Image by Jonathan Bowers, from Unsplash

AI Weather Model Reshapes Energy Trading

• Written by Kiara Fabbri Former Tech News Writer
• Fact-Checked by Sarah Frazier Former Content Manager

A new AI-driven weather model developed by the European Centre for Medium-Range Weather Forecasts (ECMWF) is beginning to influence how energy traders operate in increasingly volatile markets, as first reported by Bloomberg .

In a Rush? Here are the Quick Facts!

• AI forecasts are generated in three minutes versus 30 minutes for traditional models.
• Traders use these forecasts to anticipate market shifts in power and gas.
• AI models still face challenges in predicting cloud cover and extreme weather events.

The model, which incorporates historical data alongside conventional meteorological measurements, is designed to enhance the accuracy and speed of weather predictions.

Every night in Bologna, Italy, supercomputers at the ECMWF analyze massive atmospheric data to create weather forecasts. Released six hours later, these predictions have long guided power and gas traders in managing energy supply and demand, according to Bloomberg.

The introduction of AI forecasting, however, marks a shift in approach, offering results in a fraction of the time.

“We can update our information set more often than we are used to,” said Daniel Borup, chief executive officer of Danish trading firm InCommodities A/S, as reported by Bloomberg. “That obviously leads to improvements in our predictions. It allows us to improve our job and distribute energy better,” he added.

Bloomberg says that the AI model, released last month, is the first of its kind developed by a major forecasting institution.

Unlike traditional simulations that rely solely on satellite and sensor data, the new system incorporates patterns from past weather events, allowing for more precise predictions of temperature, precipitation, wind conditions, and even tropical cyclones.

Initial testing suggests the AI-generated forecasts perform at least as well as conventional models while requiring less computing power, as reported by Bloomberg.

Traders and policymakers are particularly interested in its potential applications for managing renewable energy output, where sudden shifts in wind and solar generation can affect electricity prices, as noted by Bloomberg.

This has been evident in recent months. Earlier this year, a prolonged period of low wind and solar generation—known as a Dunkelflaute—led to price surges in Germany. More recently, an oversupply of solar power resulted in negative electricity prices, as reported by Bloomberg.

The forecasting model’s faster output could improve market responsiveness. “It’s what the markets move on most,” said Dan Harding, a meteorologist at European weather analytics firm MetDesk, reports Bloomberg.

The AI system’s ability to generate forecasts in three minutes, compared to the 30 minutes required by traditional computing models, could allow for quicker decisions in energy trading and grid management.

Bloomberg notes that despite its advantages, experts note that AI forecasting has limitations. It remains less reliable than traditional models in predicting cloud cover, dust, and certain extreme weather patterns. ECMWF forecasters anticipate a gradual transition toward hybrid forecasting methods, combining AI with conventional approaches.

“AI weather models have the potential to increase the frequency of forecast updates and improve performance,” said Edoardo Simioni, head of trading at Copenhagen-based electricity supplier Reel ApS, as reported by Bloomberg. “The advances in technology are ultimately good for the market,” he added.

Photo by Markus Winkler on Unsplash

Scale AI Under Investigation By U.S. Department Of Labor For Fair Pay Practices

• Written by Andrea Miliani Former Tech News Expert
• Fact-Checked by Sarah Frazier Former Content Manager

The U.S. Department of Labor (DOL) is investigating the American data-annotation and AI–training startup Scale AI for possible Fair Labor Standards Act vioations.

In a Rush? Here are the Quick Facts!

• The U.S. Department of Labor is investigating Scale AI for potential violations of federal labor laws.
• Scale AI has faced past accusations of worker exploitation, including lawsuits over misclassification and wage issues.
• Despite legal scrutiny, Scale AI continues expanding, securing government contracts in the U.S. and Qatar.

According to TechCrunch , the investigation has been active since 2024 but the company hasn’t been accused of any law violation yet.

The law regulates employment aspects such as illegal retaliation against workers, minimum wage, unpaid wages, and misclassification of employees as contractors.

Scale AI, founded in 2016 and backed by Nvidia and Microsoft, has been previously accused of exploitation of Kenyan workers to train AI through the platform Remotasks, making them quit operations in the country as complaints grew.

Other ex-workers in the United States have filed a lawsuit against the company for violating minimum wage rates and misclassification of employees as contractors.

Joe Osborne, Scale AI spokesperson, told TechCrunch that the current investigation was initiated under the previous administration and that the company’s system had been misunderstood by previous regulators.

Alexandr Wang, CEO and founder of Scale AI, attended President Trump’s inauguration in January and signed a contract with the U.S. government to support military planning this week.

Osborne assured that they have been collaborating with the DOL to meet requirements and explain their gig-based business model. “Hundreds of thousands of people use our platform to showcase their skills and earn extra money,” he said.

The startup is based in San Francisco and has shown significant growth in the past few years. Scale AI was valued at $13.8 billion last year, and has been expanding its partnerships since then. Just a few days ago, the company also signed a new contract with Qatar to improve and modernize government services during the next five years.