dalykas, kurio amerikiečiai gali nepastebėti apie save, bet galiu patikinti, kad pašalinis asmuo pastebi. Tai yra, jei neturite siaubingo socialinio rato, jei jums sekasi gerai, jūsų draugai džiaugiasi jumis." Tai nėra tiesa nei Britanijoje, nei Europoje apskritai. „Įsijungia stiprūs neigiami instinktai. „Neišaukštink savęs“. 'Kas tu manai, kad tu esi?'

 

 Amerika taip pat priešinasi nuosmukiui, nes turi „labai gerus pagrindus“. M. Murray sako, kad "amžinai keikiasi prieš amerikiečius, kurie sumenkina šios šalies įkūrėjus. Nes nemanau, kad tie, kurie tai daro, nesuvokia, kaip amerikiečiams pasisekė turėti tokius, kokius turėjote". P. Murray neseniai užkliuvo už kai kurių užrašų, kuriuos jis padarė po pietų su Henry Kissinger. Jis neprisimena, kada tai buvo, bet Kissingeris ką tik perskaitė „Keistąją Europos mirtį“ ir ponui Murray pastebėjo:

 

„Man neaišku, ar šalis, kuri nemėgsta savo praeities, turi ateitį“.

 

Štai kodėl apgaulinga istorija, tokia, kaip „New York Times“ „1619 m. projektas“, ir politiniai kryžiaus žygiai, tokie, kaip DEI, yra pavojingi. „Jie skirti mus demoralizuoti, apgauti amerikiečius, kad jie patikėtų, kad jų šalis yra blogio jėga.“

 

 Poną Murray drąsina Donaldas Trumpas, kuris „aiškiai įsitraukė į jo šalyje egzistuojantį atsakomąjį judėjimą, kai žmonės suvokia, kad buvo nustumti per toli“. Daugelis amerikiečių yra "pakankamai pagrįstai pasibaisėję Amerikos istorijos perrašymu, ir jie, kaip ir kiti žmonės, norėtų didžiuotis savo šalimi ir pagrįstai ją įvertinti. Taigi, tikrai yra judėjimas atgal kitu keliu". D. Trumpas instinktyviai žino, "kad žmonėms patinka nugalėtojai. Štai kodėl vienas didžiausių jo įžeidimų yra vadinti ką nors nevykėliu".

 

 ---

 

 P. Varadarajanas, žurnalo bendradarbis, yra Amerikos įmonių instituto ir Niujorko universiteto teisės mokyklos Klasikinio liberalų instituto bendradarbis." [1]

 

 1. „Paulas Revere (/rɪˈvɪər/; 1734 m. gruodžio 21 d. O.S. (1735 m. sausio 1 d. N.S.)[N 1] – 1818 m. gegužės 10 d.) buvo amerikiečių sidabrakalys, karininkas ir pramonininkas, suvaidinęs svarbų vaidmenį per pirmuosius Amerikos atkūrimo karo ir voliucijos mėnesius. Jo vidurnakčio žygis 1775 m., kad įspėtų netoliese esančius specialistus apie britų kariuomenės artėjimą prieš Leksingtono ir Konkordo mūšius, jį išgarsino.”

 

2.  The Weekend Interview with Douglas Murray: Meet Europe's Paul Revere. Varadarajan, Tunku.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 Feb 2025: A11.

The Weekend Interview with Douglas Murray: Meet Europe's Paul Revere

"New York -- When Vice President JD Vance lectured sullen European leaders in Munich last week about the "threat from within" and "the retreat of Europe from some of its most fundamental values," he could have been channeling the British essayist Douglas Murray -- and he almost certainly was.

In an interview with the podcaster Joe Rogan before his election, Mr. Vance revealed that he'd read "bits and pieces" of "The Strange Death of Europe" (2017), Mr. Murray's best-known book, which argues that "Europe is committing suicide" by a combination of unchecked immigration and a reckless abandonment of its Judeo-Christian principles.

In his trademark style, Mr. Rogan described Mr. Murray as "the Paul Revere [1] of this s---."

"I wasn't surprised that Vance's speech received such a cold response in the hall in Munich," Mr. Murray says. "He delivered truths to the European elites that they have spent years running from. Even the reaction to his speech proves the problem." European leaders are "forever trying to shoot messengers who tell them about their problems -- even when the message comes from friends -- rather than actually facing those problems."

Mr. Murray, 45, has published 11 books. The first, a biography of Lord Alfred Douglas, Oscar Wilde's lover, was published when the author was 20, "a disgusting age, quite unforgiveable." The most recent is "The War on the West" (2022), an account of the attack on "all the roots of the Western tradition and against everything good that the Western tradition has produced."

He laments that "the side of democracy, reason, rights and universal principles" has prematurely surrendered to its cultural enemies on the postcolonial and race-obsessed left.

