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AI could gobble up a quarter of all electricity in the U.S. by 2030 if it doesn’t break its addiction

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Before artificial intelligence can transform society, the technology will first have to learn how to live within its means.

Right now generative AI have an “insatiable demand” for electricity to power the tens of thousands of compute clusters needed to operate large language models like OpenAI’s GPT-4, warned chief marketing officer Ami Badani from chip design company Arm Holdings. 

If generative AI is ever going to be able to run on every mobile device from a laptop and tablet to a smartphone, it will have to be able to scale without overwhelming the electricity grid at the same time.

“We won’t be able to continue the advancements of AI without addressing power,” Badani told Fortune’s Brainstorm AI conference in London on Monday. “ChatGPT requires 15 times more energy than a traditional web search.” 

Not only are more businesses using generative AI, but the tech industry is in a race to develop new and more powerful tools that will mean compute demand is only going to grow—and power consumption with it, unless something can be done. 

The latest breakthrough from OpenAI, the company behind ChatGPT, is Sora. It can create super realistic or stylized clips of video footage up to 60 seconds in length purely based on user text prompts. 

The marvel of GenAI comes at a steep cost

“It takes a 100,000 AI chips working at full compute capacity and full power consumption in order to train Sora,” Badani said. “That’s a huge amount.” 

Data centers, where most AI models are trained, currently account for 2% of global electricity consumption, according to Badani. But with generative AI expected to go mainstream, she predicts it could end up devouring a quarter of all power in the United States in 2030.

The solution to this conundrum is to develop semiconductor chips that are optimized to run on a minimum of energy.

That’s where Arm comes in: its RISC processor designs currently run on 99% of all smartphones, as opposed to the rival x86 architecture developed by Intel. The latter has been a standard for desktop PCs, but proved too inefficient to run battery-powered handheld devices like smartphones and tablets. 

Arm is adopting that same design philosophy for AI.

“If you think about AI, it comes with a cost,” Badani said, “and that cost is unfortunately power.”  

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American Airlines CEO fired top exec after controversial ‘modern retailing’ strategy infuriated corporate clients

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American Airlines Group Inc. Chief Executive Officer Robert Isom dismissed the carrier’s commercial chief in the wake of a critical report from Bain & Co. about a controversial new marketing system that alienated corporate clients, according to a person familiar with the matter. 

Isom was prompted to fire Vasu Raja within the past few days after the report, which American commissioned from Bain. It revealed concerns by corporate travel advisers over a recent shift in the airline’s sales strategy, which contributed to lagging revenue over the past few quarters, the person said Wednesday.

Raja could not be reached for comment. American announced his departure late Tuesday, and also cut its profit outlook, sending its shares down 14% the next day — the biggest drop in nearly four years.

The new system the CCO had overseen, dubbed  “modern retailing,” sought to push customers away from booking agencies in favor of buying directly through American. The airline’s sales department was cut back as part of the switch. 

But the shift angered some corporate clients and travel management firms, and Raja acknowledged recently that its growth in managed corporate travel volumes was trailing that at rivals United Airlines Holdings Inc. and Delta Air Lines Inc.

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Nelson Peltz sells Disney stake

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Bob Iger and Nelson Peltz.

CNBC

Activist investor Nelson Peltz has sold his entire stake in Disney, a person familiar with the matter tells CNBC.

Peltz sold all of his Disney stock at roughly $120 dollars a share, the person said, making about $1 billion on the position. The stock currently trades for about $100 per share.

The exit comes weeks after Peltz’s Trian Partners lost a proxy battle at Disney in early April as shareholders reelected the company’s full slate of board nominees. Peltz had been seeking to elect himself and former Disney Chief Financial Officer Jay Rasulo to the company’s board.

Peltz had long taken issue with Disney governance. In October, CNBC reported he upped his stake in the company to about 30 million shares and had reignited his proxy campaign, taking particular aim at the company’s streaming strategy and a failed succession plan for CEO Bob Iger.

“We are proud of the impact we have had in refocusing this Company on value creation and good governance,” Trian said in a statement following the April shareholder vote.

Shares of Disney are up about 11% so far this year, slightly edging out the S&P 500.

Disney didn’t immediately return request for comment.



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Tories would swap ‘rip-off’ degrees for apprenticeships

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Hazel Shearing,Alice Evans

PA Prime Minister Rishi Sunak is shown how to splice a wire by a field service engineer apprenticePA

The prime minister visited apprentices in Liskeard, Cornwall, on Wednesday

The Conservatives have promised to scrap some university courses in England to help fund 100,000 apprenticeships per year if they win the July election.

The party says it would replace the “worst-performing” degrees that it considers a “rip-off” because of high drop-out rates and “poor” job prospects.

Labour criticised the government over a decline in the number of new apprentices.

It said it would prioritise “gearing” apprenticeships towards young people.

The Liberal Democrats said the government had treated apprentices like “second-class workers”.

The Conservatives said former Labour Prime Minister Tony Blair’s ambition to get half of young people going to university had “led to low-value degrees ballooning”.

In England, the Office for Students (OfS) can already investigate and sanction a university – for example with fines – if it falls below certain standards.

The Conservatives say they would introduce a new law allowing the independent regulator to go further and completely close the poorest-performing university courses.

