Artificial intelligence (AI) is on the march. Around the world, applications such as ChatGPT are rapidly entering human consciousness. The USA could be called the epicentre of this mega-trend, and not just because US companies from the AI sector are causing a stir on the stock markets. This is particularly true of Nvidia: the capitalisation of the high-tech group specialising in semiconductors is heading towards the sound barrier of USDtn 4. Nvidia's share price has almost quadrupled within just four years. The dominant position enjoyed by the USA is also evident from a glance at the capacities of data centres. For AI to operate effectively, it needs to process huge quantities of data at breathtaking speed. In 2024, the United States had data centres with a total capacity of 42 GW, representing an almost 44% share of the output of all such centres across the world. Europe is racing to catch up: The EU has launched a EURbn 20 fund with the aim of building five AI gigafactories on the Old Continent under what are known as public-private partnerships.
Whether in North America, Europe or elsewhere in the world, digitalisation gobbles up electricity. “There is no AI without energy – specifically electricity,” the International Energy Agency (IEA) has stated. According to the organisation, a typical, AI-focused data centre consumes as much electricity as 100,000 households, but the largest ones under construction today will consume 20 times as much. “The energy sector is therefore at the heart of one of the most important technological revolutions today,” the IEA writes in a special report. The authors believe that a reliable and sustainable electricity supply will be a crucial determinant of AI development. “Countries that can deliver the energy needed at speed and scale will be best placed to benefit,” they add.
In 2024, data centres around the world required a total 416 terawatt-hours (TWh) of electricity, about 5% of global power consumption. Demand from this sector has been climbing by an average 12% a year since 2017. That makes the rise about four times as much as the increase in total electricity consumption. The IEA reckons that data centre electricity consumption will more than double to around 945 TWh by the end of the decade. “This is slightly more than Japan’s total electricity consumption today,” the experts add. The USA accounts for by far the largest share of this projected growth, followed by China. By the end of the decade, the United States is set to consume more electricity for data centres than for the production of aluminium, steel, cement, chemicals and all other energy-intensive goods combined.
In the view of the IEA, a healthy energy mix is essential if this challenge is to be met. The agency anticipates that renewable energy sources will be supplying about half the additional electricity required for data centres by 2030. Sources that can be used flexibly, such as natural gas in particular, will play an important role as well. The technology sector itself could also promote new types of nuclear reactors and geothermal power plants. Alongside power generation, power distribution needs to function as smoothly as possible. “Electricity grids are already under strain in many places,” the IEA states. However, it takes a long time to establish new connections. One solution is to locate data centres in areas of high power and grid availability. Whatever the case, electricity suppliers have huge tasks ahead of them. These challenges also present an enormous opportunity, however, because the sector should continue to gain in importance and could thus “electrify” investors more than ever going forward.
Source: International Energy Agency (IEA) World Energy Outlook Special Report, Energy and AI, April 2025