Telenor's Kaaren Hilsen on Launching Norway’s First AI Factory - Ep. 247

0:10Hello, and welcome to the NVIDIA AI Podcast. I'm your host, Noah Kravitz. In late 2024, the Telenor AI Factory was officially launched. The AI Factory is Norway's first sustainable, sovereign, and secure generative AI cloud service designed to enhance AI adoption for both internal operations and external customers, and to provide local AI computing capabilities to the Nordic region. With us to share the story behind the Telenor AI Factory and to discuss the impact responsible AI is set to have on the country of Norway and the Nordic region more broadly is Karin Hilson. Karin is the chief innovation officer and head of the AI factory at Telenor, and she's also set to speak at NVIDIA GTC 2025 as part of a session titled Accelerating Sovereign AI Factories, Insight from Telco Case Studies.

1:00Karin, welcome to the AI podcast, and thank you so much for taking the time to join us. Thanks, Noah. Wow, what an introduction. Well, you know, it's hard because I try to, you know, I want to give you your credit, give you your flowers, as they say. But our guests, and you're no exception, have done so much. It's hard to cram it all in there. But it's all genuine. We're delighted to have you on the podcast. It's great to be here, Nara. So before we get into the story of the AI factory, which I'm really excited to hear from you, maybe you can start by telling us a little bit about your own background and your journey into AI, and then we can talk about Telenor.

1:33Yeah, I mean, the journey into AI, I mean, do we all end up here? Right. It's a bit of the question, but my journey has maybe been short-lived. I've been working in the telco industry and with Telemal now for 25 years across the globe in many different continents and sort of moving back to Norway a couple of years ago. And in the last few years, I've been working very much with innovation, with sustainability and these things. And a bit of a fun fact, I was actually sort of read up the other day that in, was it 2023, that emissions that data centers have actually reached the same level as emissions as the global airline industry.

2:13And that was a bit of an eye opener for me. I don't know if it's fact or fiction, but it just sort of got me thinking. And I see with the AI now sort of driving demand and everything, the data center is going to increase. And then I was thinking, well, OK, but then we need to, how can we do this responsibly? And as I said, my journey to it, I was working a lot with sustainability and how we can actually use our digital infrastructure in the green shift. And then the vision of sort of democratizing AI and every nation is an AI sort of came in. And I thought, wouldn't it be cool if we could build a green AI factory?

2:51and it was very much sort of the passion I had around the sustainability, the need for AI, it just beautifully came together. And I remember in the summer sort of standing on the banks of the Thames with my friends at a pub in the UK and they said to me, oh, Karim, what are you doing at the moment? And I said, oh, yeah, I'm building a green AI factory. And they said, is that even possible? So I just love it. So it's sort of how I ended up. But I guess it's a passion to make ideas happen. Absolutely. You were working on sustainability previously in the telco industry? Yeah, I've had various roles, but I had a sort of passion to sort of, I was working with the critical infrastructure.

3:32I've had various CEO roles in Sweden, in Montenegro, I've been working in Asia. And as I said, moved back to Norway for private reasons and looking, what can we really sort of do now? And seeing more and more that the telco's critical infrastructure has such a key role in society. And I think this was one of my eye-opens during COVID. I think many of us sit and reflect, and I think all of us became so dependent on the critical infrastructure that we have and the digital infrastructure. So let's talk about the factory. Should we start on the sustainability angle? Should we start on sort of the commercial and sort of benefit of the factory to the community?

4:17How would you like to begin? Tell us the story of building the AI factory. I mean, I always like to sort of say the story always started with a vision. And it was that our sort of top executives of Telenor were meeting the sort of top executives in NVIDIA. I love this saying that there's sort of every country must own the production of their own intelligence. I sort of love that. And that sort of vision, then with the combination of Telenor, we're 170 years old. We've been running critical infrastructure in Norway for that time. That's amazing. It is just such a beautiful fit. And I just love this vision that we had, okay, that every country needs to sort of own his own intelligence and produce it.

