Auction markets for compute capacity as a pathway to building AI

 Dr. Silvia Console Battilana who partnered with Paul Milgrom to found the auction consulting firm Auctionomics, writes about markets for compute capacity as an aid to developing AI.

The Missing Market We Need To Win The AI Race
By Silvia Console Battilana,Forbes Councils Member.
for Forbes Business Council COUNCIL POST | Membership (fee-based) 

"In 2025, the global artificial intelligence market was valued at nearly $300 billion. By 2034, it’s projected to grow to almost $2.5 trillion. Demand for AI services is soaring and AI providers are racing to keep up. Behind them, suppliers of “compute”—the chips and data centers that power AI—are scrambling to expand capacity.

"So, what can the compute market do to enable this growth?

 ...

"There’s another drag on AI growth, and it’s one that I’ve seen before in my work designing markets for radio spectrum, energy and other limited resources: inefficient use of existing capacity. I believe the key to unleashing AI’s potential is not just to build more, but to use what we already have more productively.​

...

"Speeding up our AI highways will require addressing problems with existing compute markets. And one of the primary issues is that we treat all demand for compute the same. Some large compute jobs, including training runs for new AI models, are like tractors that move slowly and take up multiple lanes. These jobs require large quantities of compute but can be completed anytime. They could run overnight without losing value. Real-time AI queries and time-sensitive regressions, on the other hand, are like race cars. Their value depends entirely on speed. If they’re late, they’re worthless.

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"We can build more lanes on the highway, but in my experience, that tends to be more costly than adding traffic lights and congestion pricing. A well-designed market should create incentives to guide when different compute jobs run. Through real-time spot markets, urgent jobs could pay more for capacity exactly when they need it. Through forward-looking futures markets, large but flexible jobs could secure low prices in advance. "