Oxford economist warns of risks in going big on data centres, critical minerals

 Amir Lebdioui says governments could be building obsolete infrastructure 10 years down the road.

Taking part in a podcast with Shahril Hamdan, Oxford economist Amir Lebdioui said governments should establish technology foresight units to monitor emerging innovations and assess whether alternatives could become commercially viable in the future.

PETALING JAYA:

Countries investing heavily in data centres and critical mineral processing risk losing money if emerging technologies reduce demand for what they are building, Oxford economist Amir Lebdioui has warned.

Amir said governments should weigh the long-term risks before committing billions to industries that could change dramatically within a decade.

“I think it’s quite unlikely that data centres in 10 years will look the same as today,” the Algerian national said in a podcast with Shahril Hamdan.

Amir said if a country hosts data centres, they are essentially at risk of building obsolete infrastructure.

He cited experimental 5D nano-structured glass technology, which he said could store 100 times more data by weight than advanced conventional hard drives.

He also pointed to research in synthetic DNA storage, including work by Microsoft, which could allow vast amounts of information to be stored in much smaller spaces.

Amir was also concerned if governments were sufficiently prepared for technological change.

“Governments often don’t have access to information on potential technological disruptions that could completely disrupt their plans,” he said.

Malaysia has seen a data centre investment boom driven largely by demand for artificial intelligence and cloud computing.

Amir also questioned the benefits of foreign-owned data centres and their role in supporting innovation in the countries hosting them.

“If the data centre is locally owned or if the plan is to use it for domestic data, this opens up possibilities,” he said.

Minerals could lose their value

Amir raised similar concerns about critical minerals, warning that countries may spend years maturing processing industries only to find that the resources being used are no longer needed.

He said at least five types of batteries are currently being developed, some without lithium and others without cobalt.

“It would be crazy to assume the mineral you have will remain valuable because it’s currently needed for technology.

“It takes years for you to build a manufacturing system around that critical mineral, add value, process it, but by the time you get there, that mineral is not needed anymore,” he said.

He urged governments to establish technology foresight units to monitor emerging innovations instead, and assess whether alternatives could become commercially viable in the future.

“My advice is that policymakers should make decisions with calculated risk,” he said.

This would help countries decide whether to process minerals locally, export them while demand remains strong, or develop manufacturing systems that could adapt to technological changes.

Amir warned that political pressure to develop downstream industries could cause governments to overlook the risks.

“Politically, it’s very attractive to tell your constituents, I’m adding value to the country’s natural resources even if it’s extremely risky,” he said.

He cited Chile’s historical dependence on natural nitrate exports as an example of how technological advances could weaken demand for a valuable resource.

He also pointed to Indonesia’s experience with nickel and bauxite, saying efforts to develop local processing industries had produced different results.

He argued that processing raw materials domestically was not always the best economic choice.

Governments needed to anticipate technological changes rather than assume that today’s most valuable resources and infrastructure would continue to remain in demand, he said. - FMT