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Today, AI, Iran, and energy. One goal of this show is to cover the biggest stories in the world. And so what are the biggest stories in the world? Judging by newspaper headlines, you'll probably say that at this moment, it's two Number one, the war in Iran, and number two, artificial intelligence. But if you dig just underneath that headline, if you poke and prod until you get to what those stories are really about, I would argue that at a fundamental level, they are both about the same thing. And that thing is energy. I am recording this at 3pm Eastern Time on Monday, April 13. The top story in the New York Times is, quote, U.S. begins blockade of Strait of Hormuz. And why are we blockading the strait? A strait that theoretically we want to open on account of its original closure. Its original blockade drove up the cost of oil and natural gas and created all these problems throughout the world. Mr. Trump wants to prevent Iran from profiting from oil exports and force its leaders to accept American conditions for ending more than a month of war, end quote. So this is actually a bit stranger than it might initially seem. What happened is we attacked Iran. Iran blockaded the Strait of Hormuz to hurt us, and now we're blockading the Strait of Hormuz to hurt them. Putting aside the logic here, both sides are using their militaries to wage war on the other side's energy economies. This is an energy war. And then there's artificial intelligence. This morning, the top story in the Wall Street Journal homepage was, quote, AI is using so much energy that computing firepower is running out. In the last few months, demand for AI agents has exploded upward so quickly that companies like Anthropic are struggling to keep up supply, namely computer chips. But computer chips are energy intensive to make, and their top manufacturers in Taiwan and Korea face energy shocks from this war. The data centers that computer chips live in also require tremendous amounts of energy to run and keep cool. I think it's important to remember that not every tech wave is like this. Like the consumer tech revolution of the 2010s, with Facebook and Instagram and DoorDash and Airbnb. Those companies were not in the energy business. They were not fixated on scaling software to build a global consumer base. Today's tech story is fundamentally different. Yes, the demand side is important. Getting people to use Claude or ChatGPT matters to the revenue picture for Anthropic and OpenAI. But more than the tech waves of the past, AI is about supply. It's about making chips, buying chips, building data centers, powering them with electricity. And all of this is a story of making stuff in the physical world that requires molecules from oil and gas and electrons from solar and wind. Which is to say AI too is a story about energy. The author Vaclav Smil once wrote that energy is the only truly universal currency and nothing from galactic rotations to ephemeral insect lives can take place without its transformation. End quote. It has never been more true that every story in the world is fundamentally a story about energy. So I felt the time was right to bring back our plain English energy consigliere, Nat Ballard, the Singapore based energy analyst. Today we talk about Iran, AI and why energy continues to be the story that explains the entire world. I'm Derek Thompson. This is plain English, Nat Billard. Welcome back to the show, Derek.