In his writings on Western "declinism" -- a word he uses often -- Mr. Murray resonates with Oswald Spengler (1880-1936), a German philosopher and prophet of decline; Samuel Huntington (1927-2008), the American political scientist who wrote "The Clash of Civilizations"; and Oriana Fallaci (1929-2006), the Italian journalist who spent her last years warning us that Europe was becoming "Eurabia."

The British magazine Prospect has described Mr. Murray as "a darling of the global illiberal right," and a review of "The Strange Death of Europe" in the left-wing Guardian referred to his "gentrified xenophobia."

Mr. Murray, whose icons are Edmund Burke and the conservative philosopher Roger Scruton (1944-2020), scoffs at these put-downs." "Far right," he says, is "one of those labels around whose use we could do with having some hygiene. I've only ever been called 'far-right' by Islamists and far-leftists who want to try to stigmatize me like I'm a totally unreasonable head-banger. It is a smear, designed to shut down debate."

The term isn't without its value, he adds, when correctly applied. Mr. Murray is "very worried" about the far right in Europe. "I think it exists." The right "goes wrong when it starts to play -- and I say 'play' with deep quotation marks -- with ethnonationalism. I think most people realize that's where it starts to go off the rails." I ask him about Alternative for Germany, or AfD, which is running second in the polls ahead of Germany's Sunday election. Elon Musk has thrown his support behind it, and Mr. Vance met its leader after his Munich speech.

"There are very big problems here," Mr. Murray says of the AfD. "It's a curate's egg -- maybe good in parts, but certainly bad in some parts. I mean, there are some people at the top of the party who would be normal Conservatives in Britain, maybe even centrist Democrats in America." But there also "people in the party who are extremely worrying. Proper neo-Nazis. And then you think: Wow, this is the party that is trying to correct the CDU" -- the center-right Christian Democratic Union.

Educated at Eton and Oxford, Mr. Murray is the sort of silver-tongued Englishman who bowls Americans over with his lightly worn smarts. He divides his life between London and New York, where he is a fellow at the Manhattan Institute.

Would young Americans be up to the task? Maybe -- if "you have the right values in place, and if you don't teach them to hate the country they're from." He calls America the one country in the West that isn't in decline, "which doesn't mean there isn't the danger." Britain has been a source of despair to Mr. Murray since he was a teenager, when he saw the way the Church of England "turned from a place which had a creed and a belief into a sort of Greenpeace of prayer." In fact, a sense of foreboding had kicked in even earlier, when he was 10. "I was in my school playground in London when the news broke that Margaret Thatcher had resigned." He remembers saying to a school friend as they kicked a soccer ball, " 'But who else can do the job?' And the subsequent years have shown that the answer is: nobody."

America's "great resilience," he believes, keeps decline at bay. "The country can be stress-tested very, very badly and it still keeps going." He admires the American character, offering an unexpected example of its strength. "There's a specific thing which Americans may not notice about themselves but which I can assure you an outsider notices. Which is that -- unless you have a horrible social circle -- if you do well, your friends are pleased for you." This isn't true in Britain, or Europe generally. "Strong negative instincts kick in. 'Don't get above yourself.' 'Who do you think you are?'"

America resists decline, also, because it has "very good foundations." Mr. Murray says he is "forever railing against Americans who do down the founders of this country. Because I don't think the ones who do that realize how lucky Americans are to have had the founders you had." Mr. Murray stumbled recently on some notes he'd made after lunch with Henry Kissinger. He can't remember when it was, but Kissinger had just read "The Strange Death of Europe" and had remarked to Mr. Murray: "It's not clear to me that the country that dislikes its past has any future." This is why fraudulent history like the New York Times's "1619 Project" and political crusades like DEI are dangerous. "They're intended to demoralize us, to trick Americans into believing that their country is a force for evil."

Mr. Murray is encouraged by Donald Trump, who has "clearly tapped into the countermovement that exists in his country of people being aware that they've been pushed too far." A lot of Americans are "quite rightly horrified by the rewriting of the American story, and they would like, as people do, to be proud of their country and to have a reasonable estimation of it. So there's definitely been a movement back the other way." Mr. Trump knows instinctively "that people like winners. That's why one of his biggest insults is to call someone a loser."

---

Mr. Varadarajan, a Journal contributor, is a fellow at the American Enterprise Institute and at New York University Law School's Classical Liberal Institute." [1]

1. “Paul Revere (/rɪˈvɪər/; December 21, 1734 O.S. (January1, 1735 N.S.)[N 1] – May 10, 1818) was an American silversmith, militaryofficer and industrialist who played a major role during the opening months ofthe American Revolutionary War in Massachusetts, engaging in a midnight ride in1775 to alert nearby minutemen of the approach of British troops prior to thebattles of Lexington and Concord.”

2.  The Weekend Interview with Douglas Murray: Meet Europe's Paul Revere. Varadarajan, Tunku.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 Feb 2025: A11.