16/07/2025

BIZ & FINANCE WEDNESDAY | JULY 16, 2025

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Tech giants scramble to curb AI’s hunger for power

Thames Water fights to avoid nationalisation after £1.65 billion loss LONDON: Thames Water reported an annual pre-tax loss of £1.65 billion (RM9.4 billion) yesterday and a downturn in its environmental performance, with sewage spills up by a third, as the debt-laden utility seeks to fight off nationalisation. The British company, which said it had sufficient funds to continue operating for 12 months, is in talks with its senior creditors and regulators to secure a £5 billion rescue to stabilise its balance sheet. For the deal to go ahead, it wants regulatory changes, including new targets that would reduce the penalties and fines that contributed to the loss. “We recognise that our current gearing is too high and, to address this, we are progressing with our senior creditors’ plan to recapitalise the business which will see us return to a more stable financial foundation,” chief executive Chris Weston said. “This will come with a requirement to reset the regulatory landscape and acknowledge it will take at least a decade to turn Thames around.” The company said there was a “material uncertainty” as to whether it could deliver the recapitalisation. Should it fail, special administration could be necessary, it said. That would see the government take control of the company to ensure it continued to supply water. The loss reported by the company for the year to end-March included a £1.27 billion provision against a loan from its parent company that it does not deem recoverable, £122 million in fines, £198 million of restructuring plan fees and £151 million of restructuring costs. The company, which has 16 million cus tomers in London and southern England, said it had made progress, but its pollution record was “disappointing”. The company said although it had faced an increasingly challenging financial position, with gearing increasing to 84.4%, its underlying performance had strengthened, with revenue up by 8% and core earnings up 10%. – Reuters ORACLE TO INVEST US$3B IN AI, CLOUD IN GERMANY, NETHERLANDS BENGALURU: Oracle will invest US$3 billion (RM12.7 billion) over the next five years in artificial intelligence (A) and cloud infra structure in Germany and the Netherlands to meet upbeat demand, the company said in separate statements yesterday. The cloud service provider plans to allocate US$2 billion to Germany and US$1 billion to the Netherlands. Oracle, whose cloud offerings support companies in building AI infra structure, has seen its shares surge about 38% so far this year. In June, the company raised its annual revenue forecast, driven by strong demand for its AI-related cloud services. Oracle is also part of a joint venture called Stargate, aimed at delivering large scale computing capabilities to OpenAI. – Reuters STANCHART OFFERS BITCOIN, ETHER TRADING FOR INSTITUTIONS HONG KONG: Standard Chartered (Stan Chart) has introduced spot trading for bitcoin and ether through its UK branch for institutional clients to cater to rising demand for crypto assets. The UK-headquartered bank said yesterday it is the first global systemically important bank to offer secure, regulated and scalable access to bitcoin and ether deliverable spot trading. Institutional clients, including corporates, investors and asset managers, can now trade digital assets through familiar FX interfaces, and will soon be offered non-deliverable forwards trading, StanChart said in a statement. – Reuters

o Data centres could consume 3% of world’s electricity by 2030, according to International Energy Agency

have to rebuild existing data centres. “There simply wouldn’t be enough liquid cooling capacity to support our scale,” Dave Brown, vice-president of compute and machine learning services at AWS, said in a YouTube video. For McKinsey’s Sachdeva, a reassuring factor is that each new generation of computer chips is more energy-efficient than the last. Research by Purdue University’s Yi Ding has shown that AI chips can last longer without losing performance. “But it’s hard to convince semiconductor companies to make less money” by encouraging customers to keep using the same equipment longer, Ding added. Yet even if more efficiency in chips and energy consumption is likely to make AI cheaper, it won’t reduce total energy consumption. “Energy consumption will keep rising,” Ding predicted, despite all efforts to limit it. “But maybe not as quickly.” In the United States, energy is now seen as key to keeping the country’s competitive edge over China in AI. In January, Chinese startup DeepSeek unveiled an AI model that performed as well as top US systems despite using less powerful chips – and by extension, less energy. DeepSeek’s engineers achieved this by programming their GPUs more precisely and skipping an energy-intensive training step that was previously considered essential.

