On Wall Street, Frustration Is Mounting That AI Will Hijack the Climate Debate

(Bloomberg) -- Of all the ways in which artificial intelligence might destroy humanity, its carbon footprint is far down the list for some of Wall Street's most prominent climate experts.

Aniket Shah, the Jefferies executive who heads the bank's strategy on sustainability and the energy transition, says he's asking the global finance industry not to let AI overshadow talks about reducing planet-warming pollution. His comments, which feed into an already polarized debate, come on the eve of New York Climate Week, where more than 100,000 people are expected to gather over the coming days.

"Climate change is about 50 billion tons of greenhouse gases going to zero, and so we actually have to have a right framing of what is driving that," said Shah. "Data center demand growth is actually not in the top five."

The concern for Shah and those who share his point of view is that angst about the greenhouse gas emissions of AI data centers will drag attention away from areas with substantially higher emissions, like transport and heavy industry.

It's a distinction that others in the finance industry are also starting to make. A recent report by the investment firm of former vice president turned climate campaigner, Al Gore, notes that the power needed to run air conditioning has far greater implications for energy consumption than AI.

It's "understandable" that AI data centers would be "a huge concern" for people worried about climate change, Gore said in an interview. "I just don't think it's a cause for panic."

The energy use and emissions of AI data centers are dwarfed by numerous other activities, he notes. "Just to pick one example, the emissions from uncovered landfills around the world are a large multiple of the emissions from all of the AI data centers put together."

Shah says he expects talks at New York Climate Week "to be all about data centers" and "all about AI." And that would be an unfortunate distraction, he says.

"If you're actually thinking about climate change globally speaking, data centers are just not that big of a deal, just like arithmetically, it's not," Shah said.

A definitive assessment of the greenhouse-gas emissions of AI has yet to be produced. In April, the International Energy Agency said that taking into account an expected doubling of electricity consumption by the end of the decade, data centers will account for just 3% of global demand by 2030. All in all, emissions associated with data centers — not just the ones feeding AI — are on track to make up about 2% of those released by the global electricity sector by 2035, the IEA also said.