AI’s craving for electricity will more than double the use of data center energy by the end of the decade, according to latest forecasts from investment banker Goldman Sachs.
A harsh warning from Goldman Sachs Research observes that global interest in generative AI has led to an arms race to develop more and more large models.
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Financial Services BIZ estimates that the current total electricity consumed by the global data center industry is approximately 55 GW. Over half of this (54%) is related to cloud computing workloads, with traditional business capabilities that make up 32% of email and storage, and AI workloads at 14%.
By modeling future demand for each of these types of workloads, the projection is the power requirement to reach 84 GW by 2027, with AI expanding to 27% of this, with the cloud half and traditional 23% of the features are configured.
In exact terms, this means that the power consumed by all these data facilities is set to increase by 50% in just a few years, and Goldman Sachs expects this trend to continue. 2030.
Amazon will spend $75 billion in 2024, primarily in AWS, and expect to fork more into the current calendar year. Similarly, Microsoft forecasts $80 billion in 2025 to infrastructure, train and deploy AI, and has meta about $60 billion in AI resources.
An increase in total capacity means that the grid will need large amounts of money to maintain its pace, with Goldman Sachs requiring $720 billion to upgrade work between now and 2030 We estimate that it may be.
That may seem like a tall order. However, another way is that power shortages could put the brakes on data center expansion in some regions.
“These transmission projects may take years to allow and may take some more construction and, if the region is not actively actively about this given lead times, then due to data center growth. You can create another potential bottleneck for the
Last year, a report from management consultant Bain & Company said that increased electricity consumption in the US could surpass supply in just a few years, unless energy companies move to promote power generation capacity and distribution. I’ve warned.
Another report claimed that unless Americans were able to take such measures by 2030, they could face a 70% increase in electricity bills.
Goldman Sachs has seen a short-term tightening of supply and demand balance in the data center industry, with infrastructure occupancy surges from about 85% in 2023 to a peak that could exceed 95% in the second half of 2026 I expect this to be estimated.
Researchers then believe that occupancy will slow in 2027 as more server farms come online and AI-driven growth slows. However, this slowdown is based on the assumptions by researchers that more efficient AI models reduce the need for a huge amount of infrastructure investment.
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“In the long term, if efficiency is promoting lower CAPEX levels (from hyperscalar or new investment plans from new players), this will reduce the risk of long-term market oversupply seen after 2027. There are important considerations that can improve durability and reduce circulation in the data center market, according to Schneider.
Goldman Sachs, a financial services business, is of course very interested in the investment opportunities presented by this potential crisis.
“Top data center operators with key asset footprints that serve hyperscale cloud companies and large enterprise customers will be positioned well to meet the expected surge in global demand,” the company said. states. ®
