AI data centers are devouring our energy and propping up fossil fuels

The rush to build ever-larger, power-hungry data centers is a drag on America’s progress toward clean energy. And there’s no sign of things slowing down.

Earlier this month, Amazon announced it will be investing $11 billion to build out AI data centers in Georgia, and Microsoft announced it will be spending $80 billion on data centers around the world in FY 2025.

A new report from think tank Frontier Group, public research group US PIRG, and Environment America details this massive power consumption by the data centers leading the AI revolution and cryptocurrency.

The report highlights some startling data that illustrates the massive gap between power supply and demand.

Insatiable demand

In the states where tech giants have been pouring billions of dollars to rapidly build computing infrastructure for AI, the data centers are devouring huge percentages of each state’s power generation.

Virginia, which is home to a huge number of data centers, expended more than a quarter of the state’s total electricity generation to such data centers in 2023. For comparison, in 14 other states, less than 1% of the state electricity generated went to data centers, according to the report.

Another issue highlighted by the report is the huge variance in estimates for future power consumption forecasts. Analysts’ forecasts for growth of electricity demand from 2023 to 2030 varied between 29% to 166%, leaving states with no easy way to ensure enough supply.

Prolonging the use of fossil fuels

The study identified at least 17 fossil-fuel-fired power plants in five states that have moved to delay their phaseouts due to surging demand from data centers. The report identified new fossil fuel plants being planned to help meet demand with at least 10,808 MW of power, all which slow the country’s progress toward transitioning to renewable energy generation.

The report examined the impact on communities adjacent to these supersized data centers and found many significant impacts. The massive use of community water supply, noise pollution, and soaring energy price increases that get passed on to consumers were just some of the impacts.

Negligible societal benefits

The authors included several recommendations to address the concerns raised in the study. Among the recommendations is greater transparency from the tech companies that build these data centers, to better understand energy and water use by the facilities. Other suggestions include requiring new data centers to include on-site renewable energy sources, eliminating public subsidies for data centers, and a deprioritization of computing resources that produce “negligible societal benefits.”

President Trump’s executive order this week titled “Unleashing American Energy” doesn’t contain much to indicate that any of these recommendations will be implemented at a federal level, at least. The administration has made clear that it seeks to streamline the permitting and approvals to generate significantly more cheap energy to power the large AI infrastructure projects it’s supporting, such as the new $500 billion “Project Stargate” joint venture between Oracle, OpenAI, SoftBank, and its partner Nvidia.