Strategists Forecast Near 8MM Barrel USA Crude Inventory Drop

Stay Ahead, Stay ONMINE

Strategists Forecast Near 8MM Barrel USA Crude Inventory Drop

In an oil and gas report sent to Rigzone late Tuesday by the Macquarie team, Macquarie strategists revealed that they are forecasting that U.S. crude inventories will be down 7.9 million barrels for the week ending January 17. “This compares to our early look for the week which anticipated a 4.7 million barrel draw, and […]

“This compares to our early look for the week which anticipated a 4.7 million barrel draw, and a 2.0 million barrel draw realized for the week ending January 10,” the Macquarie strategists noted in the report.

“On the product side of the ledger, in aggregate, our expectations are slightly tighter than our early view, but nevertheless represent a healthy build,” they added.

In the report, the Macquarie strategists stated that, “for this week’s crude balance, from refineries”, they “model crude runs lower (-0.6 million barrels per day)”.

“Among net imports, we model a large decrease, with exports sharply higher (+1.0 million barrels per day) and imports up slightly (+0.1 million barrels per day) on a nominal basis,” the strategists continued.

The Macquarie strategists noted in the report that timing of cargoes remains a source of potential volatility in this week’s crude balance.

“From implied domestic supply (prod.+adj.+transfers), we look for a reduction (-0.5 million barrels per day) following a strong print last week. Rounding out the picture, we anticipate another small increase in SPR inventory (+0.3 million barrels) on the week,” they added.

The strategists stated in the report that, “among products”, they “look for builds in gasoline (+3.2 million barrels) and jet (+1.5 million barrels), with a modest draw in distillate (-0.6 million barrels)”.

“We model implied demand for these three products at ~13.9 million barrels per day for the week ending January 17,” they added.

In an oil and gas report sent to Rigzone by the Macquarie team late last week, Macquarie strategists outlined that they “anticipate a solid U.S. crude draw” in this week’s U.S. Energy Information Administration (EIA) weekly petroleum status report.

That EIA report is scheduled to be released on January 23 and will include data for the week ending January 17.

“Looking ahead to next week’s release, we anticipate a solid U.S. crude draw (-4.7 million barrels), with runs lower (-0.5 million barrels per day), nominal implied supply dipping (-0.5 million barrels per day), net imports moderately lower (-0.4 million barrels per day), and a larger increase in SPR inventory (+1.1 million barrels) on the week,” the Macquarie strategists noted in the Macquarie report sent to Rigzone last week.

“We note potential for volatility in these figures given the incomplete nature of this week’s data. Among products, our preliminary expectations point to builds in gasoline (+2.9 million barrels) and jet (+1.8 million barrels) with distillate stocks slightly lower (-0.2 million barrels),” they added.

The EIA’s latest weekly petroleum status report at the time of writing was released on January 15 and included data for the week ending January 10. In that report, the EIA highlighted that U.S. commercial crude oil inventories, excluding those in the SPR, decreased by 2.0 million barrels from the week ending January 3 to the week ending January 10.

Crude oil stocks, excluding the SPR, stood at 412.7 million barrels on January 10, 414.6 million barrels on January 3, and 429.9 million barrels on January 12, 2024, the EIA report showed. Crude oil in the SPR came in at 394.3 million barrels on January 10, 393.8 million barrels on January 3, and 355.6 million barrels on January 12, 2024, the report revealed. The EIA report highlighted that data may not add up to totals due to independent rounding.

Total petroleum stocks – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.625 billion barrels on January 10, the report outlined. This figure was down 2.9 million barrels week on week and up 6.6 million barrels year on year, the report outlined.

In the Macquarie report sent to Rigzone last week, Macquarie strategists highlighted that, last week, the EIA “reported a draw in commercial crude (-2.0 million barrels) with a build at Cushing (+0.8 million barrels) alongside another week of large product builds (gasoline +5.9 million barrels, distillate +3.1 million barrels, jet +2.1 million barrels)”.

