Apr 30, 2024 - Energy & Environment

Spire Global strikes mystery deal to boost AI in forecasting

Illustration of a satellite flanked by hundred dollar bills for solar panels

Illustration: Annelise Capossela/Axios

Spire Global, a firm that utilizes data from its satellites and leverages artificial intelligence to generate weather forecasts, is turning to the financial sector for customers.

Driving the news: The firm on Monday announced a deal with an unnamed financial firm that it says is priced in the multimillion-dollar range. It signals how quickly new technology is reshaping a critical industry.

  • A Spire spokesperson declined to give Axios more information on the deal.

Zoom in: According to a statement, Spire will provide the firm with its high-resolution weather forecast model, which utilizes data gathered from space while also developing an AI-powered model for long-range forecasting.

  • The company is one of multiple weather and climate companies to enter into partnerships with Nvidia to develop a computer modeling platform, as well as train and run AI-based weather models.
  • The company is using a version of Nvidia's Earth-2 "digital twin" model to create its own custom AI model.

The intrigue: AI-based weather and climate models have several advantages over traditional, physics-based ones.

  • Speed is a huge one, since they can be run far faster and do not require supercomputers to crunch their data.
  • Most AI weather and climate models are trained on historical data and use it as a basis for predicting future conditions.
  • The field is in early days, but AI models have proven to be nearly as accurate as physics-based tools, if not more so in certain situations. They are rapidly being rolled out in public and private sector scenarios.

Yes, but: Many of these companies say they are leveraging AI to produce more accurate forecasts, though their models are essentially a black box.

  • In the case of Spire, the model and the business deal are a black box, illustrating the murky conditions the AI revolution may be pushing weather and climate companies into.
  • Spire is publicly traded, so it wants to let its shareholders know that it is inking big deals; yet it is doing so in this case without including any specifics.

What they're saying: "Having spent my career in the field of weather, I'm amazed at the rapid pace by which we're seeing AI transform weather forecasting, especially when paired with proprietary data that can only be collected from space," Michael Eilts, general manager of weather and climate at Spire, said in a statement.

  • He noted climate change's role in making some types of extreme weather events more common and/or severe.

Between the lines: Companies like Spire tend to market their services to the financial sector to help them get ahead of potential market movements, while also pursuing other business lines in transportation, agriculture, energy and logistics.

  • This is not new to the weather industry.
  • However, thanks to the vertical integration of data, proprietary satellites and other sources — along with a custom AI-driven model — is a relatively unique play.
  • Spire's competitors include Tomorrow.io — which also has its own satellite network, Verisk Analytics, Meteomatics, The Weather Company and IBM, among others.

What we're watching: How quickly AI techniques push weather and climate forecasting into uncharted waters.

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