AI data centers draining more power than electricity grids can reliably supply

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Electricity demand is now growing faster than energy suppliers can keep up with

Volatile AI workloads cause unpredictable peaks and troughs in demand

AI could actually help predict, despite also being the cause

With three in four (77%) electricity execs now believing that data center energy demand will grow faster than utilities can keep up with, two-thirds (68%) expect electricity shortages to become more commonplace as demand for AI soars.

New data from a Capgemini report reveals just how unpredictable AI energy demands can be, with 77% admitting they struggle to accurately forecast demand amid volatile AI workloads.

Not only is this leading to more constrained energy supply, but also more extreme and less predictable demand spikes.

Data center energy demand is a whole new ball game

All of this comes as local opposition continues to mount against data centers, with residents increasingly concerned about power outages and rising energy costs. Just last week, a county in Virginia told data centers to revert to backup generators to free up grid capacity for local residents, with an ongoing heatwave causing a spike in electricity demand for air conditioning units.

Even data center companies are struggling to anticipate how much they could consume, with 67% of electricity execs reporting speculative applications for future capacity. Around a fifth (19%) of these don't even materialize, creating what Capgemini calls 'phantom demand,' forcing utilities to either overinvest unnecessarily or underinvest and create capacity shortages.

"The challenge is no longer only how much power is needed, but whether it can be delivered reliably, where and when it is required," Capgemini Global Head of Energy and Utilities Claire Gauthier wrote, citing AI's potential in helping to predict demand despite also being the cause of fluctuating and high demand. However, at the moment fewer than half (45%) currently use AI for grid optimization.

Looking ahead, most (87%) data center operators expect electricity consumption to rise over the next three to five years by an average of 30%.