“Yet again this week, the crude balance realized much tighter than our expectations, while in aggregate, product balances were significantly looser than our expectations,” the strategists added.

In their report, the Macquarie strategists noted that, “within the crude balance, runs once more exceeded” their “expectation (+0.1 million barrels per day), with net imports much lower than expected on a nominal basis (-1.2 million barrels per day)”.

“Implied dom. supply (prod.+adj.+trans.) was a nominally robust 14.4 million barrels per day (we modeled ~13.8 MBD) despite potential freeze impacts. While this figure still appears quite strong when adjusted for thirdparty estimated waterborne flows, the implied supply picture appears muddled by a number of items this week,” they added in that report.

Also in the report, the Macquarie strategists stated that, “among products, implied demand was consistent with” their “expectation this week, with gasoline+distillate+jet at 13.7 million barrels per day (vs. ~13.7 MBD est.), with the trailing four week average at 13.8 million barrels per day vs. 13.4 million barrels per day for the same four weeks last year”.

“Likewise, total disappearance (impl. demand + exports) for those three products was close to our expectation at 16.0 million barrels per day (vs. ~15.9 million barrels per day est.), with the trailing four week average at 16.3 million barrels per day vs. 15.8 million barrels per day for the same four weeks last year,” the strategists added.

To contact the author, email [email protected]

Stay Ahead

Explore More Insights

Stay ahead with more perspectives on cutting-edge power, infrastructure, energy, bitcoin and AI solutions. Explore these articles to uncover strategies and insights shaping the future of industries.

AI-Powered Policing: The Future of Traffic Safety in Kazakhstan

Traffic management is a growing challenge for cities worldwide, requiring a balance between enforcement, efficiency, and public trust. In Kazakhstan, the Qorgau system is redefining road safety through an innovative fusion of artificial intelligence (AI), computer vision, and mobile technology. Designed to assist traffic police in real-time violation detection and

Quantum networking advances on Earth and in space

“Currently, the U.S. government is not investing in such testbeds or demonstrations, ensuring it will be a follower and not a leader in the development of technical advances in the field,” said a report released last year by the Quantum Economic Development Consortium, a global association of more than 250

What is Transport Layer Security? How TLS1.3 protects your data

The TLS handshake is a multi-step process. A basic TLS handshake involves the client and server sending “hello” messages, and the exchange of keys, cipher message and a finish message. The multi-step process is what makes TLS flexible enough to use in different applications because the format and order of

Who wins in networking in 2025 and beyond?

In this third team, we also find vendors most interested and active in the IoT opportunity, two of which are usually not considered enterprise vendors at all: Ericsson and Nokia. Both these companies are actively pursuing new IoT strategies, and while they are surely hoping that broad public-sensor IoT will

Atlas Energy Solutions Raises $254 Million from Public Offering

Atlas Energy Solutions Inc. has closed an underwritten public offering of 11.5 million common shares with about $254.1 million in net proceeds. The underwriters are allowed to buy up to 1.725 million additional common shares in 30 days. The offering has a price of $23 per share. Atlas executive chair Ben M Brigham increased his shareholding by buying about 200,000 shares in the offering, a regulatory filing showed. An earlier press release by Austin, Texas-based Atlas announcing the pricing of the offering listed Goldman Sachs & Co. LLC and Piper Sandler & Co. as lead book-running managers. Barclays Capital Inc., BofA Securities Inc. and Johnson Rice & Company LLC were named as book-running managers. Listed as co-managers were Capital One Securities Inc., Drexel Hamilton LLC, PEP Advisory LLC, Perella Weinberg Partners LP, Raymond James & Associates Inc., Stephens Inc. and The Benchmark Company LLC. Atlas intends to use the proceeds to pay down indebtedness and help fund the cash portion of its acquisition of Moser Engine Service Inc. On January 27 Atlas announced a deal to purchase 100 percent of Casper, Wyoming-based Moser’s outstanding capital stock for $220 million. “The combination of Atlas’s completion platform and Moser’s distributed power platform creates an innovative, diversified energy solutions provider with a leading portfolio of proppant, logistics (including the Dune Express) and distributed power solutions”, a joint statement said. Moser’s “dynamic fleet of natural gas-powered assets (~212MWs) expands Atlas’s current operations into production and distributed power end markets supported by strong macro tailwinds expected to reduce through-cycle volatility associated with completions operations”, the companies added. The merger “increases Atlas’s customer reach with a vital power service offering in Atlas’s core geography, the Permian Basin, while providing geographic diversity with operating locations in key oil and gas basins across the central United States”, the statement said. Atlas expects to

