The Economics of Artificial Intelligence: Checkpoint 1

Quick checkpoint - five questions on the AI stack, chips, data, open models, market power and energy.

Question 1 of 5 Which layers make up the AI industry stack?

Farms, factories and shops Chips, cloud computing, foundation models and applications Banks and insurers Only apps

Each layer has different economics and competition.

Question 2 of 5 Why did GPUs become central to AI?

They are the cheapest chips Their parallel processing suits the huge numbers of calculations AI needs They are only used for games Governments require them

Nvidia's CUDA software ecosystem also strengthened its position.

Question 3 of 5 What is a central legal debate about AI training data?

Whether data can be stored Whether training on copyrighted work without permission is legal fair use Whether computers can read Whether data is heavy

Lawsuits by authors and publishers are testing this question.

Question 4 of 5 What do open-weight AI models release?

Only a product name The model's learned parameters, so anyone can download, run and adapt it Company profits Nothing at all

Openness supports competition and lower costs but raises misuse concerns.

Question 5 of 5 About what share of global electricity did data centres use in 2024, according to the IEA?

About 1.5 percent About 25 percent About 50 percent None

Their use could roughly double by 2030, driven largely by AI.

← Back to AI's Energy and Water Appetite Next lesson → Regulating AI

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