In December, Open AI announced that ChatGPT now has over 300 million people using the AI chatbot each week, a growth of 100 million since August 2024. Last year’s Financial Times business book of the year, written by tech journalist Parmy Olson and titled Supremacy: AI, ChatGPT and the race that will change the world, discusses the extraordinary rise and importance of AI. The decision to choose Parmy Olson’s book should come as no surprise.
The seemingly exponential growth in the use of Artificial Intelligence has made it a familiar feature of the modern economy, and private markets should be no exception. For GPs and LPs striving to meet their sustainability goals, AI holds immense and somewhat untouched potential. It can streamline data collection, analysis, and reporting, enabling firms to more effectively demonstrate progress, as well as providing better and broader value creation opportunities. But here’s the catch: the enthusiastic adoption of AI has a sustainability problem of its own.
AI doesn’t run on air—it demands vast computational power and extensive data inputs. Training a single AI model can consume as much electricity as 100 average U.S. homes use in a year. Additionally, data centers that support AI operations account for approximately 1% of global energy consumption, a figure projected to rise sharply with increased AI adoption. This translates to significant resource impact, which can inadvertently clash with the sustainability goals it’s use is meant to support. As we look to the future, the requirements for powering AI will only grow, putting firms in a tough spot. How do you leverage AI’s potential without overloading your resource footprint?
Here are three practical tips to keep your AI use both effective and sustainable:
Not all uses of AI are created equal. Before jumping on the AI bandwagon, ensure it’s addressing material issues within your ESG framework. Building an AI value creation analyst to auto-suggest simple improvements in sustainable practices might sound great in theory, but if your portfolio is very mature with ESG considerations, perhaps an application is more useful for deep analysis on the impact of renewable energy implementation across your portfolio.
AI providers come in all shapes and sizes, and the buzzword can lead to unnecessary complexity. Choose a partner who understands your challenges and works with you to deliver results with minimal lift. AI should enhance your team’s efficiency, not drown them in elaborate data labyrinths that require intensive computing-and brain-power.
AI can provide powerful insights, but it’s crucial to reassess what matters most in your ESG process. Using AI can make it incredibly efficient to collect more data across your portfolio, but once you collect that data it is important to review and understand, now that you have it, whether its relevant to collect it in the first place and how it impacts your sustainability strategy.
By applying AI judiciously, partnering strategically, and focusing on material ESG factors, you can harness AI’s power without contradicting your sustainability values. After all, true innovation isn’t just about doing more—it’s about doing better.
To learn more about how Dasseti leverages AI to support ESG initiatives sustainably and effectively, get in touch with us today. Let’s explore how our technology can help your firm achieve its sustainability goals while staying true to your values.