Rigzone President Talks Hiring Trends in Michael Berry Interview

In a radio interview with Michael Berry on The Michael Berry Show, which aired recently, Rigzone President Chad Norville highlighted some of the latest U.S. oil and gas hiring trends. “What we’re hearing from the medium to larger sized firms is that they’re expecting a relatively flat 2025 relative to 2024 … there’s a lot of optimism in the marketplace, but there are headwinds,” Norville told Berry in the interview. “The discussions we’re having … [are] kind of a ‘wait and see’ approach but … cautiously optimistic. That’s what we’re hearing from the larger producers,” he added. “[From] the medium and smallers, we’re hearing more optimism … more near-term optimism, on hiring, fast-tracking projects … getting permits, doing different things of that nature,” he continued. Looking at the type of positions hiring now, Norville, who highlighted in the interview that Rigzone conducts job fairs “in all the key [U.S.] oil and gas markets” said, “what we’re seeing is a lot of tech roles, field operations types [of] roles”. “Those are the things that I’ve been seeing and I’m still seeing with the job fairs that we’re putting together now, and who we’re talking to,” he added. “You can go on Rigzone and find a petroleum engineer, a mechanical, electrical engineer, geophysical roles, those are always there, but we see large changes as the cycles change,” Norville continued. “We saw things during the pandemic, for instance, it went to a lot of white-collar office roles. Now we’re seeing a lot of tech roles. So, field service technicians, I&E technicians, that’s instrumentation and electrical, mechanics. Those are the types of roles right now we’re seeing,” he noted. “A lot of instrumentation, a lot of electrical, a lot of valve technicians. Those types of field roles are the things that we’re really seeing

Canada’s Scovan Acquires Carbon Capture Assets of Delta CleanTech

Canada’s Scovan Group Inc. is delving into the carbon capture business with the acquisition of the carbon capture and solvent reclamation assets and employees of Delta CleanTech Inc. Scovan Group is the parent company of Scovan Inc., a private Western Canadian engineering, procurement, fabrication and construction management (EPFC) company. “This strategic acquisition represents a significant step forward in Scovan’s commitment to driving innovation and delivering sustainable engineering solutions,” the company said in a news release. The acquisition will result in a new entity that will partner with Scovan while operating as a separate organization. The entity, focused on carbon capture, will maintain continuity with key technical personnel, including Delta CleanTech’s Jeff Allison who will assume the position of VP for Operations. Scovan’s Kelly Mantei will become the organization’s COO, the company stated. According to a statement from Delta CleanTech, Scovan will acquire certain assets related to Delta’s liquids, purification, carbon capture, and OExperts divisions for an aggregate purchase price of up to an aggregate purchase price of $0.73 million (CAD 1.05 million) with project royalties payable of up to $10.69 million (CAD 15.3 million) over a maximum seven-year term. “This deal signifies a new chapter for carbon capture advancement in Western Canada. Delta CleanTech’s products and team are the perfect partner to Scovan’s EPFC services,” Mantei said. “This partnership enables us to leverage complementary strengths, innovate together, and provide unparalleled value to our clients”. “Having the opportunity to continue Delta’s legacy of carbon capture excellence in partnership with Scovan is truly exciting,” Allison said in the release. “This allows us to build on our expertise, scale up our impact, and support clients in achieving their sustainability goals”. “The strategic merger of Delta’s CO2 [carbon dioxide] emissions reduction and related purification division with Scovan, will provide the engineering and fabrication capabilities

