The biggest impact of artificial intelligence on the economy is physical, not digital. Every model runs in a data center that needs industrial quantities of electricity, cooling, water, land and a grid connection.
In Israel this creates three tensions:
- Competition for the grid. Data centers compete for the same grid that serves housing, industry and the electrification of transport. Who gets priority for a connection will become a political decision.
- New value for land. Land with access to a substation, water and fiber is worth more than land with a view. Employment land in the periphery may rise in value.
- A question of sovereignty. Whoever holds the electricity, the land and the cooling holds the data. States want their data stored on their territory, which turns a data center into a strategic asset.
Anyone planning a real estate project, an industrial park or an urban plan should first ask how much electricity will be available, and to whom.
Dr. Bella Barda-Bareket analyzes this intersection in the analyses "Don't watch AI. Watch the electricity." and "A data center is not a building" at bluepumpkin.co, and in her book Building with Intelligence on AI in architecture and construction.