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Tag: Human Capital

  • Sam Altman gets defensive about AI’s massive electricity usage: ‘It takes a lot of energy to train a human’ | Fortune

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    OpenAI CEO Sam Altman isn’t worried about AI’s increasingly glaring resource consumption, and argued humans require a lot too. 

    In an on-stage interview at the India AI Impact summit, he went on the defensive after he was asked about ChatGPT’s water needs.

    He dismissed claims that the chatbot uses gallons of water per query as “completely untrue, totally insane,” according to a clip posted by The Indian Express, explaining that data centers powering ChatGPT have largely moved away from water-heavy “evaporative cooling” to prevent overheating.

    Altman was then asked about the electricity needed for AI. In contrast to the issue of water, he claimed it was “fair” to bring up the technology’s energy requirements, saying “We need to move toward nuclear, or wind, or solar [energy] very quickly.”

    But he pointed out that comparing AI’s power needs to humans isn’t exactly apples to apples.

    “It also takes a lot of energy to train a human,” he said, prompting some in the crowd to laugh. “It takes, like, 20 years of life, and all of the food you eat during that time before you get smart.”

    Altman expanded even further by noting that today’s humans wouldn’t even be here were it not for their ancestors dating back hundreds of thousands of years to when modern humans first emerged.

    “Not only that, it took, like, the very widespread evolution of the 100 billion people that have ever lived and learned not to get eaten by predators and learned how to, like, figure out science or whatever to produce you,” he added.

    When comparing humans to ChatGPT’s potential, you have to take this context into account, he argued. A fair comparison would be to pit the energy a human uses to answer a query with an AI after it is trained. On that measure “probably, AI has already caught up on an energy efficiency basis measured that way.”

    In a June 2025 blog post, Altman claimed each ChatGPT query takes about 0.34 watt-hours of electricity, or around what an oven uses in about a second. Still, he published this fact before OpenAI released its newest GPT-5 model and its subsequent upgrades. Energy consumption can also vary based on the complexity of a query, for example, answering a question versus creating an image.

    Experts have warned that AI as a whole will  increase its cumulative power and water consumption greatly over the next 20 years or so. Overall, AI’s water usage is set to grow by about 130%, or by about 30 trillion liters (7.9 trillion gallons) of water through 2050, according to a January report by water technology company Xylem and market research firm Global Water Intelligence. 

    Over that same period, rising electricity demands are expected to increase the water use for data centers’ power generation by about 18%, reaching roughly 22.3 trillion liters (5.8 trillion gallons) per year. Meanwhile, the ever more complex chips data centers use will need more water during the manufacturing process, which will skyrocket the amount they require by 600% to 29.3 trillion liters (7.7 trillion gallons) annually from about 4.1 trillion liters (1.8 trillion gallons) today.

    While OpenAI has moved away from evaporative cooling, 56% of all data centers globally still use the method in some form, according to the Xylem and Global Water Intelligence report. 

    OpenAI’s own 800-acre data center complex in Abilene, Texas will reportedly use water, albeit, in a more efficient, closed-loop system that continuously recirculates water to cool the data center, the Texas Tribune reported. The data center will initially use 8 million gallons of water from the city of Abilene to fill its cooling system.

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    Marco Quiroz-Gutierrez

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  • Workday lost $40 billion in value. Founder Aneel Bhusri is back with a $139 million bet he can turn it around | Fortune

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    By bringing cofounder Aneel Bhusri back to the CEO job, Workday has turned to a classic Silicon Valley tradition to deal with the AI threat squeezing software company stocks: the return of the founder.

    Bhusri’s return to the top job at the human resources software company reflects the belief that only a founder with billions on the line and a personal legacy at stake has the unique vision and authority to steer the ship through difficult waters. And with majority voting control plus operational authority as CEO, Bhusri will have more power to make any difficult changes he sees necessary. A close look at Bhusri’s compensation package however suggests that it’s also an acknowledgement of just how bleak the investor prognosis is for software-as-a-service (SaaS) companies. 

    To lure Bhusri back to the CEO job he left two years ago, Workday is giving him a $138.8 million pay package comprised of cash and performance-based and restricted stock. More than half of the package, $75 million, only pays out if Bhusri can hit a series of undisclosed stock price targets over the next five years. Perhaps more telling is the other half: Roughly $60 million in restricted stock requires only that Bhusri stick around at Workday for the next four years, with no performance targets whatsoever.

    With Wall Street bearish on SaaS companies, Workday is effectively recognizing the deep skepticism that even its founder-savior will face in successfully making the transition into the AI age.

    The AI panic rippling through enterprise software stocks for the past couple of weeks has helped wipe out some $40 billion in value at Workday, slashing its market cap in half from an all-time high of $80 billion. The stock has fallen 51% to roughly $150 a share from an intraday peak of $311.28 less than two years ago. This year alone, the stock is down 29% amid the broad bloodbath subsuming the SaaS industry. Other SaaS companies, including Salesforce, ServiceNow, and HubSpot, have all suffered double-digit declines in their stock prices.