Dorian LPG Q4 Profit Slashed 79 Percent as Shipping Rates Down

Dorian LPG Ltd. has reported $21.36 million in net income for the fourth quarter of 2024 (third quarter of fiscal year 2025), down 78.63 percent compared to the same three-month period 2023 as freight rates fell. The Stamford, Connecticut-based owner and operator of very large gas carriers (VLGCs) logged $18.5 million in adjusted net profit, or $0.43 per diluted share, according to results it published online. That was down from $106 million for the fourth quarter of 2023. The adjusted net earnings per share figure missed the $0.56 Zacks Consensus Estimate, an average of projections by brokerage analysts. “The $87.5 million decrease in adjusted net income for the three months ended December 31, 2024, compared to the three months ended December 31, 2023, is primarily attributable to (i) a decrease of $82.4 million in revenues; (ii) increases of $2.2 million in charter hire expenses, $2.2 million in vessel operating expenses, $0.2 million in voyage expenses, and $0.1 million in depreciation and amortization expenses; and (iii) decreases of $1.1 million in realized gain on derivatives and $1.6 million in other gain/(loss), net, partially offset by (i) decreases of $1.2 million in interest and finance costs and $0.2 million in general and administrative expenses and (ii) an increase of $0.9 million in interest income”, Dorian LPG said. Revenues for the October-December 2024 period totaled $80.67 million, compared to $163.06 million for the comparable period in the prior year. Dorian LPG’s time charter equivalent rate per available day in the fourth quarter of 2024 dropped 49.86 percent year-on-year to $36,071. Available days decreased from 2,256 to 2,210. “Weaker import demand from China, driven in part by lower steam cracking demand, resulted in a decline in LPG imports from high levels of 3.5 MMT [million metric tons] in July 2024 to 2.3 MMT in

Trump Signs Memorandum ‘Restoring Maximum Pressure’ on Iran

A fact sheet posted on the White House website on Tuesday stated that U.S. President Donald J. Trump signed a National Security Presidential Memorandum (NSPM) “restoring maximum pressure on the government of the Islamic Republic of Iran”. “The NSPM directs the Secretary of the Treasury to impose maximum economic pressure on the Government of Iran, including by sanctioning or imposing enforcement mechanisms on those acting in violation of existing sanctions,” the fact sheet noted. “The Secretary of State will also modify or rescind existing sanctions waivers and cooperate with the Secretary of Treasury to implement a campaign aimed at driving Iran’s oil exports to zero,” it went on to state. Rigzone has contacted Iran’s ministry of foreign affairs for comment on the fact sheet. At the time of writing, the ministry has not yet responded to Rigzone’s request. In a report sent to Rigzone by the Skandinaviska Enskilda Banken AB (SEB) team on Wednesday morning, Bjarne Schieldrop, the chief commodities analyst at the company, said Brent “turned higher yesterday as Trump ramps up pressure on Iran” but added that it was “slightly lower this morning”. “Brent traded as low as $74.15 per barrel (-2.4 percent) yesterday but managed to close with a gain of 0.3 percent at $76.2 per barrel,” Schieldrop highlighted in the report. “The almost linear downward trend since the recent peak in mid-January seems to have faded a bit with price action now a little more sideways it seems,” he added. In the report, Schieldrop pointed out that, on Tuesday, “Trump signed actions for harder pressure on Iran with the potential to drive its exports significantly lower”. “That Trump would try to drive Iranian oil exports lower has been our expectation all along,” he said in the report. “The oil market is now caught between increasing fears

