AI's energy impact: A nuanced perspective on global demand
Artificial intelligence is undoubtedly extremely energy-intensive. However, when its development is viewed from a broader perspective, the reality appears less black and white.
Artificial intelligence (AI) captures the attention of both the media and the public for various reasons, one of which is its impact on global energy consumption.
It's no wonder these concerns arise, as AI not only requires a lot of electrical energy but also rapidly integrates into everyday use. As noted by Axios, within just two years, generative artificial intelligence has already reached 39% of U.S. households. For comparison, after two years of their commercial introduction, around 15% of households owned computers, and just over 20% had internet access.
How much energy does AI use?
New data, however, indicates that AI is not the energy-hungry entity it is often depicted as.
In Ireland, data centers already consume over 20% of electricity, and in some U.S. states, about 10%. Although these examples are often cited, they are actually exceptions.
According to an analysis by the International Energy Agency, currently, data centers worldwide consume about 2% of electricity. This includes not only artificial intelligence but everything we do through data transmission—from watching YouTube on a laptop to managing a smart home.
More energy will be used by air conditioning
What does the future hold? The honest answer is: we don't know, because the development of AI depends on many factors.
Average projections by the IEA suggest that from 2023 to 2030, the development of data centers will increase electricity demand by 223 TWh, while overall demand will rise by over 6000 TWh. Data centers will account for only 3% of this increase, and artificial intelligence will not be the sole cause.
Data centers rank eighth on the list of these causes. The projected increase in electricity demand for electric vehicles will be four times higher, and for air conditioning—three times higher. For various industries, it will be more than ten times higher.
"The world operates digitally now. If we stop our internet services, everything around us will collapse. A few percent of the world's electricity to maintain this seems more than reasonable to me," comments Hannah Ritchie, a data analyst from Our World In Data, on her blog.
Efficiency matters
The future energy demand of AI greatly depends on further improvements in efficiency, both in hardware and software.
"The efficiency of computer chips related to AI doubles roughly every 2.5-3 years, and a modern AI-related computer chip uses 99% less energy to perform the same calculations as a model from 2008. New cooling technologies are being developed, and AI models themselves are becoming increasingly efficient," write Thomas Spencer and Siddharth Singh, IEA analysts.
Hannah Ritchie points out that concerns about a sharp increase in energy demand by digital technologies have arisen before. For example, between 2010 and 2018, the computing power of data centers increased by over 550%, yet their energy consumption increased by only 6%.
There are more uncertainties regarding the future. These relate to how we will use AI; for example, generating videos is much more energy-intensive than generating text. The development of this technology may also be influenced by the production capabilities of chips or expectations regarding returns on investment.
On the other hand, the development of artificial intelligence itself can increase the efficiency of energy systems and facilitate the introduction of innovations. This should be considered in the overall calculation, and it is also fraught with many uncertainties.
Mainly local significance?
Examples from some U.S. states or Ireland show that data centers can indeed consume enormous amounts of electricity. As a result, situations where their expansion is blocked are becoming more frequent.
"The development of data centers can lead to significant strain on local power grids, exacerbated by the huge mismatch between fast construction times for data centers and the often slow pace of expanding and strengthening grids and generation capacity. There have already been cases where jurisdictions halted new data center contracts due to the increase in applications. In regions or countries that are particularly affected, the increasing electricity consumption from data centers can hinder achieving climate objectives," assess IEA analysts.
The recent strong interest of Big Tech in nuclear energy is precisely a response to this. Large corporations like Microsoft and Nvidia are hoping that new nuclear facilities will meet the local demand for data center services.
What does this all mean? Firstly, artificial intelligence will certainly be a challenge locally. Secondly, although it's unknown how significant it will be from a global perspective, it's doubtful it will be as significant as often portrayed.
