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Richie Olsten has been in Maui’s helicopter tour business for a half century, so long he’s developed a barometer for the tourism-dependent economy: rental cars parked at the island’s airport.

There are so many since wildfires killed at least 115 people in the historic town of Lahaina that Olsten is worried about a full-blown economic catastrophe. Restaurants and tour companies are laying off workers, and unemployment is surging.

State tourism officials, after initially urging travelers to stay away, are now asking them to come back, avoid the burn zone and help Maui recover by spending their money. Airlines have started offering steep discounts, while some resorts have slashed room rates by 20% or are offering a fifth night free.

“I know what a terrible disaster that was. But now we’re in crisis mode,” Olsten said. “If we can’t keep the people that have jobs employed, how are they going to help family members and friends that lost everything?”

The number of visitors arriving on Maui sank about 70% after the Aug. 8 fire, down to 2,000 a day.

Olsten’s Air Maui Helicopters now operates one or two flights a day, compared with 25 to 30 before the fires.

As Air Maui’s director of operations, Olsten said his company has laid off seven of its 12 dispatchers. Pilots have been spared because they only get paid when they work. Typically, they fly eight times a day, four to five days a week. That has fallen to one day a week, and only one or two flights.

Many Maui hotels are housing federal aid workers and Lahaina residents who lost their homes. Even so, only half of available hotel rooms are occupied, said Mufi Hannemann, president of the Hawaii Lodging & Tourism Association.

Even those in South Maui, 48 kilometers south of Lahaina, are half empty. Hannemann called the situation “pretty grim.”

One of Maui’s most venerable restaurants, Hali’imaile General Store, laid off about 30 workers and temporarily closed after business shrank to one-tenth of pre-fire levels.

“It just fell off a cliff,” said Graeme Swain, who owns the place with his wife, Mara.

They cut staff to preserve cash and spare Hali’imaile the fate of the San Diego software company Swain was running in 2008. When the housing bubble burst and the U.S. plunged into recession, he kept all employees “to the bitter end,” crushing the business.

Swain wants Hali’imaile — which was founded as a general store for pineapple plantation workers a century ago and became a restaurant in 1987 — to last decades more.

“It takes a lot of soul-searching of what’s the right thing to do to protect that place,” said Swain, who plans to hire everyone back. He aims to reopen next month.

Mass layoffs are showing up in government data. Nearly 8,000 people filed for unemployment on Maui during the last three weeks of August compared with 295 during the same period in 2022.

University of Hawaii economists expect Maui’s jobless rate to climb as high as 10%. It peaked at 35% during the COVID-19 pandemic, but in July was just 2.5%. And this time, there are no pandemic-era Paycheck Protection Program loans for businesses, nor any enhanced unemployment checks for the jobless.

Clothing designer Gemma Alvior estimates that locals make up almost all the clientele at her Kahului store, Pulelehua Boutique. But that may not shield her in a place where the tourism industry accounts for 75% of private sector jobs.

“If they don’t have a job, they’re getting laid off, how are they going to buy stuff?” she said. “What do they need to buy clothes for if they’re not working?”

One reason visitor traffic plunged is that Hawaii’s leaders, joined by Hollywood celebrities, told travelers to vacate the island.

The day after the fire, the Hawaii Tourism Authority, a quasi-state agency, said visitors on “non-essential travel are being asked to leave Maui” and that “non-essential travel to Maui is strongly discouraged.”

The agency said the community needed to focus on recovery and helping those who had to evacuate.

Around the world, people saw video and photos of travelers jamming the Kahului airport to board flights out.

That message has since changed.

“Maui’s not closed,” Mayor Richard Bissen said in a recent interview.

People shouldn’t go to Lahaina or the surrounding West Maui area — “It’s not a place to stare,” Bissen said — but the rest of Maui needs tourists. “Respect the West, visit the rest,” is the motto some have adopted.

The Hawaii Tourism Authority drafted and publicized a map showing Lahaina and West Maui in relation to the rest of the island, highlighting just how much was still open. The authority is also launching a $2.6 million marketing plan to lure tourists back.

Two days after the fire, Jason Momoa, a Hollywood actor and Native Hawaiian, told his 17 million Instagram followers, “Do not travel to Maui.” More recently, he advised: “Maui is open. Lahaina is closed.”

Travel to areas outside West Maui should return to pre-fire levels by Thanksgiving, predicted Carl Bonham, an economics professor at the University of Hawaii at Manoa. Discounted airfares and marketing appeals should help, he said.

Gov. Josh Green told a meeting of the state Council on Revenues that he expects authorities to reopen most of West Maui to travelers on Oct. 8, with the exception of fire-damaged neighborhoods. The area, which includes beach resorts in Kaanapali, north of historic Lahaina, has 11,000 hotel rooms. That’s half Maui’s total.

The disaster prompted state officials on Wednesday to lower their 2023 economic growth prediction for the entire state to 1.1%, down from 1.8%. Next year, they expect 1.5% growth instead of 2%.

Bonham estimated the fires would depress state tax revenues by $250 million this fiscal year but said he was “encouraged” by the plan to reopen West Maui in one month.

The council, which produces tax revenue forecasts, predicted Thursday that state tax revenue would rise 1.3% during the current fiscal year compared with last year. The governor and lawmakers are required to use the panel’s forecasts to draft their budgets.
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The cost of building an artificial intelligence product like ChatGPT can be hard to measure.

