Artificial intelligence (AI) is at the forefront of technological advancement, but its rapid evolution brings significant challenges, particularly for our global energy systems. As AI continues to propel economic innovation and business transformation, the immense electricity demands this technology requires are prompting policymakers, tech companies, and energy providers to rethink how they construct and maintain power infrastructures.
The demand for electricity from data centers is skyrocketing, with projections suggesting it will more than double by 2030, reaching around 945 terawatt-hours. This volume is equivalent to Japan’s current total electricity consumption, as noted by the International Energy Agency (IEA). Disturbingly, AI is identified as the principal driver of this surge, with electricity needs from AI-optimized data centers expected to increase more than fourfold within the same period.
This growth is particularly pronounced in the United States. McKinsey forecasts that electricity consumption by US server farms will surpass 600 terawatt-hours by 2030, reflecting the surge in new facilities required to support AI technologies like ChatGPT, autonomous vehicles, and sophisticated robotics. These systems interact with billions of users daily, further emphasizing the growing reliance on AI.
In the US alone, data center energy consumption is projected to account for nearly half of all electricity demand growth by 2030. The situation poses immediate pressures on local grids, particularly in regions where data centers are concentrated. For instance, in Virginia, data centers already consume a staggering 26% of the state’s electricity, while in Dublin, Ireland, the figure escalates to 79%.
The infrastructure challenges posed are significant. A typical AI data center consumes as much electricity as 100,000 households. Even more startling, the largest data centers presently under development are anticipated to consume up to 20 times more electricity. In addition, they harness billions of gallons of water annually for cooling systems to ensure the optimal performance of their computer hardware.
Despite these challenges, the economic stakes justify investment in AI technologies. According to scenarios presented in the International Monetary Fund’s (IMF) April 2025 World Economic Outlook, AI has the potential to elevate the average pace of global economic growth, potentially boosting GDP by approximately 0.5% each year between 2025 and 2030.
Addressing the balance between growth and sustainability is crucial moving forward. Currently, renewables account for 27% of the electricity consumed by data centers, with expectations of that figure rising to 50% by 2030, primarily through advances in wind and solar energy. However, natural gas and nuclear energy are also set to play vital roles in meeting this growing electricity demand.
Under the prevailing energy policies, the surge in electricity demand driven by AI could result in an additional 1.7 gigatons of global greenhouse gas emissions by 2030. However, this forecast should be viewed through the lens of its social cost, which remains relatively lower compared to the anticipated economic upsides of AI development.
This scenario presents a shared responsibility for policymakers and businesses alike. Governments must focus on upgrading transmission infrastructure and diversifying energy sources, while tech companies need to commit to enhanced efficiency and ongoing investments in renewable energy. Without a synchronized approach, energy limitations may pose a significant barrier, impeding AI’s economic potential, particularly in developing nations where electricity supply is already stretched thin.
The reality is that AI will undoubtedly reshape global energy systems. The pressing question now is whether nations and corporations can responsibly navigate this transformation. The focus must be on creating sustainable pathways that can support the remarkable potential of AI while safeguarding our environmental future.