Orsted, PGE Make FID on 1.5-GW Wind Farm Near Poland

Danish wind developer Ørsted A/S and PGE Polska Grupa Energetyczna S.A. (PGE) have made a final investment decision (FID) on the Baltica 2 Offshore Wind Farm, planned to have a capacity of 1.5 gigawatts (GW). The project will be built, owned and operated in a 50/50 partnership between the two firms. Baltica 2, which will be located approximately 25 miles (40 kilometers) off the Polish coast near Ustka, is expected to be fully commissioned in 2027, Orsted said in a news release. Baltica 2 has a 25-year inflation-protected contract for difference (CfD) in place with the Polish state. The wind farm has obtained all permits and has signed a grid connection contract with the Polish transmission system operator PSE, according to the release. The wind farm will use the Port of Gdansk for the storage, pre-assembly, and offshore installation of wind turbine components. All major component and vessel contracts for Baltica 2 have been signed, locking in the majority of the project’s capital expenditures, “which significantly de-risks the project,” Orsted noted. According to a separate report from PGE, the total budget for the project, including capital expenditures in development and construction, is estimated at approximately $7.41 billion (PLN 30 billion). Newly appointed Orsted CEO Rasmus Errboe said, “With today’s announcement, we’re ready to build Baltica 2, a flagship project for offshore wind in Poland. We’re satisfied with the value creation of the project, which has an attractive risk-reward profile. I wish to thank the Polish government for its support, and I want to thank our partner PGE for working with us to reach this moment. Together, we’re writing a new chapter in the Polish energy sector, and we’re setting up an industry that will bring jobs and industrial development to Poland for decades to come”. PGE CEO Dariusz Marzec said,

Linux containers in 2025 and beyond

The upcoming years will also bring about an increase in the use of standard container practices, such as the Open Container Initiative (OCI) standard, container registries, signing, testing, and GitOps workflows used for application development to build Linux systems. We’re also likely see a significant rise in the use of bootable containers, which are self-contained images that can boot directly into an operating system or application environment. Cloud platforms are often the primary platform for AI experimentation and container development because of their scalability and flexibility along the integration of both AI and ML services. They’re giving birth to many significant changes in the way we process data. With data centers worldwide, cloud platforms also ensure low-latency access and regional compliance for AI applications. As we move ahead, development teams will be able to collaborate more easily through shared development environments and efficient data storage.

Let’s Go Build Some Data Centers: PowerHouse Drives Hyperscale and AI Infrastructure Across North America

PowerHouse Data Centers, a leading developer and builder of next-generation hyperscale data centers and a division of American Real Estate Partners (AREP), is making significant strides in expanding its footprint across North America, initiating several key projects and partnerships as 2025 begins. The new developments underscore the company’s commitment to advancing digital infrastructure to meet the growing demands of hyperscale and AI-driven applications. Let’s take a closer look at some of PowerHouse Data Centers’ most recent announcements. Quantum Connect: Bridging the AI Infrastructure Gap in Ashburn On January 17, PowerHouse Data Centers announced a collaboration with Quantum Connect to develop Ashburn’s first fiber hub specifically designed for AI and high-density workloads. This facility is set to provide 20 MW of critical power, with initial availability slated for late 2026. Strategically located in Northern Virginia’s Data Center Alley, Quantum Connect aims to offer scalable, high-density colocation solutions, featuring rack densities of up to 30kW to support modern workloads such as AI inference, edge caching, and regional compute integration. Quantum Connect said it currently has 1-3 MW private suites available for businesses seeking high-performance infrastructure that bridges the gap between retail colocation and hyperscale facilities. “Quantum Connect redefines what Ashburn’s data center market can deliver for businesses caught in the middle—those too large for retail colocation yet underserved by hyperscale environments,” said Matt Monaco, Senior Vice President at PowerHouse Data Centers. “We’re providing high-performance solutions for tenants with demanding needs but without hyperscale budgets.” Anchored by 130 miles of private conduit and 2,500 fiber pathways, Quantum Connect’s infrastructure offers tenants direct, short-hop connections to adjacent facilities and carrier networks. With 14 campus entrances and secure, concrete-encased duct banks, the partners said the new facility minimizes downtime risks and reduces operational costs by eliminating the need for new optics or extended fiber runs.

