Does Hyperscale Data Equal Hyper-Job-Growth?
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As Nvidia becomes the first company in history to top $5T in market value (purely on data center revenue!) and Amazon lays off 14,000 people because of AI related efficiencies, I have flashbacks. Having cut my teeth in talent acquisition during the telecom bubble and burst, there were countless companies whose valuations far exceeded their revenue.
From an employment standpoint, overhiring happens in environments where valuations are inflated. And unlike the financial markets, the labor market might not spike immediately and can lag for years ahead with a very slow recovery. For example, widespread layoffs did not immediately follow the stock market crash of 2000. In 2001, the recession officially ended in November but unemployment continued to rise (to 6.3%) until June of 2003.
We clearly have an Artificial Intelligence bubble going on right now. As everyone reading this newsletter knows, there’s an all out sprint to generate the energy to meet the demands of high speed computing. But will the bubble burst? In the late 1990s, tech companies (many of them start-ups and many more without profits) built out massive telecom infrastructure for data traffic projections. Unfortunately, the growth fell short of the data traffic projections and we were left with an overcapacity. This resulted in the loss of $2T in telecom capitalization in the stock market, the bankruptcy of hundreds of telecom companies, and the largest bankruptcy in US history to date, with WorldCom going under. This also resulted in 300,000 jobs lost. I fear the same thing could happen with the energy infrastructure build out.
I don't think that anyone is actually calculating the amount of humans that are currently employed in the Artificial Intelligence industry, but there is definitely a fierce debate on whether AI creates or eliminates jobs. What I can say with certainty is that we will be seeing hyper-growth in job opportunities in energy storage, distributed energy resources, and virtual power plants. I’m also pretty sure that the energy industry will be creating jobs for the next five years to support the AI boom, but beyond that, we will have to wait and see how long-term employment in the field develops and takes shape.
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