The boom in artificial intelligence has minted billions in (paper) wealth for tech giants like Microsoft and Amazon. But there’s an overlooked set of winners as well: utilities and energy companies. The power demands of the huge data centers that underpin the A.I. revolution keep growing. Wall Street is taking notice — but the climate effect isn’t getting as much attention. The A.I. boom is supercharging markets’ interest in power. One sign of investor enthusiasm: The S&P 500’s utilities sector is up nearly 8 percent this year, outpacing the benchmark index overall. Tech’s energy needs are coming into focus as investors get to grips with how much of an “energy hog” generative A.I. is becoming. Analysts at Wells Fargo see the A.I. boom helping to push up U.S. electricity demand by as much as 20 percent by 2030. Shares in Dominion Energy rose last week after the company said it expected to supply 15 new data centers this year, some requiring a gigawatt or more of electricity. (For perspective, a gigawatt powers about 750,000 homes.) And Microsoft announced a $10 billion green-energy deal with Brookfield Asset Management to supply electricity to some of its data centers. Reporting earnings on Tuesday is Duke Energy, another utility with a big data center business. But the A.I. revolution will largely run on fossil fuels. There’s a push underway to ensure that this increased energy demand is met with lower-carbon sources — consider the Microsoft initiative, or Amazon’s $650 million acquisition of a Pennsylvania center that sits next to one of the biggest U.S. nuclear power plants. However, A.I. power demands are likely to be fulfilled largely by natural gas this decade, according to the Wells Fargo analysts. That could throw the climate pledges of utilities and tech giants alike into disarray.
Full commentary : Tech giants are building power-hungry data centers to run their artificial intelligence tools. The costs of that demand surge are becoming clearer.