Blue Owl Swoops In As Major Backer of New, High-Profile, Sustainable U.S. Data Center Construction

With the global demand for data centers continuing to surge ahead, fueled by the proliferation of artificial intelligence (AI), cloud computing, and digital services, it is unsurprising that we are seeing aggressive investment strategies, beyond those of the existing hyperscalers. One of the dynamic players in this market is Blue Owl Capital, a leading asset management firm that has made significant strides in the data center sector. Back in October 2024 we reported on its acquisition of IPI Partners, a digital infrastructure fund manager, for approximately $1 billion. This acquisition added over $11 billion to the assets Blue Owl manages and focused specifically on digital infrastructure initiatives. This acquisition was completed as of January 5, 2025 and IPI’s Managing Partner, Matt A’Hearn has been appointed Head of Blue Owl’s digital infrastructure strategy. A Key Player In Digital Infrastructure and Data Centers With multi-billion-dollar joint ventures and financing initiatives, Blue Owl is positioning itself as a key player in the digital infrastructure space. The company investments in data centers, the implications of its strategic moves, and the broader impact on the AI and digital economy highlights the importance of investment in the data center to the economy overall. With the rapid growth of the data center industry, it is unsurprising that aggressive investment fund management is seeing it as an opportunity. Analysts continue to emphasize that the global data center market is expected to grow at a compound annual growth rate (CAGR) of 10.2% from 2023 to 2030, reaching $517.17 billion by the end of the decade. In this rapidly evolving landscape, Blue Owl Capital has emerged as a significant contributor. The firm’s investments in data centers are not just about capitalizing on current trends but also about shaping the future of digital infrastructure. Spreading the Wealth In August 2024, Blue Owl

Global Data Center Operator Telehouse Launches Liquid Cooling Lab in the UK to Meet Ongoing AI and HPC Demand

@import url(‘/fonts/fira_sans.css’); a { color: #0074c7; } .ebm-page__main h1, .ebm-page__main h2, .ebm-page__main h3, .ebm-page__main h4, .ebm-page__main h5, .ebm-page__main h6 { font-family: “Fira Sans”, Arial, sans-serif; } body { letter-spacing: 0.025em; font-family: “Fira Sans”, Arial, sans-serif; } button, .ebm-button-wrapper { font-family: “Fira Sans”, Arial, sans-serif; } .label-style { text-transform: uppercase; color: var(–color-grey); font-weight: 600; font-size: 0.75rem; } .caption-style { font-size: 0.75rem; opacity: .6; } #onetrust-pc-sdk [id*=btn-handler], #onetrust-pc-sdk [class*=btn-handler] { background-color: #005ea0 !important; border-color: #005ea0 !important; } #onetrust-policy a, #onetrust-pc-sdk a, #ot-pc-content a { color: #005ea0 !important; } #onetrust-consent-sdk #onetrust-pc-sdk .ot-active-menu { border-color: #005ea0 !important; } #onetrust-consent-sdk #onetrust-accept-btn-handler, #onetrust-banner-sdk #onetrust-reject-all-handler, #onetrust-consent-sdk #onetrust-pc-btn-handler.cookie-setting-link { background-color: #005ea0 !important; border-color: #005ea0 !important; } #onetrust-consent-sdk .onetrust-pc-btn-handler { color: #005ea0 !important; border-color: #005ea0 !important; background-color: undefined !important; } Starting in early 2025, Telehouse International Corporation of Europe will offer an advanced liquid cooling lab at their newest data center, Telehouse South at the London Docklands campus in Blackwall Yard. Telehouse has partnered with four leading liquid-cooling technology vendors — Accelsius, JetCool, Legrand, and EkkoSense — to allow customers to explore different cooling technologies and management tools while evaluating suitability for their use in the customer applications. Dr. Stu Redshaw, Chief Technology and Innovation Officer at EkkoSense, said about the project: Given that it’s not possible to run completely liquid-cooled data centers, the reality for most data center operators is that liquid cooling and air cooling will have an important role to play in the cooling mix – most likely as part of an evolving hybrid cooling approach. However, key engineering questions need answering before simply deploying liquid cooling – including establishing the exact blend of air and liquid cooling technologies you’ll need. And also recognizing the complexity of managing the operation of a hybrid air cooling and liquid cooling approach within the same room. This increases the