4:59We need to do this in a responsible, sustainable way. And we need critical infrastructure to do this. So this was sort of the idea was then born. And I remember executives sort of coming back to Norway and sort of said to me, Karen, can you make this happen? And it's like, OK, do I have any funding? Do I have? No, no, just make it happen. It was like, OK, where do we start sort of thing? And everybody just said, just believe, believe. And this is where our journey started. And it's sort of, which angle do you sort of tackle it? And if anything, I was overwhelmed. And I think the only thing was certain is there was so much uncertainty, so many unknowns.

5:39And we very much then started the journey exploring, okay, is there a need for it in Norway? What's the level of maturity? You know, how can we build on this? And we started then working in sprints. Forgive me for interrupting, Karim, but when was this? How long ago? So this was, we started the journey in February, less than a year ago. Less than a year ago. It's amazing how fast things are moving. Yeah, it was. Even when I say, do you know, I feel like I've been working on a lifetime, but it's just sort of a year ago. And we started looking at the market. We started looking, okay, what is our go-to-market proposition?

6:19You know, what equipment do we need? And what data center do we do it in? and all these sort of questions were coming up. And this is quite early on. We said, okay, you know, telcos are fantastic, but they maybe haven't got the best reputation for moving fast. So it's like, how could we do it? And this is where we said, okay, let's take a bit of a different approach. And even the basic thing I'm faced with, like, okay, I want to order our first sort of cluster to put in a data center, and I didn't have a legal entity to do this with. I mean, a very silly sort of internal governance. So we decided, okay, let's think like, set it up like a startup.

6:58We're going to set up a new company. So we set up a new legal entity. And we said, okay, we're going to be a startup. I said, I don't want a huge team. I don't want a huge program, which is going to sort of drag us down in corporate governance, slow decision making. So we sort of very said, okay, we're going to think like a startup. We set up then our first cluster. we caught together our go-to-market proposition. And then in August, we started to go talk to some customers out in the market and said, this is our proposition. We're going to have, we've got an offering where we can offer a sovereign, secure and sustainable air factory.

7:37What do you think? And this is sort of then where I think the fun really, really started. And I always say, I said to the organization as well, the decision makers, the next toll gate I'm going to come is when we've signed two customers. And I even remember standing on stage at an internal town hall. And one of the leaders said to me, Karim, what does success look like? At the end of the year, what does success look like? And I spontaneously said, yeah, we have two customers in our AI factory. And I was like, okay, that is right. And I said, yeah, we're going to have two customers, one internal and external and it was like okay so that became our our goal and this is where the team then were fully focused this is what we would then work towards was that hive autonomy the first external customer so hive is actually we actually started off saying we wanted teleno as uh our own internal customer okay because we said it was very good to sort of start with that to to learn build confidence, you know, make sure we're there before we dare go out and talk to other customers.

8:43Right, right. And this is where we pivoted quite early, saying we need more intel. If we just focus on one customer, and again, we did a lot of this in building the AI factory for our own needs. We saw this capability being fundamental for Telenor to accelerate its own AI journey as well. I mean, I mean, Telenor sits on a lot of critical information and data, which we need to secure, that it sort of stays within in Norway and is operated very, very securely. So we actually built the AI factory originally for our own needs, but we saw that there was also a demand outside Telenor. So we pivoted quite quickly saying we can do this in parallel, get one internal customer and one external customer.

9:29so we're working so very much sort of with with the telenoir operations to say okay they come on board and then as you mentioned hive autonomy were then the actual first external customer right okay we got aboard and and i think from both you know we're learning a lot from both our customers and we have an mvp product it's not perfect we we've set some design principles that the whole team words where we say speed over perfection. We always like to say that roughly right is better than precisely wrong. And again, in a telco, we are so, for years, we've been able to building, you know, perfect network.

10:07I mean, so we're part of our comfort zone here. And again, finding the right, what we call our MVP customers was quite critical. So we can have customers that can learn and grow with us. Are there currently specific use cases that you're tackling, whether on the internal side or, you know, that Hive or perhaps other external customers are interested in? What are some of the leading use cases? Yeah. So I think that the one thing all of them have in common, first of all, sort of very giant, they're all solving a specific problem. It's not just like, oh, yeah, we'll buy some GPUs and then we'll work out what we're going to do.

