Big tech’s great AI power grab
Saudi Aramco, an oil colossus, is planning to splurge. Microsoft is likely to spend more. The comparison with the famously capex-happy energy industry is apt not just because of the sums involved.
AI needs vast amounts of processing power. And that processing power needs vast amounts of electricity. On May 2nd Bob Blue, chief executive of Dominion Energy, one of America’s biggest utilities, said that data-centre developers now regularly ask him for “several gigawatts" (GW).
Dominion’s total installed capacity is 34GW. JPMorgan Chase, a bank, calculates that Microsoft, Amazon’s cloud arm (AWS), Alphabet, Meta and Microsoft consumed 90 terawatt-hours (TWh) of electricity in 2022, as much as Colombia. And that was mostly before ChatGPT set off the AI revolution in November that year.
The ensuing hoopla led the the International Energy Agency (IEA), an official forecaster, to predict that data centres (including those dedicated to AI and equally energy-hungry cryptocurrencies) will gobble up more than 800TWh globally in 2026, more than double the amount in 2022 (see chart). BCG, a consultancy, reckons that data processing could triple its share of American power consumption by 2030, to 7.5%. And not just any power will do.
The technology titans want theirs to be clean. In April their industry association warned Georgia Power, which had managed to fast-track the approval of 1.4GW of new fossil-fuelled generation by pointing to rising demand from data centres, that its members would build fewer of these in the southern American state if the utility spewed extra carbon. Combined with rising demand from increasingly electrified transport, heating and parts of heavy industry, digital technology’s power needs are putting enormous
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