Thanks to AI, Data Centers Will Drive Half of Electricity Demand Growth in the US

Fueled by the rise of AI, data centers will account for nearly half of electricity demand growth in the US between now and 2030, according to a new report from the International Energy Agency.

By the end of the decade, the US will use more electricity for data centers than for the production of aluminum, steel, cement, chemicals, and “all other energy-intensive goods combined,” the report finds.

The news comes as Big Tech is making huge investments in AI-focused data centers across the US. Over the past year, Elon Musk’s xAI has announced plans to expand its Colossus supercomputer in Memphis, Tennessee, to at least a million GPUs—much to the displeasure of residents who claim its gas-fired onsite turbines are polluting the air.

Meanwhile, ChatGPT maker OpenAI, Oracle, and Softbank in January announced a joint venture known as Stargate that plans to invest $500 billion over the next four years to develop AI data centers and generate electricity for AI across the US.

Microsoft, however, recently announced it would “not be moving forward” with plans to build data centers in Ohio.

Globally, the report predicts that the energy consumption from data centers is set to more than double by 2030. Data centers will reportedly use 945 terawatt-hours (TWh) annually in 2030 (more than the whole of Japan), up from 415 TWh in 2024. But this huge spike in energy consumption isn’t set to be distributed equally. The report found that the United States will account for the largest share of this projected increase, followed by China.

This AI-driven demand for energy from data centers could cause knock-on environmental issues, according to some academics. Alex de Vries, a researcher at VU Amsterdam, told the science journal Nature that it “could be a serious risk for our ability to achieve our climate goals” and “increase our reliance, or at least extend, our reliance on fossil fuels.”

In April 2024, MIT researcher Robert Stoner told PCMag that energy companies might be reluctant to build facilities for AI data centers. “Utilities really don’t like adding renewable power plants to their systems,” he said. “They stress them, they add a lot of peak current at times of the day that are not the same as they are if the system doesn’t have those sources.”

Many US politicians are also concerned about the environmental impact. In December, New York state Sen. Kristen Gonzalez introduced a bill that would force data center operators to fuel their facilities with amounts of renewable energy that align with the state’s environmental goals and produce an annual report on both their water and energy consumption.

About Will McCurdy

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I’m a reporter covering weekend news. Before joining PCMag in 2024, I picked up bylines in BBC News, The Guardian, The Times of London, The Daily Beast, Vice, Slate, Fast Company, The Evening Standard, The i, TechRadar, and Decrypt Media.

I’ve been a PC gamer since you had to install games from multiple CD-ROMs by hand. As a reporter, I’m passionate about the intersection of tech and human lives. I’ve covered everything from crypto scandals to the art world, as well as conspiracy theories, UK politics, and Russia and foreign affairs.

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