10:43Right, right, right. What can this chatbot do? Let's play around with it. Yeah, exactly. Which is what I think a lot of people want to do. So like Hive Autonomy, for example, I mean, they work with logistics, robotics. So they are actually innovating, I say, a lot of industries, whether it's ports, as I said, sort of factories or this sort of in their operations and have efficiency cases. So they have very specific customer needs that they are trying to solve. But the reason sort of why they were very interested in coming to the air factory is that they're sitting with sensitive data. So it was very keen.

11:22They wanted it to be really on Norwegian soil. The Telenor brand sort of represents security. So there's sort of a gain that really helps them. And then the sustainability part is super key. So that was sort of the combination of these three. Capgemini is also a customer of ours. They are developing products of doing voice-to-voice translation. And we can say, yes, that can be done. But these are for sensitive dialogues. Not all dialogues can go out in the cloud somewhere. These are very sensitive dialogues, if you think, within the health sector, within the police. So not so much on program, but again, it's sort of a safe, secure environment.

12:04And that's really key. And another customer is working a lot with the municipalities in Norway. In Norway, yeah. And again, with sort of sensitive cases that they sort of really would like their data to be secured. And the sustainability part of it. Right. And this is something that, again, as I said to you in my intro, I'm very, very passionate about. And while some people say AI can solve climate change sort of thing, I think with the increasing number of compute power and data centers that are needed, we have to be responsible and build data centers in a sustainable way. And this is also why Telenor is also building with several partners a state-of-the-art modern data center here in Oslo.

12:54So Telenor, in addition to the AI factory, is also partnered with a leading power company called Huffman and also a renewable energy investor called Hightech Vision are actually now building a super modern data center. And here is actually this is not just about using renewable energy sort of coming in, but it's also all the excess heat will actually go into district heating and actually heat up apartments and the surrounding area. So the heat coming out of the data center, you're going to capture it and redistribute it to heat homes in the area? Yes. I have very little, you know, physical world building and engineering capabilities.

13:33So it's a genuine question. Is that a tricky undertaking or is it? Yes, it is. And this is sort of a company which is sort of tele-nourish partnering that is taking all that. So I will say we're in awe. But I think what we need to provide is then sort of, again, the sort of the critical infrastructure, the connectivity, the security elements of it. And then being able to say to customers, and we're doing this in an energy efficient way. Our guest is Karin Hilson. Karin is the chief innovation officer and head of the AI factory at Telenor. And Karin, Telenor, we've talked Telenor Norway, Telenor Sweden, and forgive me, I should have asked this up front.

14:13How many countries, how big of an area does Telenor serve? Telenor, I mean, globally has over 200 million customers. We have footprints in the Nordics. So Telenor has a presence then in Norway, Sweden, Denmark, and Finland. And then we have a presence in Asia. Got it. So to get back to the AI factory and thinking about the use cases and such, are most of the use cases right now, and again, whether, you know, actually happening or sort of in the works, Are they centering around generative AI and large language models? Or is it kind of other forms of machine learning and AI? What's the buzz right now in terms of the sort of current and future-looking use cases for the factory?

14:57I would say that there is a lot of buzz that's still in the explorer to face, to be very open and honest. We forget. That's where we all are. We're still so early in all of this. Yeah. And I see that when we, there is definitely different maturity levels. I mean, when we talk to customers, the market and so many are, you know, exploring, you know, some very sort of super cool and forward leaning. Others are very much like, okay, again, going back to the, we're sitting on very critical data and everything. and it's used to being in our basement or under our desks and everything. But how can we sort of, we need more compute power and everything.

15:38And these are the kind of dialogues that we are having with customers, sort of how can we really secure the handling of their data in a very secure way? They can trust that it still stays on Norwegian soil, We still then are owning the production of intelligence, as we spoke about earlier. So I would say there is still the dialogues are still very much evolving around this. You've worked in different regions of the world and you currently do, as you were just speaking to. How similar or different are not just the laws and regulations, but sort of the common wisdom, the attitudes around responsible AI and data security, those kinds of things?

16:24And these are obviously, you know, new and evolving topics, Responsible AI specifically. How similar or different do you find conversations about these things as you work in different countries, different regions of the world? I would say they are very different. I say the similarity is that certainly around security and sovereignty. What I have seen just on the journey of the last two months is really increased. Yeah. We are onboarding one customer at the moment into the AI factory, and they sent us a list of 135 security questions. And this is sort of what we forget, you know, and again, these are becoming, you know, very, not just topical, but very sort of business critical questions as well.

