Amazon’s Data Center Power Warning, Ex-Trump AI Adviser’s $500M Fund, Anthropic’s Cheaper AI Agents

Akash Pasricha (0:14)

Welcome, everyone, to The Information's TITV. My name is Akash Pasricha. It is Thursday, October 8th. Before we get started today, we have a quick announcement. TITV has been nominated for a Signal Award, which is a big deal in the podcasting industry. For these awards, the audience actually votes on the winners, and we are nominated for the most innovative video podcast. Now, we'd love your help. We're going to put a link in the show description on how to vote for us directly, or you can go to vote.signalaward.com.

Voting closes on October 15th, so we have some time. I'll probably remind you about it a couple of times again. But we are very excited about this and we will keep you posted on it soon. Today on the show, we're going to unpack our exclusive reporting on why a major utility company has warned Amazon it could kick it off the grid. We'll talk about the similar risks facing other hyperscalers as well. We'll then dig into our scoop about Sriram Krishnan, a former top AI advisor to President Trump. He is raising a venture fund. We're going to close out the show with a look at Anthropics Claude Haiku 5.5, adding to a string of releases this week from Mistral and Reflection. I'm going to chat with an AI researcher about what these models mean for the AI story. It's going to be a great show, so let's get right on into it.

Could Amazon get kicked off the electric grid? That was a warning that a Mississippi utilities company sent Amazon earlier this year, according to exclusive reporting from my colleague, Catherine Perloff. This isn't just an Amazon issue, this is an AI sector-wide issue, and so I want to bring on Catherine to walk us through what she found. Catherine, welcome back to the show. It's great to have you here.

Catherine Perloff (2:03)

Hey, Akash.

Akash Pasricha (2:04)

Okay, so let's take a trip down to Mississippi here. Tell us, this utilities company, who is the utilities company in question here, and what was this notice that they sent to Amazon?

Catherine Perloff (2:17)

So this is Entergy. It's the utility in Mississippi. And they said, you know, be prepared that during peak times when, you know, a lot of people are using their electricity, we might have to kick your data centers off.

So, you know, that's sort of a change in the normal course of business because normally, you know, anyone who pays for electricity can expect to get the electricity. But we're sort of in a new framework here because data centers use so much electricity and the grid isn't fully prepared for all of that.

Akash Pasricha (2:49)

And just to make sure I'm clearing this, so is the problem, can people literally not get electricity or is it just the rates are super high right now?

Catherine Perloff (2:56)

It's really more of a capacity issue. I mean, rates can be affected by that for sure. But like, you know, there isn't always enough power to support everyone using the grid or, you know, having their ACs on and then also supporting these massive data centers. And that's why, you know, utilities are sort of making these calls as they sort of build out the capacity they need to support data centers.

Akash Pasricha (3:20)

Okay. And so Amazon gets this notice from Entergy. And how do they respond to this?

Catherine Perloff (3:26)

So they create this new system called Project Falcon, which is a fun name, I think. I guess I'll just put it by.

Akash Pasricha (3:33)

It is. It is objectively fun.

Catherine Perloff (3:34)

Yeah.

But basically, that made it easier for Amazon to switch from using the grid to using backups like generators as an example. And the innovation was Entergy, so the utility could kind of trigger the switch automatically versus Amazon having to make that switch itself. So it was sort of a new engineering system to sort of deal with the challenge they faced to Mississippi, but they could expand it to other regions as well.

Akash Pasricha (4:08)

So basically, Amazon is saying, okay, we hear your concerns. When we meet this threshold of energy or electricity consumption, we will then pivot to using another source of energy.

Okay. So sounds like they're responding. I mean, how big a risk is this to Amazon and to other companies? Because the thing that really caught my attention is, this is an industry-wide issue right now.

Catherine Perloff (4:40)

Totally. So the Mississippi example, we reported, but this is happening in other places in the country.

Texas passed a law allowing their utility to do this, ERCOT. North Carolina, their utility, Duke Energy, has kind of been putting provisions into their contracts with large customers, including data centers, saying, hey, we might be able to kick you off the grid. PJM, which is sort of this, like, regulates the year, works with the utilities itself across many regions in the Eastern United States. They're trying to do this as well.