Maldistribution of AI widens the global technology divide
There’s a quiet revolution underway in the world of cloud computing, but not the kind that drives innovation. Instead, it is a stranglehold that tightens its grip on organizations and the global technology industry as a whole, creating counter-innovation and crippling technological progress for some while advancing it for a handful. The hyperscale cloud oligopoly casts a shadow over the entire industry and hinders global technological innovation, without much awareness of the direct victims, let alone the indirect victims – think of citizens beyond the borders of the US technology hubs. Now that AI is poised to drive global innovation, the stakes are higher.
The allure of seamless and excellent services promised and delivered by the leading cloud service providers (CSPs) masks a silent problem. The convenience, expertise, integrated services and familiarity that a single cloud provider offers have created a huge dependency problem. This trend has become an industry best practice since the mid-2010s, with the growing success of Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Cloud services function smoothly within a single provider, but no universal standards are imposed on the three US-based Cloud Hyperscalers, which hinders mobility and integration between clouds. Companies therefore have no choice but to hand over their digital future to a single cloud provider, and somehow governments and investors have accepted that.
The ongoing antitrust lawsuit – US et al. v. Google – is an example of the US government challenging the monopoly of one provider, but this is an isolated case. The fact is that 80% of companies depend on services from one of the three largest cloud providers. The underlying dependency, wrapped in comfort and convenience, concentrates power and control, making it challenging for companies to imagine a digital future beyond these confines of the cloud.
The overwhelming trust in Cloud partners and the lack of resistance when the dependency is so immense are potentially more alarming than the lock-in itself and can be described as a massive Stockholm Syndrome playing out. Although that is the case, the solution does not come from the sector itself.
CEO of Constant with its cloud platform Vultr.
AI can turn the wildfire into an inferno
The advancements and potential of AI are exacerbating the problem in magnitude. At the heart of this problem lies the artificial inflation of GPU prices dictated by the dominance of the hyperscale cloud service providers. This pricing power of those in charge is not just an inconvenience; it stifles innovation and stifles it most outside America’s tech capitals.
As the majority of GPU chips, crucial for advanced AI applications, end up in the hands of hyperscalers, the consequences are rippling across the business landscape. Startups, especially those venturing into AI, face an uphill battle in presenting viable business cases due to exorbitant GPU-related costs. Even as companies ruthlessly cut costs elsewhere, the price of cloud computing continues to rise. It’s not just an expense; it is a lifeline for businesses, making it impossible to simply switch off and explore alternative options.
The centralized control of critical resources hinders global innovation, creating a scenario where technology hubs in regions beyond the West and East Coast of the US are left behind, let alone the rest of the world, not to mention developing regions in the US thinking. world.
Inequality is stark – while cities like Amsterdam and London may be feeling the pressure, access to GPUs is becoming an insurmountable challenge in Eastern Europe, Italy and Spain. This disparity in access to resources inadvertently shifts the focus of global innovation to issues that matter most in regions that benefit the hyperscalers, leaving the rest of the world to grapple with its unique challenges, widening the gap between the digital and economic ‘haves’ increases enormously. ‘ and ‘don’t have’.
The impact of this GPU shortage is not limited to the business world. In highly regulated industries such as healthcare, where the need for AI-driven innovations is paramount, the limitations of GPU access pose a tangible challenge. The difficulty of meeting regulatory requirements is forcing organizations to resort to physical GPUs deployed in local data centers, reintroducing operational risks that cloud computing tried to eliminate.
The harsh reality is that this GPU shortage is a crisis with far-reaching consequences. As companies struggle to secure the resources needed for AI innovation, the risk of global business and humanitarian disaster looms large.
Preventing a looming business and humanitarian crisis
It is high time that industry players, governments and investors understand their responsibility and act quickly to prevent the global crisis caused by the global cloud lock-in leaking into the AI force field.
Governments should take proactive measures to ensure equal distribution of GPU, promote competition within the cloud computing and AI sectors, and force all cloud providers to support cloud interoperability standards. By promoting regulatory frameworks that encourage open market practices, they can create an environment where there is a good degree of availability and choice for buyers and where suppliers compete without creating lock-in, breaking monopolistic control by a few cloud offerings and worse ; AI Offers.
The importance of clear guidelines on data ownership – sovereignty –, transfer and protection has become clear to governments and companies since the start of the global cloud transition. Yet even data portability is hardly solved. With the risk of AI becoming “an added cloud service,” it is even more important that using a particular cloud for applications still provides freedom in choosing where data is stored, how computing resources are managed, and how specific use cases are implemented, including those using large language models (LLMs). Collaborative efforts among industry stakeholders to develop open standards can reduce dependence on proprietary technologies and promote interoperability and choice.
Digital sovereignty initiatives have grown in importance to ensure that countries have control over their critical digital infrastructure and data. Governments can support the development of national or regional cloud initiatives and provide secure and competitive alternatives to reduce dependence on a small number of global providers.
And companies can proactively implement practices that align with open cloud standards. Deploying your business on infrastructure you don’t own is extremely risky. Therefore, it is imperative to add an abstraction layer with global and neutral standards between yourself and the underlying infrastructure. Supporting the development of alternative cloud providers, participating in the creation of open standards, and embracing digital sovereignty initiatives are ways companies can contribute to a more fair and competitive environment.
The AI revolution has begun and could contribute up to $15.7 trillion to the global economy by 2030, with enormous consequences for society as a whole. Today marks the historic moment when the world either accepts and deepens existing segregation, putting more power in the hands of specific leaders, or this is the historic moment when governments and industry tackle this issue head-on and limit the unlawful rule of silence . forces.
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