    “AI is reshaping how work gets done and represents an even bigger transformation than the shift to cloud 20 years ago,” Bhusri wrote in a LinkedIn post the day after the news of the leadership change. “Just as we helped redefine enterprise software when we founded Workday, I believe we can once again lead the way in this AI era.” 

    There’s a lot at stake for Bhusri, even if he weren’t taking back the reins. As executive chair at the SaaS giant for the past two years, Bhusri has seen half the value of his more than 8-million share ownership stake nosedive from an all-time-high value of $2.6 billion in 2024, to about $1.3 billion. That’s a wealth wipeout on paper of roughly $1.3 billion in less than two years.

    20 years of decision making data and 68% voting control

    Bhusri may have more hands-on experience leading a company than the average founder. Bhusri founded Workday with best friend and mentor Duffield in 2005 before the two joined forces as co-CEOs in 2009. In the years since, Bhusri served as sole CEO after ceding the chairmanship to Duffield before sharing it again in August 2020 with then co-CEO Luciano “Chano” Fernandez. After Fernandez announced his departure in December 2022, the board appointed ex-Sequoia Capital partner Carl Eschenbach to serve alongside Bhusri before Bhusri stepped into the executive chair role in February 2024. Now, with Eschenbach out as CEO, Bhusri is back in the saddle as CEO and chairman. 

    As the software company turns the page, it has 20 years of decision making data and process history that give the opportunity to offer enterprise grade intelligence to large customers, Bhusri wrote in his post. 

    Workday’s success is highly dependent on Bhusri. The company operates with a dual-class share structure, which means shares sold on the open market, Class A shares, carry a single vote apiece, while Class B shares are worth 10 votes each. Between cofounder Dave Duffield and Bhusri and their affiliates and a voting rights agreement that dates back to Workday’s 2012 IPO, the two cofounders control 68% of the voting power through their Class B share ownership. 

    Bhusri’s Linkedin post is jam-packed with optimism for Workday’s future but the numbers are far more complex. In the past three years, the company has announced multiple rounds of layoffs impacting thousands of jobs with the rationale that they were part of a realignment, a shift toward AI, and a move to improve profitability. Last February, the company slashed its workforce by roughly 7.5% as part of a restructuring plan and recorded $172 million in associated charges.

    While revenue is growing—Workday posted $8.4 billion in total revenue for fiscal 2025, up 16% over the year prior—that growth has slowed. Subscription revenue growth, for example,slowed from 19% in fiscal 2024 to 17% in fiscal 2025, per the company’s annual report, with the most recent quarter showing 15%. Plus, the unknown impact AI will have on SaaS companies is a brutal hangover on the sector, and the impact on Workday is significantly visible. The day of Bhusri’s return, the stock dropped more than 6%, underscoring investors’ anxiety about the company and its challenges adapting to the AI age. 

    Workday has been mum on the specific targets Bhusri will have to hit to see his $138.8 million package pay out, but the disclosed terms state the $75 million award will be divided up into tranches that will require Bhusri to hit stock price targets—and stay at Workday. Bringing the price back up to its peak will mean more than doubling the stock price in the next five years. Bhusri’s $60 million restricted stock award will vest over four years so long as Bhusri stays with the company. He’ll also collect a $1.25 million yearly salary and a yearly cash bonus of up to $2.5 million. He won’t be eligible for any more grants until 2027.

    Eschenbach, the former CEO, who resigned from all his roles and will now serve as a senior advisor, got a severance package valued at roughly $3.6 million and he’ll see accelerated vesting on nearly 140,000 shares of restricted stock units that would have vested in the year after his departure. At $150 a share, Eschenbach’s equity is worth more than $20 million, and he’ll see accelerated vesting on another 24,000 additional shares if performance metrics tied to the award are met. His “push-out score,” an independent assessment of the terms of his departure, ranked his departure a nine out of 10. The score suggests “it seems extremely likely” Eschenbach felt pressured to leave.

    In a post on LinkedIn, Eschenbach praised Bhusri and his former “Workmates” at Workday.

    “The opportunity ahead of us is always greater than what’s behind,” wrote Eschenbach. “We are at a massive inflection point with AI, and there is nobody better than Aneel to lead Workday through this moment and drive the vision forward.”

    Bhusri and Duffield’s agreement also means that if one of the co–founders is incapacitated or dies, the other gets control of both stakes. The dual-class structure is set to expire in October 2032—a year after Bhusri’s performance window closes in early 2031. That gives Bhusri a solid chunk of time to see if a co-founder in the CEO seat can make an impact on the stock price in the midst of an AI tidal wave.

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    Amanda Gerut

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