After the US and Israel launched their coordinated strikes on Iran in February of this year, the press abounded with stories about the crucial materials that would from now on be holed up in the Persian Gulf. In the case of AI, the most relevant 'input' is helium, 30 percent of which (coming from Qatar) was taken off global markets by the war. Spot prices for the gas promptly doubled and major foundries in South Korea and Taiwan, heavily reliant on Qatari production, got nervous.
However, chip production volumes have not been impacted because of 3 to 6 month inventories and recycling of the gas. Furthermore, the doubling of prices did not substantially impact costs because it is a relatively inexpensive input (less than 1 percent of total outlay).
Is the industry off the hook? Not quite. After the summer intermezzo, both parties seem ready to pursue the conflict further, the one due to distrust, the other due to fear of losing face. This could pose an issue since 1. Reserves run down and need to be replenished 2. Despite being relatively unimportant in terms of costs, helium is an essential component that is currently irreplaceable in the supply chain. The issue is compounded by the fact that the Ras Laffan installation will take up to 5 years to repair according to Qatari officials.
What does this mean for AI Safety? We should restrain ourselves from cheering. It is not obvious that reduced chip production will slow AI development. Rather, with the exorbitant sums currently being mobilised by hyperscalers and labs, they could simply hoover up the market for chips, thereby concentrating compute even further into their hands.
