The rapid expansion of artificial intelligence (AI) is causing a substantial surge in energy consumption by data centers, sparking concerns about the potential strain on global power grids and the impact on decarbonization efforts.
Recently, tech industry leaders urged the United States Congress to increase energy production to meet the growing demand driven by AI. The energy footprint of data centers is expected to continue growing significantly in the coming years, prompting industry insiders to lobby for enhanced energy production to maintain the competitiveness of the U.S. tech sector against China.
“We need energy in all forms,” stated Eric Schmidt, former Google CEO and current head of the Special Competitive Studies Project, a think tank focused on technology and security. “Renewable, nonrenewable, whatever. It needs to be there, and it needs to be there quickly.”
Supplying sufficient energy to meet AI’s increasing needs without compromising domestic energy security is a bipartisan priority. However, partisan disagreements exist regarding the approach. In 2023, President Joe Biden signed an executive order aimed at governing the development and use of AI safely and responsibly. Shortly after taking office this year, Donald Trump overturned the order, citing its “onerous” mandates as a threat to American technological leadership. Instead, Trump is advocating for an approach that prioritizes “securing and advancing American AI dominance” with less emphasis on responsible development.
The global AI arms race is anticipated to require enormous amounts of electricity. According to the International Energy Agency (IEA), data centers accounted for approximately 1.5% of global electricity consumption in 2024. The IEA projects that this figure will double by 2030, with data centers expected to consume 945 terawatt-hours (TWh) of electricity, roughly equivalent to Japan’s current annual electricity consumption.
This sharp increase in energy demand is already straining power grids worldwide. Several countries, including Ireland, Saudi Arabia, and Malaysia, lack the necessary energy production capacity to support their planned data centers. In the United States, a recent study suggests that the government would need to invest billions of dollars in generation and transmission capacity over the next few years to meet the growing demand. Failure to do so could result in energy costs rising by up to 70% for Americans.
The growing energy demand also poses a significant challenge to global climate accords, potentially leading to increased fossil fuel production. Google has acknowledged that powering its AI ambitions may be incompatible with its goal of achieving net-zero emissions by 2030. The company reported a nearly 50% increase in carbon emissions over the past five years in 2024.
“When you look at the numbers, it is staggering,” observed Jason Shaw, chairman of the Georgia Public Service Commission. “It makes you scratch your head and wonder how we ended up in this situation. How were the projections that far off? This has created a challenge like we have never seen before.”
However, some experts argue that concerns about AI causing a global power grid collapse and derailing decarbonization efforts are overstated. They believe that technological advancements will significantly reduce the strain on power grids as the industry races to make AI more efficient.
Christina Shim, IBM’s sustainability chief, wrote in a recent Fortune op-ed, “Raising a flag over AI’s energy use makes sense. It identifies an important challenge and can help rally us toward a collective solution. But we should balance the weight of the challenge with the incredible, rapid innovation that is happening.”
