AI is going to be crucial.

This means countries need to look at the amount of compute they have. It starts with data centers, filled with GPUs that can train different AI models. There is also storage along with inference.

Whatever numbers are seen today is small compared to what will be needed in the future.

AI will be the barometer of how healthy a country is. This is akin to being a manufacturing and financial center over the past 150 years. Both of those were able to drive particular countries.

The United States, Japan, Great Britain, and China all held the lead in those areas at particular times.

As always, things are changing. AI and robotics are the future. Of course, as most are aware, this comes with huge energy requirements.

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The Metric of the Future: Energy Per Capita

Data centers are becoming so large, i.e. they suck so much power, that companies are having to provide their own resources when building these. In other words, some type of energy generation plant is required in addition to building the data center.

Some companies are even turning to small nuclear reactors to fuel these operations. The grid cannot handle the power requirements.

This is a clear indication that energy is going to be the major separator going forward. It is not really a change from the past since energy drives all economies in some form. No country was successful without the ability to generate or acquire energy along with a stable grid. Extended power outages are not conductive to economic productivity.

We have a number of economic statistics that are regularly pointed to. These are used to compare the situation among different countries. One of the most common is gross domestic product (GDP). This was designed to capture the economic output of a country.

In a physical world, perhaps this was a valid metric. However, as technology advanced, we see the deflationary nature skew the picture that is being presented. GDP can actually decrease as technology advances even though units (usage) explodes.

We can simply look at video, music, photos, and communications to see how this is the case.

That means another metric might be necessary.

Energy Per Capita

What countries are going to excel in the future?

Obviously, one requirement is to have the financial capacity to build both data centers and energy facilities. That means having a population with technological know-how is crucial.

Of course, this is nothing new as an educated population is one of the requirements for economic advancement.

Moving beyond that, my view is everything is based upon energy. This is something that is glaring. Hence, the metrics that focus upon energy production are more likely to reveal what countries excel in the future.

For this, we can start with total output. Here are the top 10 countries, according to Grok, in energy production:

1. China: 134.6 EJ
2. United States: 103.8 EJ
3. Russia: 58.8 EJ
4. Saudi Arabia: 28.8 EJ
5. Canada: 24.9 EJ
6. India: 24.2 EJ
7. Iran: 18.9 EJ
8. Australia: 18.2 EJ
9. Norway: 12.5 EJ
10. Indonesia: 11.8 EJ

Population size has an impact. Those with larger populations, on a per capita basis, do not fare as well. It is no different than GDP per capita. There, China is the second largest economy in total GDP yet the per capita puts it around 70th.

When looking at energy per capita, we get the same thing. China, even though to leader in total production, is around 50th on a per capita basis. The US ranks around 13th.

Taking this on an energy per capita basis, here is what Grok produced:

1. Qatar: ~1,200 GJ
2. Kuwait: ~900 GJ
3. United Arab Emirates (UAE): ~700 GJ
4. Norway: ~650 GJ
5. Saudi Arabia: ~600 GJ
6. Trinidad and Tobago: ~550 GJ
7. Brunei: ~500 GJ
8. Oman: ~450 GJ
9. Bahrain: ~400 GJ
10. Canada: ~350 GJ

We can see a much different story.

A Shift In Economic Productivity

Why is this a better method to track the capabilities of a country?

Operating from the idea that capital is going to replace labor, what is money? It is really nothing more than stored energy. We use capital to purchase energy. This can be in the form of products, which energy is required to manufacture. This is both power such as electricity and human energy. Then we have services which are humans providing the energy.

Thus, we can even frame this as the basic monetary unit.

However, moving passed that, we have the expected reduction of labor as a component of economic output. If this occurs, we can see how capital investment in energy production is required. AI and robotics means a lot more electricity is required. This will replace the energy derived from calories (humans) via eating.

The question will be how much is going to be required. Countries that lead in the energy per capita tend to be fossil fuel companies that export. This is likely to change as alternative sources become more common.

There could be a point where energy requirements grow to the level where countries start to consume it themselves. For example, how many data centers could Qatar power without having to increase its output? The same is for Kuwait, the UAE, and Norway. These countries have a lot of excess capacity.

From this, if you want to see what countries will be leading over the next few decades, and what the standard of living will be, look at the energy production. Without this, the economic viability is at risk.

Posted Using INLEO