NEW YORK: The artificial intelligence (AI) industry is scrambling to reduce its massive energy consumption through better cooling systems, more efficient computer chips and smarter programming – all while AI usage explodes worldwide. AI depends entirely on data centres, which could consume 3% of the world’s electricity by 2030, according to the International Energy Agency. That’s double what they use today. Experts at McKinsey, a US consulting firm, describe a race to build enough data centres to keep up with AI’s rapid growth, while warning that the world is heading towards an electricity shortage. “There are several ways of solving the problem,” explained Mosharaf Chowdhury, a University of Michigan professor of computer science. Companies can either build more energy supply – which takes time and the AI giants are already scouring the globe to do – or figure out how to consume less energy for the same computing power. Chowdhury believes the challenge can be met with “clever” solutions at every level, from the physical hardware to the AI software itself. For example, his lab has developed algorithms that calculate exactly how much electricity each AI chip needs, reducing TOKYO: Struggling auto giant Nissan said yesterday it will stop production at its plant at Oppama in Japan at the end of its 2027 fiscal year. Nissan posted a net loss of ¥671 billion (RM19.3 billion) last year and it has said it will cut 15% of its global workforce. “The company will cease vehicle production at the Oppama plant at the end of fiscal year 2027,” Nissan said in a statement. Production of the plant outside of Yokahama will be shifted to another existing factory on the southern Japanese island of Kyushu, it said. One of Nissan’s six domestic plants, Oppama exmployed around 3,900 people as of October 2024 and began operations in 1961, according to the company’s website. It was a “pioneer in the production of advanced vehicles, such as the Nissan LEAF, the world’s first mass-market electric vehicle”, Nissan said. Other facilities and functions in the district such as the Nissan Research Center and a crash-test facility, will be unaffected. The heavily indebted carmaker, whose mooted merger with Japanese rival Honda collapsed this year, is slashing production as part of its expensive business turnaround plan. Nissan said in May it would “consolidate its vehicle production plants from 17 to 10 by fiscal year 2027”. Like many peers, Nissan is finding it difficult to compete against Chinese electric vehicle brands. The merger with Honda had been seen as a potential lifeline but talks collapsed in February when the latter proposed making Nissan a subsidiary. Nissan has faced numerous speed bumps in recent years – including the 2018 arrest of

energy use by 20-30%. Twenty years ago, operating a data centre – encompassing cooling systems and other infrastructure – required as much energy as running the servers themselves. Today, operations use just 10 percent of what the servers consume, says Gareth Williams from consulting firm Arup. This is largely through this focus on energy efficiency. Many data centres now use AI-powered sensors to control temperature in specific zones rather than cooling entire buildings uniformly. This allows them to optimise water and electricity use in real-time, according to McKinsey’s Pankaj Sachdeva. For many, the game-changer will be liquid cooling, which replaces the roar of energy hungry air conditioners with a coolant that circulates directly through the servers. “All the big players are looking at it,” Williams said. This matters because modern AI chips from companies such as Nvidia consume 100 times more power than servers did two decades ago. Amazon’s world-leading cloud computing business, AWS, last week said it had developed its own liquid method to cool down Nvidia GPUs in its servers – avoiding

China is also feared to be leagues ahead of the US in available energy sources, including from renewables and nuclear. – AFP Nissan to halt production at Oppama plant in Japan

BR I E F S

Employees of Nissan Motor working at an assembly line of its Oppama plant in Yokosuka in September 2014. One of Nissan’s six domestic plants, Oppama exmployed around 3,900 people as of October 2024 and began operations in 1961, according to the company’s website. – AFPPIC former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box. Trump’s 25% tariff imposed on imported Japanese vehicles earlier this year.

This is because its clientele has historically been more price-sensitive than that of its rivals, according to experts. One potential solution for Nissan could be Taiwanese electronics behemoth Hon Hai, better known as Foxconn, which assembles iPhones and is expanding into cars. Foxconn said in February it was open to buying Renault’s stake in Nissan. – AFP, Reuters

Rating agencies have downgraded the firm to junk, with Moody’s citing its “weak profitability” and “ageing model portfolio”. This year Nissan shelved plans, only recently agreed, to build a US$1 billion (RM4.24 billion) battery plant in southern Japan owing to the tough “business environment”. Of Japan’s major automakers, Nissan is seen as the most exposed to US President Donald