How the Iran War could impact data centers and AI builds. Why it’s time for nuclear microgrids. A key to breeding drought-resistant plants. All that and more in this week’s edition of The Prototype. All that and more in this week’s edition of The Prototype. To get it in your inbox, sign up here.

The headlines stemming from Iran’s blockade of the Strait of Hormuz are laser focused on oil prices–and with good reason. They don’t just affect the price at the pump but the price of everything else. (A similar oil price spike led to the stagflation of the 1970s.) And there’s no way to easily compensate for the supply that’s not able to leave the Middle East.

But beyond oil prices, the Iran conflict also poses some serious difficulties for the AI boom, especially in South Korea. That country’s semiconductor manufacturers are facing a one-two punch–not only do they rely on natural gas from the Middle East, they also crucially rely on its helium, which is required for making chips. About one-third of the world’s helium comes from Qatar, and that’s now inaccessible with no real way to restore supply.

Shortages of helium and energy in South Korea will cascade across the entire tech economy. Samsung and SK Hynix dominate memory chips–they produce more than half of the world’s supply. That memory is needed for everything from cell phones to automobiles, so expect consumer prices to climb as shortages start to ripple through supply chains.

Crucially, the data centers powering the AI boom–already a source of billions of dollars in capital expenditure–will feel that memory price shock in a big way. Companies like OpenAI and Anthropic have reported rising revenue, but it’s yet not enough to cover expenses by a long shot. Now it’s about to get more expensive.

Don’t expect this crisis to be short-lived, either. Iran has significant leverage despite its diminished military capability. Through drone warfare, the nation has effectively weaponized the insurance industry to halt shipping. It doesn’t need to go toe-to-toe with the U.S. Navy and its costs are a fraction of what the United States incurs. It’s not clear how long Tehran can hold out, but right now it doesn’t look like there’s an immediate end in sight.

Discovery of the Week: Drought-Resistant Genetics

As the planet gets hotter, droughts become more frequent. That’s a challenge for farmers, who have to supplement with expensive irrigation when there’s not enough rain for their crops.

The foundation for one solution to this problem may have just been laid. In a new paper published this week, researchers from the Salk Institute published an atlas exploring how droughts impact plant cells. It will give biologists a better handle on understanding how a lack of water affects plants so they can breed better varieties. To that end, the researchers also discovered a crucial gene that could be targeted to make crops more resilient to droughts.

The key has to do with a plant’s leaves. Droughts cause them to age more quickly, which has a cascading effect that hurts the entire plant. The new gene discovery, however, could potentially allow scientists to breed plants that continue to grow during mild droughts, which would prevent the plants from being stunted–a common problem in drought-resistant varieties. That “would preserve important crop yield for farmers,” researcher Joseph Swift said.

The Hot Take: It’s Time For Nuclear Microgrids

Each week, I ask investors for their take on tech trends within their industries. Today I’m featuring thoughts from Bradley Tusk, cofounder and Managing Partner of Tusk Venture Partners, which “invests solely in early stage startups in highly regulated industries.”

“We’ve been talking about ideas like microgrid nuclear for a long time but now that data centers are needed to power AI, this may be the moment where it actually starts to happen. I believe that states will not allow new data centers to be built unless they do not raise energy prices on everyone else, and that means data centers either providing their own onsite power through using more energy efficient chips, or ideas like microgrid nuclear. That need should cut through a lot of the politics and red tape that have been an obstacle for years.”

Quantum Trailblazers: This year’s A.M. Turing Award (essentially the Nobel for computer science) was awarded to Charles Bennett and Gilles Brassard for their development of quantum cryptography.

Uploading a Fruit Fly Brain: In October 2024, I noted in this newsletter that scientists had successfully mapped the brain of the fruit fly. Now a company called Eon says they’ve used that map to create a simulation of a fruit fly, which predicts motor behavior with about 95% accuracy. It’ll be interesting to see what other discoveries stem from that.

What’s Entertaining Me This Week

March Madness is upon us, which means that we’re all waiting with bated breath to see just how quickly our brackets will be ruined. Life kept me from following college basketball as closely this year. I called on Anthropic’s Claude to help me put a few together. I didn’t ask it to make any brackets on its own, but I did develop several iterations that had certain assumptions reflecting my own basketball biases baked in. It turned out some interesting predictions, so I’ll be interested to see how they do.

© Forbes