By 2027, global AI-related electricity consumption could grow by 64%, reaching levels on par with countries such as Sweden and the Netherlands. Technology companies are rapidly expanding their data centers to power AI innovation and are the main driver of this energy surge. Amazon (AMZN), Google (GOOG, GOOGL), Meta (META) and Microsoft (MSFT) are projected to spend $189 billion on AI capital expenditures in 2024 alone.
This innovation boom comes with added costs, straining an aging power grid and increasing emissions as companies strive to meet net-zero targets — Microsoft's emissions have risen 30% since 2020 due to its investments in AI.
Companies are now working to keep up in the AI race while managing their energy footprint by investing in renewable energy sources and other zero-emission options, including nuclear. Earlier this year, Amazon purchased a $650 million data center next to a nuclear plant operated by Talen Energy (TLN). Chip companies that make the hardware that powers AI, such as industry leader Nvidia (NVDA), are also working to make their products more energy efficient as big tech companies continue to develop large-scale language models and integrate AI into real-world applications.
