The AES Corporation has a strategic partnership with AI Fund (a venture studio founded by global AI leader Andrew Ng) aimed at accelerating the energy transition through artificial intelligence. This collaboration will focus on co-building companies that leverage AI to address current energy challenges and promote a greener, smarter future
Background & Context
Market Landscape: The energy sector is undergoing a significant transformation, driven by the growing emphasis on renewable energy and sustainability. Artificial intelligence (AI) is evolving at an unprecedented rate, enabling it to play a crucial role in this transition.
Initial Business Priorities: Focus areas of the partnership include enhancing renewable energy operations, improving worksite safety, and streamlining how renewable projects access financing.
Challenges & Opportunities
Key Challenges: The energy industry accounts for 18% of the Fortune 500 (by revenue) (https://eqvista.com/fortune-500- 2024 Fcompanies-in-the-us/), and yet only 2% of start-ups focus on the energy sector (https://www.iea.org/data-and-statistics/data-tools/energy-start-up-data-explorer).
Opportunities: AES generated a list of more than 100 ideas sourced from internal stakeholders, before paring that list down to 12 that have the potential to be a differentiated business of venture-backable scale. AES has been working with AI Fund to validate the technical and market feasibility of each of these ideas, while continually refreshing the list based on new ideas from AES experts.
Strategic Priorities & Approach
Priority 1
Incubate AI-based businesses whose solutions can deliver benefit to AES and other companies.
Priority 2
Work closely with those companies to implement and scale their solutions at AES to ensure benefits are realized.
Priority 3
Support the commercial expansion of the companies beyond AES.
Actions Taken
Each of the companies co-built by AES Corporation and AI Fund underwent a rigorous process in deep collaboration with AES experts. This process was designed to ensure that the needs each company is addressing is not being met by existing solutions and would create substantial value for AES and other companies. Through rapid prototyping and continuous feedback and validation from AES experts, we confirmed that AI could effectively solve these problems, providing innovative and differentiated solutions.
Results & Impact
To date, AES and AI Fund have co-founded two companies who have received funding and are currently developing commercial products to be deployed at AES in 2025. These solutions are expected to provide AES millions of dollars of recurring benefits in increased revenue and reduced costs
Lessons Learned
The partnership between AI Fund and AES has provided several key insights that will shape future priorities and initiatives. One significant lesson is the benefit of using AI for rapid prototyping. By leveraging AI, the team was able to quickly develop and test new solutions, accelerating the innovation process and reducing time to market. Additionally, thoughtful user experience (UX) design is crucial to enable adoption and effective human-in-the-loop interactions. Finally, we learned that AES needed to create snapshots of intermediate states in systems of record in order to enable AI-based process automation.
Future Outlook
The solutions developed by these co-built companies are set to be scaled across AES globally, enhancing the company's renewable energy operations and worksite safety on a larger scale. This expansion will not only support the commercial growth of these companies by attracting additional customers but also solidify AES's position as a leader in the energy sector. Furthermore, the partnership will continue to foster innovation by co-building new companies, leveraging advanced AI technologies to address emerging energy challenges and drive sustainable growth.
Key Quotes & Testimonials (Optional, but nice to have)
"AES has a history of partnering with industry leaders to bring innovation to the energy sector," said Andrés Gluski, AES President and CEO. "Our collaboration with AI Fund exemplifies this strategy. By combining our expertise of the power sector with AI Fund's expertise in artificial intelligence, we are uniquely positioned to lead the energy transition with AI-powered innovations that will benefit not only our portfolio but the entire industry."
Photos and videos related to the topic of the case study
Video of Andrew and Andres fireside chat at Spark (posted on this page):