17:11And this is back to, you know, why we started the journey with the AI factory. we saw that there was a bit of a hole in the market, if I can say that. We've been able to have sovereignty, security, and sustainability, all three together. And then using the sort of teleno-trusted brands when people trust us, we're reliable, is the sort of combination. I mean, one could say, if you just want compute capacity to build an open sort of model, go ahead and do that. But there is sort of really to move society forward as a whole. If it's in the health sector, within defense, within the public sector, we see that there are sensitive dialogues.

17:53We see that there are things. So we really see that the Telenor AI factory, together with our partnership with NVIDIA, can really help bring society forward. Absolutely. Because it's some of these dialogues, as you say, Noah, around sovereignty and security that are making people nervous. They're making people uncertain. Right. They're making people really look at their, you know, their fantastic IT, whatever that they've had for the last few years. So we've seen that there is definitely a change in climate, I would say, around the seriousness of the dialogues. It seems appropriate. Makes sense to me.

18:33All right, Karim, before we get to wrapping up, are there AI tools that you're finding particularly helpful or, you know, just that you're using regularly in your own life, be it work, outside of work? You don't have to go into the details of what, but are there any tools that, you know, you've been using regularly recently? I have to confess, probably that I use it most to help my kids with their homework. If they say I'm cheating, I always tell them they can't, but I need it. Or answer all the, you know, I have to, you know, to answer all the why questions and what it was. Yes. My older child tells me, actually, when he'll use it to sort of, it's almost the way that I use them.

19:10we talk about on the show, people using, especially folks in creative lines of work or doing creative projects that you'll do something and then send it to a chat bot to kind of get its take on it. And it kind of points out, oh, you missed this or, oh, here's another way to think about that kind of thing. So I don't think it's cheating myself, but you know. No, it's not cheating, but it helps get a dialogue because then exactly as you say, I then engage in discussions and we talk about whether it's right or wrong. And it is a fantastic, it actually, I find it actually is not cheating, I joke, but it actually is a trigger to get the dialogue going.

19:45Which is fantastic. That's great. Which isn't always easy with teenagers. No, no, it's not. No, it's not. All right. I want to give you time to talk about the vision going forward. You know, this began with a vision and it's a vision that's taking flight now. What are your hopes? What's your vision for the AI factory in the next? We're recording this in February 2025. So whatever time period makes sense, as we said, things are moving so fast, it's hard to know where AI will be in three years. But, you know, the next year, two years, five years, what are you, where are you taking the AI factory?

20:17Yeah, I mean, we certainly want to scale it. As I said, you know, we see we're starting in Norway, we see Norway has this need. And I really believe that we can really help empower society here in Norway through giving access to a place where different organizations, business, if it's the public sector, the private sector, can really innovate their businesses, make it more efficient, and really sort of going back to this and feel that, yes, we are really doing this in a sort of sustainable way. We're helping that. We know our data and it's safe. We can run these really sensitive cases. and it's sort of, again, back to this, I just love this, the production of the intelligence is here in Norway.

21:04So really, I do see the AI factory as being a very, maybe I'm being too, my vision is getting a bit, but the more I work with it, the more I see it can really help move societies forward and develop. Fantastic. That's what it's all about, if you ask me, but just my opinion. I fully agree. Karen Hilson, this was a pleasure. Thank you for taking the time and you'll be on the panel at GTC next month as we record this. So looking forward to that. And for folks listening who would like to find out more about the AI Factory, about Telenor, anything we've discussed, is there a good website, URL, social media?

21:42Where can listeners go online to learn more? Yeah, I mean, go onto the Telenor website. You'll find our Telenor AI Factory there. You can reach out to me on LinkedIn as well. So please, we welcome. We're on this journey together. As you say, that we're still very much in an explorative phase. So I'd love to hear from people. Fantastic. Well, again, Karin, thank you so much. It's been a pleasure. And all the best of luck with all the work you're doing. There's no better reason to employ AI than to bring us all forward, as you said. So all the best. Thanks, Snow.

22:27Thank you.

22:57Thank you.