Artificial intelligence is not only driving the stock prices of chip companies to new heights, it’s also pushing demand for energy significantly higher than anyone was anticipating.


The nine-year projected growth forecast for North America has essentially doubled from where it stood last year as companies begin construction on AI-hosting facilities that make the demands of traditional data centers look miniscule.

Last year, the five-year forecast from Grid Strategies projected growth of 2.6%. That number has since nearly doubled to 4.7%—and planners expect peak demand to grow by 38 gigawatts. That’s equivalent to the amount needed to power 12.7 million homes, a bit more than the total number of housing units in Texas.

Perhaps even more concerning, experts say that’s likely an underestimate of what the actual need will be, saying they expect the next forecast (in December of this year) to show an even higher nationwide growth rate.

“The U.S. electric grid is not prepared for significant load growth,” Grid Strategies warned.

AI is a major part of the problem when it comes to increased demand. Not only are industry leaders such as OpenAI, Amazon, Microsoft, and Google either building or looking for locations on which to build enormous data centers to house the infrastructure required to power large language models, but smaller companies in the space are also making huge energy demands, as the Washington Post reports.

Meanwhile, the surge of interest in cryptocurrency that has come as a result of Bitcoin hitting new highs, could affect energy demand as well. Bitcoin faces a planned event later this year known as “the halving,” when the number of new coins going into circulation will be reduced by 50%, and crypto miners will be working harder than ever to get their hands on those. The growing number of electric cars and household appliances doesn’t help matters either.

All of this has made projecting power demands a challenge. Georgia Power, which is the chief energy provider for that state, recently had to increase its projected winter megawatt demand by as much as 38%. That’s, in part, due to the state’s incentive policy for computer operations, something officials are now rethinking. Meanwhile, Portland General Electric in Oregon, recently doubled its five-year forecast for new electricity demand.

The potential energy crunch could present several potential headaches for consumers.

There are, of course, the obvious ones, like how do power companies prioritize who gets power from the grid when it’s at or near capacity? Legislators in several states are also looking at how to protect residential customers from having to pay for necessary upgrades that will largely be used to power data centers.

There are also environmental concerns. While there is a push to move to cleaner energy production methods, such as solar, due to large federal subsidies, many are not yet online. And utility companies are lobbying to delay the shutdown of fossil fuel plants (and some are hoping to bring more online) to meet the surge in demand.

“Annual peak demand growth forecasts appear headed for growth rates that are double or even triple those in recent years,” Grid Strategies wrote. “Transmission planners need long-term forecasts of both electricity demand and sources of electricity supply to ensure sufficient transmission will be available when and where it’s needed. Such a failure of planning could have real consequences for investments, jobs, and system reliability for all electric customers.”