Latest reports from the IMF reveal that economic gains from artificial intelligence are likely to outweigh the costs of rising carbon emissions from the data centers needed to run AI models. The report, released at the IMF’s annual spring meeting in Washington, revealed how artificial intelligence is going to boost global output by around 0.5% a year between 2025 and 2030. At the same time, it also noted how these output gains will not be shared equally worldwide.
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“Despite challenges related to higher electricity prices and greenhouse gas emissions, the gains to global GDP from AI are likely to outweigh the cost of the additional emissions. The social cost of these extra emissions is minor compared with the expected economic gains from AI, yet it still adds to the worrisome buildup of emissions”.
-IMF report, “Power Hungry: How AI Will Drive Energy Demand”.
Considering that energy policies remain the same and artificial intelligence use becomes widespread, greenhouse gas emissions will see a cumulative global increase of 1.2% between 2025 and 2030. However, a switch to greener energy policies would limit the increase to 1.3 Gt.
Quantifying the social cost of these emissions, the report calculated that the extra cost is likely to be at $50.7-$66.3 billion, which is smaller than the income gains that can help boost the economy by 0.5% each year through AI.
According to the Grantham Research Institute on Climate Change and the Environment, AI may even be able to generate an overall reduction in carbon emissions if it accelerates advances in low-carbon technologies in the power, food, and transport sectors.
“But market forces alone are unlikely to successfully drive AI’s application toward climate action. Governments, tech companies and energy companies must play an active role in ensuring AI is used intentionally, equitably and sustainably.”
– Grantham policy fellow Roberta Pierfederici.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
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12. CoreWeave, Inc. Class A Common Stock (NASDAQ:CRWV)
Number of Hedge Fund Holders in Q4 2024: 0 (Due To IPO in Q1 2025)
CoreWeave, Inc. Class A Common Stock (NASDAQ:CRWV) is a cloud platform provider that provides equipment for AI and other computing purposes. On April 22, Bank of America initiated the stock as “Buy” and a $42 price target. The firm believes that the “AI data center leader” is a share gainer and that CoreWeave’s Cloud Platform has been purpose-built for GPU compute to support AI service providers.
“We are initiating coverage on AI hyperscaler CoreWeave, with a Buy rating and $42 PO. The CoreWeave Cloud Platform has been purpose built for GPU compute to support AI service providers.”
11. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 11
SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses. On April 22, the company announced that it will be working with Tencent Intelligent Mobility, a part of Tencent’s Cloud and Smart Industries Group (CSIG) business. The collaboration aims to provide world-class voice and conversational AI capabilities to Tencent Intelligent Mobility’s cloud-based solutions for the automotive industry.
By leveraging SoundHound’s conversational AI capabilities, Tencent Intelligent Mobility will be able to offer dynamic user experiences to automotive players so that they can provide their end users with seamless hands-free access to a range of in-vehicle applications. Tencent will be integrating SoundHound Chat AI Automotive, which is one of the most advanced in-vehicle voice assistant on the market.
“We’re excited to be working with Tencent Intelligent Mobility to bring their vision for a dynamic, intuitive infotainment platform to life. Our voice AI will play a critical role in giving drivers safe, hands-free access to a vast range of voice-activated content, changing the way that drivers and passengers interact with their vehicles and creating the intelligent in-vehicle experience of the future.”
-Tom Park, Vice President of Business Development, Asia at SoundHound AI.
