Bankers Prepare for AI ‘in Every Conversation’ at Climate Summit in Turkey

(Bloomberg) -- As the AI trade shows signs of unraveling, senior bankers gathering on Turkey's Mediterranean coast are hoping to lay the groundwork for deals that can change the technology's long-term impact.

In the Turkish city of Antalya, where the 31st United Nations Conference of the Parties starts on Monday, government leaders, finance executives, business heads and nonprofits will spend the coming two weeks discussing how to convert the pledges of previous COPs into action. The host, Turkey, has identified electrifying more of the global economy as an essential plank in that agenda.

"It will be in every conversation," said Daniel Hanna, head of sustainable and transition finance at Barclays Plc. AI can create the "long-term commercial demand that will help accelerate clean energy and scale certain climate technologies."

Last week's tech-stock selloff was fueled by anticipation that the results of the US midterms will lead to more AI regulations, including tougher energy and environmental standards for data centers in the world's biggest AI market.

"What you're seeing playing out in the US markets right now is that the reaction is that there will be much more regulation," said Marisa Drew, Standard Chartered Plc's chief sustainability officer and one of the bankers headed to Antalya.

From the perspective of capital allocators, AI infrastructure "is going to be trillions of dollars of investment requirement," she said. Regulations that add transparency will help financiers make informed choices and support the companies "that are good environmental and social stewards."

Treating AI as a potential solution to the climate crisis remains a controversial posture. The technology's use of energy, water and land has galvanized a popular movement against data centers, while climate nonprofits have characterized AI's carbon footprint as alarming.

Simon Stiell, executive secretary of the UN's Framework Convention on Climate Change, has described AI as an "energy guzzling" technology that drives up emissions. "AI leaders are now on thin ice," he said in September.

In a report published just before COP31, StanChart described data center growth as "neither environmentally benign nor inherently unsustainable." Instead, the climate footprint depends on local choices, it said.