They would be determined by drop-out rates, job progression and future earnings potential, the party said in a press release.

Speaking at a railway depot in Cornwall on Wednesday, Prime Minister Rishi Sunak added: “University is great and it makes a fantastic option for young people, but it’s not the only option… And what we do know is that there are university degrees that are letting young people down.”

Schools Minister Damian Hinds told BBC Radio 4’s Today programme there had been a “huge increase in quality” in apprenticeships under Conservative governments. Now was the time to “make sure we’re maximising the available opportunities for young people” and supporting businesses with the new scheme, he added.

Mr Hinds said it would not be “right or fair” on current students to say which courses his party considered to be “rip-off” degrees, and said it varied by individual courses rather than by subject.

“Take computer science – you get earnings outcomes from young people studying computer science degrees which will range from £18,000 to £80,000.”

A graphic which reads 'more on general election 2024'

The Conservative Party estimated that the government would save £910m by 2030 if it scrapped courses that taught 13% of students.

It said this was because the taxpayer “offsets” student loans when graduates do not earn enough money to pay them back. The logic here is that removing courses that lead to lower earnings would result in less unpaid debt.

It said its savings would allow the government to invest in 100,000 more apprentices per year by the end of the next Parliament.

The Conservatives’ calculations are based on the assumption that 75% of the students who would have enrolled on those courses would go into employment or apprenticeships instead.

However, there is no limit on the overall number of students that universities in England can admit – so universities could recruit students to other degree courses if some were closed.

The Institute for Fiscal Studies said this meant it was “unclear” whether savings from scrapping “low-value” courses would be large enough to fund the Tories’ expansion plan.

Birmingham City University (BCU) vice-chancellor, Prof David Mba, said the prospect of more apprenticeships was “great” but he did not want that to be at the expense of university courses.

He said the idea that a degree was a rip-off if it did not reach a minimum earning threshold was “bonkers”, particularly for creative subjects.

“Let’s look at my Royal Birmingham Conservatoire. We train musicians, pianists, over three years; they end up with a degree and it will take them probably a while, as a creative out freelancing, to build up a career and to reach certain earning levels that might be commensurate with what the government think it should be,” he told BBC News.

Birmingham City University Prof David Mba smiles at the cameraBirmingham City University

Prof David Mba has 1,500 degree apprentices at Birmingham City University

Prof Mba said many of his students commuted from deprived parts of the West Midlands, and that BCU’s courses – including its degree apprenticeships – offered “social mobility”.

Sabeeha Anium, who studies computer science at BCU, said her degree was “not a rip-off” as she “gets to learn different things” every day.

Speaking to the BBC on her lunch break, she added: “Every single degree is valuable.”

Aaryan Shabbir, who is on the university’s accelerated two-year digital marketing course, said he would welcome seeing more apprenticeships because of concerns around student debt and finding a job post-degree.

He added: “If I’d [known] more about apprenticeships I would’ve done an apprenticeship.”

BBC/Hope Rhodes Sabeeha Anium smiles at the cameraBBC/Hope Rhodes

Sabeeha Anium studies computer science at Birmingham City University

The Association of Employment and Learning Providers welcomed the announcement and said it hoped other political parties would “match this additional funding”.

Chief executive Ben Rowland said: “Whichever party finds itself in government, there will need to be a commitment to encouraging more employers [to] offer apprenticeship opportunities.”

Neil Carberry, chief executive of the Recruitment and Employment Confederation trade body, said the announcement was “using apprenticeships to denigrate university courses, when we need both to flourish if we’re going to grow”.

Apprenticeships are funded partly by the taxpayer as well as by the apprenticeship levy, which is essentially a tax paid by bigger businesses. Those firms, as well as smaller ones, can access the cash to spend exclusively on training apprentices.

Mr Carberry said the levy made apprenticeships more expensive to deliver – particularly lower-level apprenticeships aimed at younger people – so firms were better off if they did fewer of them.

He said while higher-level apprenticeships were replacing degrees for some people, they did not help people who would not have gone to university and needed a different route to skilled work.

Apprenticeship dropout rates in England are about one in two.

Just over half (54.6%) of apprentices completed and passed a final assessment in 2022-23 – well below the government’s 67% target by the end of 2024-25.

Asked about the dropout rate, Mr Hinds said: “It is true that some young people start an apprenticeship and then they don’t [finish it], and then they take a different turn in their career. When they do that, they’ve accumulated of course skills and experience in that job, and they’ve been earning.

“That has long been true in apprenticeships.”

Labour’s shadow education secretary, Bridget Phillipson, said the announcement was “laughable” because the Conservatives had “presided over a halving of apprenticeships for young people”.

She reiterated her party’s promises to introduce technical excellence colleges aimed at training workers for local industries, and to reform the apprenticeship levy into a “growth and skills levy”, which the party says would allow businesses to spend up to half of their levy payments on “more flexible training courses”.

Munira Wilson, education spokeswoman for the Liberal Democrats, said the Conservatives had “broken the apprenticeship system” and “urgent reform is needed”.

“The shockingly low pay for those on apprenticeships will remain, doing nothing to encourage more people to take apprenticeships up or tackle soaring drop-out rates,” she said.

Additional reporting by Branwen Jeffreys and Hope Rhodes.



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