How AI could impact geopolitics

The rise of AI isn't just a tech story. It could have profound implications for energy markets, for geopolitics. And to better understand all this, I'm sitting down today with Jared Cohen, who is our president of Global Affairs and co head of the Goldman Sachs Global Institute. Jared, welcome back to the program. Always Hey, Jared. Pleasure to have you. So, Jared, we have had a lot of discussions on this program about the many ways that AI is shaping markets, the many ways that it could shape industries and economies. But you're focused on what it could shape even beyond that. Why is this an i

So, look, when it comes to AI, there's a lot of known unknowns. Right? Will it be open weighted models over closed models that went out? Will the use cases ever justify the enormous spend? Who will be the winners and losers? These are all very interesting questions. None of them are urgent. There's a very urgent question right now, which is the one that I'm focused on, which is if AI software has to run on AI hardware somewhere, can the US maintain a leadership position when it comes to generative AI? And the answer comes down to a larger question about whether or not the infrastructure can be

Why can't the US do this? What is the constraint there? Is it just a funding issue, or is it actual physical limitations? So

there's no shortage of funding in this space. The hyperscalers are set to spend roughly $1,100,000,000,000 on the higher end in CapEx associated with meeting AI demand. The issue is if you look at the 8,000 data centers worldwide, there's roughly 3,000 in the United States. Those data centers have very low vacancy. So you have less than 3% vacancy rates. So that's one problem is we don't have enough space in existing data centers. 2nd problem, if you look at our existing data centers, a lot of them support cloud workloads. AI workloads are ultra high density requiring a concentrated source of

so what will that look like, and and what will be the implications for the US?

So I think the US has three options for an overflow for building out AI infrastructure, and none of them are really great options. So one option is you kinda keep it in, let's call it, the democratic world. So think Canada, the Nordic countries, Australia, great options, France. The problem is they're gonna have a lot of the same political issues that we have here in the US. And there's a risk in going all in on that. So geopolitically, you don't worry about those countries staying on sides, but you worry that they have a lot of the same kind of complicated domestic political issues associated

I guess my question to you is, are these companies, these US companies leading this, are they on board? So

I think we're sort of early days on this. These countries in the Middle East have a lot of leverage to be able to get countries to set up shop on the ground. I think the inflection point is a shift from doing so in a performative way or in a reactionary way. Think what these countries would actually like is for the US companies to see the value of setting up shop there independent of the things that they want from these countries. And I think we're not at the beginning of this, but that hasn't really reached its full maturity yet. But it's trending in that direction, but I think it's gonna be

Understood. But, look, we've already seen, I think, in some other industries that process moving forward. But