But one thing Microsoft-backed OpenAI needed for its technology was plenty of water, pulled from the watershed of the Raccoon and Des Moines rivers in central Iowa to cool a powerful supercomputer as it helped teach its AI systems how to mimic human writing.

As they race to capitalize on a craze for generative AI, leading tech developers, including Microsoft, OpenAI and Google, have acknowledged that growing demand for their AI tools carries hefty costs, from expensive semiconductors to an increase in water consumption.

But they’re often secretive about the specifics. Few people in Iowa knew about its status as a birthplace of OpenAI’s most advanced large language model, GPT-4, before a top Microsoft executive said in a speech it “was literally made next to cornfields west of Des Moines.”

Building a large language model requires analyzing patterns across a huge trove of human-written text. All that computing takes a lot of electricity and generates a lot of heat. To keep it cool on hot days, data centers need to pump in water — often to a cooling tower outside its warehouse-sized buildings.

In its latest environmental report, Microsoft disclosed that its global water consumption spiked 34% from 2021 to 2022 (to nearly 1.7 billion gallons, or more than 2,500 Olympic-sized swimming pools), a sharp increase compared to previous years that outside researchers tie to its AI research.

“It’s fair to say the majority of the growth is due to AI,” including “its heavy investment in generative AI and partnership with OpenAI,” said Shaolei Ren, a researcher at the University of California, Riverside, who has been trying to calculate the environmental impact of generative AI products such as ChatGPT.

In a paper due to be published later this year, Ren’s team estimates ChatGPT gulps up 500 milliliters of water (close to what’s in a 16-ounce water bottle) every time you ask it a series of between 5 to 50 prompts or questions. The range varies depending on where its servers are located and the season. The estimate includes indirect water usage that the companies don’t measure — such as to cool power plants that supply the data centers with electricity.

“Most people are not aware of the resource usage underlying ChatGPT,” Ren said. “If you’re not aware of the resource usage, then there’s no way that we can help conserve the resources.”

Google reported a 20% growth in water use in the same period, which Ren also largely attributes to its AI work. Google’s spike wasn’t uniform — it was steady in Oregon, where its water use has attracted public attention, while doubling outside Las Vegas. It was also thirsty in Iowa, drawing more potable water to its Council Bluffs data centers than anywhere else.

In response to questions from The Associated Press, Microsoft said in a statement this week that it is investing in research to measure AI’s energy and carbon footprint “while working on ways to make large systems more efficient, in both training and application.”

“We will continue to monitor our emissions, accelerate progress while increasing our use of clean energy to power data centers, purchasing renewable energy, and other efforts to meet our sustainability goals of being carbon negative, water positive and zero waste by 2030,” the company’s statement said.

OpenAI echoed those comments in its own statement Friday, saying it’s giving “considerable thought” to the best use of computing power.

“We recognize training large models can be energy and water-intensive” and work to improve efficiencies, it said.

Microsoft made its first $1 billion investment in San Francisco-based OpenAI in 2019, more than two years before the startup introduced ChatGPT and sparked worldwide fascination with AI advancements. As part of the deal, the software giant would supply computing power needed to train the AI models.

To do at least some of that work, the two companies looked to West Des Moines, Iowa, a city of 68,000 people where Microsoft has been amassing data centers to power its cloud computing services for more than a decade. Its fourth and fifth data centers are due to open there later this year.

“They’re building them as fast as they can,” said Steve Gaer, who was the city’s mayor when Microsoft came to town. Gaer said the company was attracted to the city’s commitment to building public infrastructure and contributed a “staggering” sum of money through tax payments that support that investment.

“But, you know, they were pretty secretive on what they’re doing out there,” he said.

Microsoft first said it was developing one of the world’s most powerful supercomputers for OpenAI in 2020, declining to reveal its location to the AP at the time but describing it as a “single system” with more than 285,000 cores of conventional semiconductors and 10,000 graphics processors — a kind of chip that’s become crucial to AI workloads.

Experts have said it can make sense to “pretrain” an AI model at a single location because of the large amounts of data that need to be transferred between computing cores.

It wasn’t until late May that Microsoft’s president, Brad Smith, disclosed that it had built its “advanced AI supercomputing data center” in Iowa, exclusively to enable OpenAI to train what has become its fourth-generation model, GPT-4. The model now powers premium versions of ChatGPT and some of Microsoft’s own products and has accelerated a debate about containing AI’s societal risks.

“It was made by these extraordinary engineers in California, but it was really made in Iowa,” Smith said.

In some ways, West Des Moines is a relatively efficient place to train a powerful AI system, especially compared to Microsoft’s data centers in Arizona, which consume far more water for the same computing demand.

“So if you are developing AI models within Microsoft, then you should schedule your training in Iowa instead of in Arizona,” Ren said. “In terms of training, there’s no difference. In terms of water consumption or energy consumption, there’s a big difference.”

For much of the year, Iowa’s weather is cool enough for Microsoft to use outside air to keep the supercomputer running properly and vent heat out of the building. Only when the temperature exceeds 29.3 degrees Celsius (about 85 degrees Fahrenheit) does it withdraw water, the company has said in a public disclosure.
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