Why AI isn't the whole data center story
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AI's huge power appetite is the talk of energy circles, but what's less certain is precisely how much it explains the wider data center growth underway.
Why it matters: It's a key question as policymakers and other stakeholders weigh AI's benefits against its carbon footprint.
The big picture: Data centers are one reason U.S. electricity use is rising after about 15 static years.
- The International Energy Agency projects data centers will be 6% of U.S. power demand by 2026, up from 4% in 2022.
- Further out, Barclays researchers see data centers accounting for 9% of demand in 2030 and far higher in their "upside" case, up from 3.5% today. McKinsey analysts estimate it even higher at 11%-12% in 2030.
State of play: Right now, constellation of other needs accounts for much more than AI in data center power use.
- Think streaming services, storage and databases, payment processing and various business management systems, to name a few.
- Rhodium Group director Jeffery Jones estimates AI is around 5%-10% of U.S. data center power use today.
What's next: Energy use for training and using large language models like ChatGPT are growing fast from a small base — and spawning huge new data centers.
- "We're two steps into an ultramarathon, and I mean a really long ultramarathon," Jones tells Axios, noting that generative AI only arrived in earnest about two years ago.
Zoom in: Jones estimates that in 2025, "legacy" uses will account for 80% of U.S. power demand from data centers, while AI is 20%. By 2035, he projects, it's 50%-50%.
- Absent generative AI, he said there would still be growth in traditional data centers, but it would be fairly steady at 1.5% to 2% annually.
The intrigue: For now, there's a range of views in wonk-world.
- Electricity analyst Rob Gramlich estimates half the growth in data center energy suck in the next 3-5 years will be from AI.
- Goldman Sachs research shows that soaring growth from a small base could still leave non-AI uses playing the largest role in the medium term.
- It sees non-AI data center energy use rising from 142 terawatt hours in 2023 to 304 in 2030. AI-related uses soar from 4 TWh last year to 93 TWh in 2030.
Reality check: It's hard to predict how computing efficiency gains will stack up against rising AI use.
- And there's no bright line between what's AI vs. other advanced forms of machine learning. Complicating things further, traditional data centers handle some generative AI use.
- This is also a local story. Clusters of huge data centers for AI can bring big localized challenges for utilities and grid regulators.
The bottom line: AI is turbo-charging demand, but it's not the only factor.