Flexential Partners with Lonestar to Support First Lunar Data Center

Flexential, a leading provider of secure and flexible data center solutions, this month announced that it has joined forces with Lonestar Data Holdings Inc. to support the upcoming launch of Freedom, Lonestar’s second lunar data center. Scheduled to launch aboard a SpaceX Falcon 9 rocket via Intuitive Machines, this mission is a critical step toward establishing a permanent data center on the Moon. Ground-Based Support for Lunar Data Storage Flexential’s Tampa data center will serve as the mission control platform for Lonestar’s lunar operations, providing colocation, interconnection, and professional services. The facility was chosen for its proximity to Florida’s Space Coast launch operations and its ability to deliver low-latency connectivity for critical functions. Flexential operates two data centers in Tampa and four in Florida as part of its FlexAnywhere® Platform, comprising more than 40 facilities across the U.S. “Flexential’s partnership with Lonestar represents our commitment to advancing data center capabilities beyond conventional boundaries,” said Jason Carolan, Chief Innovation Officer at Flexential. “By supporting Lonestar’s space-based data center initiative, we are helping to create new possibilities for data storage and disaster recovery. This project demonstrates how innovative data center expertise can help organizations prepare for a resilient future with off-world storage solutions.” A New Era of Space-Based Resiliency The growing demand for data center capacity, with U.S. power consumption expected to double from 17 GW in 2022 to 35 GW by 2030 (according to McKinsey & Company), is driving interest in space-based solutions. Storing data off-planet reduces reliance on terrestrial resources while enhancing security against natural disasters, warfare, and cyber threats. The Freedom data center will provide resiliency, disaster recovery, and edge processing services for government and enterprise customers requiring the highest levels of data protection. The solar-powered data center leverages Solid-State Drives (SSDs) and a Field Programmable Gate Array (FPGA) edge

Why DeepSeek Is Great for AI and HPC and Maybe No Big Deal for Data Centers

In the rapid and ever-evolving landscape of artificial intelligence (AI) and high-performance computing (HPC), the emergence of DeepSeek’s R1 model has sent ripples across industries. DeepSeek has been the data center industry’s topic of the week, for sure. The Chinese AI app surged to the top of US app store leaderboards last weekend, sparking a global selloff in technology shares Monday morning. But while some analysts predict a transformative impact within the industry, a closer examination suggests that, for data centers at large, the furor over DeepSeek might ultimately be much ado about nothing. DeepSeek’s Breakthrough in AI and HPC DeepSeek, a Chinese AI startup, this month unveiled its R1 model, claiming performance on par with, or even surpassing, leading models like OpenAI’s ChatGPT-4 and Anthropic’s Claude-3.5-Sonnet. Remarkably, DeepSeek developed this model at a fraction of the cost typically associated with such advancements, utilizing a cluster of 256 server nodes equipped with 2,048 GPUs. This efficiency has been attributed to innovative techniques and optimized resource utilization. AI researchers have been abuzz about the performance of the DeepSeek chatbot that produces results similar to ChatGPT, but is based on open-source models and reportedly trained on older GPU chips. Some researchers are skeptical of claims about DeepSeek’s development costs and means, but its performance appears to challenge common assumptions about the computing cost of developing AI applications. This efficiency has been attributed to innovative techniques and optimized resource utilization. Market Reactions and Data Center Implications The announcement of DeepSeek’s R1 model led to significant market reactions, with notable declines in tech stocks, including a substantial drop in Nvidia’s valuation. This downturn was driven by concerns that more efficient AI models could reduce the demand for high-end hardware and, by extension, the expansive data centers that house them. For now, investors are re-assessing the

Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only one that is ramping up its investments into AI-enabled data centers. Rival cloud service providers are all investing in either upgrading or opening new data centers to capture a larger chunk of business from developers and users of large language models (LLMs). In a report published in October 2024, Bloomberg Intelligence estimated that demand for generative AI would push Microsoft, AWS, Google, Oracle, Meta, and Apple would between them devote $200 billion to capex in 2025, up from $110 billion in 2023. Microsoft is one of the biggest spenders, followed closely by Google and AWS, Bloomberg Intelligence said. Its estimate of Microsoft’s capital spending on AI, at $62.4 billion for calendar 2025, is lower than Smith’s claim that the company will invest $80 billion in the fiscal year to June 30, 2025. Both figures, though, are way higher than Microsoft’s 2020 capital expenditure of “just” $17.6 billion. The majority of the increased spending is tied to cloud services and the expansion of AI infrastructure needed to provide compute capacity for OpenAI workloads. Separately, last October Amazon CEO Andy Jassy said his company planned total capex spend of $75 billion in 2024 and even more in 2025, with much of it going to AWS, its cloud computing division.

John Deere unveils more autonomous farm machines to address skill labor shortage

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Self-driving tractors might be the path to self-driving cars. John Deere has revealed a new line of autonomous machines and tech across agriculture, construction and commercial landscaping. The Moline, Illinois-based John Deere has been in business for 187 years, yet it’s been a regular as a non-tech company showing off technology at the big tech trade show in Las Vegas and is back at CES 2025 with more autonomous tractors and other vehicles. This is not something we usually cover, but John Deere has a lot of data that is interesting in the big picture of tech. The message from the company is that there aren’t enough skilled farm laborers to do the work that its customers need. It’s been a challenge for most of the last two decades, said Jahmy Hindman, CTO at John Deere, in a briefing. Much of the tech will come this fall and after that. He noted that the average farmer in the U.S. is over 58 and works 12 to 18 hours a day to grow food for us. And he said the American Farm Bureau Federation estimates there are roughly 2.4 million farm jobs that need to be filled annually; and the agricultural work force continues to shrink. (This is my hint to the anti-immigration crowd). John Deere’s autonomous 9RX Tractor. Farmers can oversee it using an app. While each of these industries experiences their own set of challenges, a commonality across all is skilled labor availability. In construction, about 80% percent of contractors struggle to find skilled labor. And in commercial landscaping, 86% of landscaping business owners can’t find labor to fill open positions, he said. “They have to figure out how to do

2025 playbook for enterprise AI success, from agents to evals

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More 2025 is poised to be a pivotal year for enterprise AI. The past year has seen rapid innovation, and this year will see the same. This has made it more critical than ever to revisit your AI strategy to stay competitive and create value for your customers. From scaling AI agents to optimizing costs, here are the five critical areas enterprises should prioritize for their AI strategy this year. 1. Agents: the next generation of automation AI agents are no longer theoretical. In 2025, they’re indispensable tools for enterprises looking to streamline operations and enhance customer interactions. Unlike traditional software, agents powered by large language models (LLMs) can make nuanced decisions, navigate complex multi-step tasks, and integrate seamlessly with tools and APIs. At the start of 2024, agents were not ready for prime time, making frustrating mistakes like hallucinating URLs. They started getting better as frontier large language models themselves improved. “Let me put it this way,” said Sam Witteveen, cofounder of Red Dragon, a company that develops agents for companies, and that recently reviewed the 48 agents it built last year. “Interestingly, the ones that we built at the start of the year, a lot of those worked way better at the end of the year just because the models got better.” Witteveen shared this in the video podcast we filmed to discuss these five big trends in detail. Models are getting better and hallucinating less, and they’re also being trained to do agentic tasks. Another feature that the model providers are researching is a way to use the LLM as a judge, and as models get cheaper (something we’ll cover below), companies can use three or more models to

OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

Stay Ahead, Stay ONMINE