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Arizona’s Water Crisis and the Role of Big Tech Data Centers

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Arizona, known for its arid climate and breathtaking landscapes, is currently facing a water crisis. As the state grapples with dwindling water supplies, the role of big tech data centers in exacerbating the problem cannot be ignored. Companies like Google, Microsoft, and Meta have established massive data centers in Arizona, consuming substantial amounts of water to cool their equipment. This article explores the impact of these data centers on Arizona’s water shortage and the efforts being made to find more sustainable solutions.

In recent years, the Phoenix metro area has become a hotspot for big tech data centers. Google, Microsoft, and Meta have all invested in establishing facilities in the region, drawn by the proximity to a large population and the potential for increased revenue. However, the decision to build data centers in a desert region with limited water resources raises concerns about sustainability and responsible resource management.

The water consumption of big tech data centers is staggering. Google, for instance, disclosed that its data centers consumed a whopping 4.34 billion gallons of water in 2021 alone. To put this into perspective, Google compared its water usage to that of 29 golf courses in the southwest US. Meta, formerly known as Facebook, reported withdrawing over 5 million cubic meters of water, equivalent to approximately 1.33 billion gallons, for its data centers in 2021. These figures highlight the significant strain on Arizona’s already limited water resources.

Arizona’s water shortage is a pressing issue that demands immediate attention. Governor Katie Hobbs recently unveiled a plan to limit construction in areas around Phoenix due to the depletion of groundwater. The rapid pace of building, coupled with the water-intensive operations of big tech data centers, has contributed to the state’s water scarcity. Despite the governor’s efforts to restrict construction, already approved developments are exempted from these limits, allowing projects like Google’s Mesa facility and Facebook’s upcoming data center to proceed.

The environmental impact of big tech data centers extends beyond their water consumption. The massive amounts of energy required to power and cool these facilities contribute to greenhouse gas emissions and climate change. However, companies like Google, Microsoft, and Meta are actively working towards more sustainable practices. Microsoft, for example, has committed to using adiabatic cooling, which relies on outside air instead of water, to cool its Arizona data centers. While these initiatives are commendable, the overall sustainability of data centers in water-scarce regions remains a concern.

Despite the challenges posed by Arizona’s water shortage, big tech companies are investing in sustainable solutions. Microsoft’s commitment to adiabatic cooling is a step in the right direction, as it eliminates the need for water-intensive cooling methods. However, the effectiveness of this approach is limited to temperatures below 85°F, making it less viable during Arizona’s scorching summers. As the demand for data centers continues to grow, innovative solutions that reduce water consumption without compromising performance are crucial.

Big tech companies are not only focusing on internal sustainability measures but also collaborating with local communities and organizations to address water scarcity. Partnerships with water conservation projects and initiatives can help reduce the strain on Arizona’s water resources. By investing in responsible water management practices and promoting education on water conservation, these companies can contribute to long-term solutions for the state’s water crisis.

With the escalating water crisis in Arizona, it is essential for the government to implement stricter regulations on water usage, particularly in industries with high water demands like big tech data centers. Balancing economic growth and environmental sustainability is a complex challenge, but it is crucial for the future well-being of both Arizona’s residents and its ecosystems. By incentivizing water-efficient technologies and encouraging responsible resource management, the government can pave the way for a more sustainable future.

Arizona’s water crisis is a pressing issue that demands immediate attention. While big tech data centers have contributed to the state’s water shortage, they also have the potential to be part of the solution. By embracing sustainable practices, investing in water conservation projects, and collaborating with local communities, these companies can help mitigate their impact on Arizona’s limited water resources. Furthermore, government regulations and a forward-thinking approach are crucial in ensuring a sustainable future for both big tech and the state of Arizona.

First reported on Business Insider

Q: Why are big tech data centers being blamed for Arizona’s water crisis?

A: Big tech data centers, including those of companies like Google, Microsoft, and Meta, consume significant amounts of water to cool their equipment. Arizona, already facing a water shortage, is a desert region with limited water resources. The water-intensive operations of these data centers exacerbate the strain on the state’s water supply, contributing to the water crisis.

Q: How much water do big tech data centers in Arizona consume?

A: The water consumption of big tech data centers is substantial. In 2021, Google reported consuming 4.34 billion gallons of water for its data centers, while Meta (formerly Facebook) withdrew over 5 million cubic meters (approximately 1.33 billion gallons) of water for its facilities in the same year.

Q: What efforts are being made to address the water scarcity issue caused by big tech data centers?

A: Some big tech companies are taking steps towards more sustainable practices. For example, Microsoft has committed to using adiabatic cooling, which relies on outside air instead of water, for its Arizona data centers. Additionally, collaborations with local communities and water conservation projects are being pursued to reduce the strain on water resources.

Q: Are there concerns about the overall sustainability of data centers in water-scarce regions?

A: Yes, there are concerns about the sustainability of data centers in water-scarce regions like Arizona. While initiatives such as adiabatic cooling are commendable, they have limitations and may not be suitable during extreme heat. As the demand for data centers grows, innovative solutions that reduce water consumption without compromising performance are crucial for long-term sustainability.

Q: How can big tech companies contribute to long-term solutions for Arizona’s water crisis?

A: Big tech companies can invest in responsible water management practices and collaborate with local communities and organizations. By promoting water conservation education, supporting water conservation projects, and embracing sustainable technologies, they can help reduce their impact on Arizona’s water resources and contribute to long-term solutions for the water crisis.

Q: What role does the government play in addressing the water scarcity issue caused by big tech data centers?

A: Government regulations are crucial in balancing economic growth and environmental sustainability. Stricter regulations on water usage, particularly in industries with high water demands like big tech data centers, can help mitigate the impact on water resources. Additionally, incentivizing water-efficient technologies and encouraging responsible resource management are important steps towards a more sustainable future.

John Boitnott

John Boitnott is a news anchor at ReadWrite. Boitnott has worked at TV News Anchor, print, radio and Internet companies for 25 years. He’s an advisor at StartupGrind and has written for BusinessInsider, Fortune, NBC, Fast Company, Inc., Entrepreneur and Venturebeat. You can see his latest work on his blog, John Boitnott

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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