AI investor Nicholas Parker is credited with coining the term cleantech in the early 2000s and bets that artificial intelligence can be positively used towards sustainability.EDUARDO LIMA/The Globe and Mail
A Canadian cleantech veteran is betting artificial intelligence will be a force for sustainability – and that there’s money to be made putting it to work.
Nicholas Parker, a long-time investor and adviser to companies and policy makers, has been busy in recent years evaluating how AI can boost energy efficiency, streamline industrial processes and reduce CO2 emissions across numerous industries.
Now he and his team have launched a networking and financing ecosystem to bring together experts, entrepreneurs and investors from around the world to marshal some of the US$138-billion they say will be required to scale AI technologies for sustainability over the next five years.
“We’ve created a platform that will enable us to build and serve a global community. We had lots of experience and last year was very experimental – we just didn’t know if the concept would catch on, if it was rigorous enough, or if it would all end up being about data centres,” Mr. Parker said in an interview.
Opinion: In tackling emissions from artificial intelligence, consider the concrete in data centres
“It was so affirming that we went out and raised a little bit of cash from some AI entrepreneurs and sustainability types, and we’ve been building a team and a platform since then.”
The concept is counterintuitive, Mr. Parker concedes, because of the immense energy it takes to power AI data centres – its biggest hurdle and point of contention.
The hub, called the CleanAI Initiative, is aimed at countering the notion that the world must abandon the environmental and climate fight in favour of endless growth in computing power, he said.
On that front, AI and machine learning can be used to regulate itself, controlling the timing of power use and transmission, as well as tapping green energy when available. Canadian companies such as ThinkLabs AI Inc. and BluWave-ai are active in that area.
Apart from energy, AI is proliferating in agriculture, materials, chemicals, transport, logistics, resources, and environmental technology. For example, using vast amounts of data, AI can pinpoint tracts of forest at risk of catching fire, allowing preventive action. That can both save carbon sinks and prevent the release of CO2 in wildfires.
According to CleanAI figures, investors have plowed US$30-billion into the nexus of AI and sustainability over the past six years, more than two-thirds of that on early-stage technology. The group estimates that such technologies have the potential to reduce global carbon emissions by 10 per cent by 2030.
Members in the CleanAI hub get access to other players in the field, as well as research, data and conferences. It held its inaugural event in Toronto last year, and has scheduled a follow-up for October.
Mr. Parker and his team have launched an international networking and financing ecosystem to bring together experts, entrepreneurs and investors working towards scaling AI technologies for sustainability over the next five years.EDUARDO LIMA/The Globe and Mail
“Where the rubber hits the road is deal sharing, co-investments, limited partners, go-to-market partners who want to see stuff. It’s meant to be action-oriented, not just, ‘Get smart and turn up and collect business cards,’” Mr. Parker said.
“This has been encouraged by the big corporates, for example, who are saying, ‘Look, we’re dealing with privacy and security of data, and we’re dealing with making our workforce feel safe with all this change. We’re not really diving into some of the things that you’re sharing with us. This would be hugely useful.’”
Mr. Parker is well known in Canadian sustainability and venture capital circles. He is credited with coining the term cleantech in the early 2000s as co-founder of The Cleantech Group LLC, a research and advisory company.
Age of breakthroughs: Meet Canada’s next generation of researchers
“They’re starting to aggregate an incredible set of data for a niche within this climate technology world that is becoming a lot bigger than a niche,” said Murray McCaig, co-founder and managing partner of ArcTern Ventures, a cleantech venture capital fund.
“Most companies now are either heavily leveraging it, or are themselves AI companies, and that would include our portfolio,” Mr. McCaig said. “It’s not like we set out to invest in a bunch of AI companies. It just so happens that these climate companies are leveraging AI to make the world a better place, and that’s naturally become a focus area for us.”
Energy demand for AI is expected to double in the next five years. Power for server farms, networking gear, cooling equipment and backup systems totalled 415 terawatt hours in 2024, or about 1.5 per cent of global electricity demand, according to the International Energy Agency.
Because data centres must be up and running 100 per cent of the time, natural gas-fired power is touted as a key electricity source for the “hyperscalers” – companies such as Microsoft, Google and Amazon that are planning to construct the facilities. That raises concerns about the effects on climate.
The Decibel asks: Is AI making us dumb?
But it also fuels interest in technologies to improve environmental performance, said Tyler Hamilton, senior climate director at MaRS Discovery District, the Toronto-based innovation support organization and accelerator. MaRS provides a venue for CleanAI’s conferences.
“There are different flavours of AI companies, some that are actually developing core platforms and others that are just using AI tools to enhance what they’re doing,” Mr. Hamilton said. “So trying to tease out those different opportunities adds a different layer of complexity for investors, but generally, yeah, there’s huge interest in the space.”
Last year’s conference attracted hyperscalers, startups, industrials and investors from 11 countries, Mr. Parker said. “It was a real microcosm of the ecosystem, and that’s coming on top of the data that we were seeing and the gaps that we were seeing between the AI world and the cleantech world.”
“There were very low levels of literacy, and connective tissue. If you’re doing a deal and you want a co-investor, who else is out there that’s interested in AI as it applies to agriculture? So that’s when we decided to go for it,” he said.