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DeepSeek and Ozempic: Emerging Factors Redefining Decarbonization Forecasts

The clean energy sector is facing unexpected disruptions in its push towards decarbonization. From AI advancements to weight-loss drugs like Ozempic, several new factors are complicating the outlook on global energy demand, and experts, like Nat Bullard, are sounding the alarm. Bullard’s annual presentation on green transition trends highlights these challenges, showing how emerging technologies and healthcare developments are throwing new layers of uncertainty into decarbonization predictions.

Bullard, a co-founder of energy platform Halcyon and a former BloombergNEF chief, uses his presentation to explore shifts in global energy dynamics. While 2024 may be a record-breaking year for renewable energy installations, Bullard points out that fossil fuel consumption is rising, with CO2 emissions higher than ever. “We’re burning more fossil fuels while deploying more wind, solar, and battery power than we ever have before,” he explains. “It’s a paradox.”

Here’s a breakdown of some key points from Bullard’s report:

Data Isn’t the Whole Picture 

Electricity demand is projected to grow significantly over the next few years, but a smaller portion of that is likely to fuel AI-driven energy consumption. The International Energy Agency’s recent report suggests that data centers are not the primary driver of the surge in electricity demand from 2023 to 2030.

AI’s Expanding Role 

The electricity demand isn’t solely driven by data centers; however, their impact on energy consumption is undeniable. For instance, the US and Europe are seeing data centers consume more electricity than ever, with Virginia and Ireland being prime examples. Bullard notes, however, that DeepSeek, a Chinese AI startup, has introduced open-source models that require far less energy to train, which could significantly reduce the industry’s demand for power in the long run.

Regulatory Measures And Economic Cycles 

Bullard points out that infrastructure for AI and data centers is often built in cycles of boom and bust. He suggests that regulatory controls could incentivize more sustainable growth patterns in this sector, and DeepSeek’s innovations could pave the way for a slowdown in the rapid expansion of data center infrastructure.

How New Drugs Are Affecting Oil Demand 

Surprisingly, drugs like Ozempic are influencing more than just weight loss—they are changing eating habits and could ultimately reduce oil demand. Bullard highlights studies showing that users of these drugs are consuming less junk food, fats, and meats, which could lead to a decrease in demand for agricultural products like corn and soy. This could have downstream effects on biofuels and bioplastics, further lowering oil demand.

The Shift In The EV Market 

China’s burgeoning electric vehicle (EV) industry is shaking up global markets. With manufacturers like BYD and Geely leading the charge, EVs are becoming more affordable, and now almost two-thirds of China’s EVs are cheaper than their internal combustion engine counterparts. This shift, paired with falling lithium-ion battery prices, is creating a ripple effect in the global auto market. Battery demand is increasing rapidly, but excess production could lead to a surplus that may challenge established trade flows, such as the export of used EVs to regions like West Africa.

Green Finance Faces Setbacks 

While green finance continues to grow, Bullard points out a troubling trend in the US: a decline in public commitments from major investment firms, like BlackRock, to support environmental sustainability. Bullard highlights a shift in language in BlackRock CEO Larry Fink’s annual letters, noting a retreat from ESG-related topics in response to political pressure, particularly from states like Texas. Despite this, energy transition infrastructure funds now total nearly $1 trillion, signaling that green finance is still moving forward, albeit slowly.

As Bullard’s presentation makes clear, the path to a sustainable future is increasingly tangled with unexpected factors, from AI breakthroughs to changing consumer behavior. While the push for decarbonization remains critical, the future is likely to be shaped by new dynamics that can’t be predicted by traditional forecasts alone.

TikTok Returns To US App Stores 

TikTok is once again available for download in the Apple and Google app stores in the US, following a delay in the enforcement of its ban by former President Donald Trump. The ban’s postponement until April 5 gives the administration additional time to evaluate the situation.

Key Developments

The decision to restore TikTok access came after Google and Apple received reassurances from the Trump administration that they would not face legal consequences for reinstating the Chinese-owned app. According to Bloomberg, US Attorney General Pam Bondi sent a letter outlining these guarantees.

In an executive order signed on January 20, Trump instructed the attorney general not to take enforcement action for 75 days, providing time for his administration to determine how to proceed.

Uncertain Future For TikTok In The US

While TikTok is back on the US app stores, its long-term survival remains uncertain. If no deal is reached by early April to address national security concerns, the app may face another shutdown. ByteDance, the parent company, has insisted that TikTok is not for sale.

Legislation And Pressure On ByteDance

The Protecting Americans from Foreign Enemy-Controlled Apps Act, which passed with bipartisan support in Congress, mandates a nationwide ban on TikTok unless ByteDance sells its US operations. This law was signed by President Joe Biden in April of last year.

In late January, the app was briefly removed from US stores following the ban’s activation, impacting over 170 million American users. However, TikTok was restored soon after, following Trump’s intervention in his first hours as president. During that time, he signed an executive order allowing 75 days for a deal that would safeguard national security. Trump also suggested that the US could take a 50% stake in TikTok, a move he believed would keep the app “in good hands.”

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