A new report into the seismic demands of AI data centers on the power grid claims that electricity rates for individuals and small businesses could increase vastly in the face of data center expansion from the likes of Amazon, Google, and Microsoft. The New York Times reports that AI data centers could see their demand on the country’s electricity could increase to as much as 12% by 2028, up from just 4% a couple of years ago. Furthermore, high-tech giants are building their own power plants, becoming consumers and producers of electricity in a way that is fundamentally reshaping the U.S. electricity market. According to the report, small businesses and households could see their bills go up disproportionately as a result.
AI data centers need more power and power grid investments
According to the report, in 2023, data centers run by such companies as Amazon, Google, Meta, and Microsoft accounted for 4% of the nation’s electricity use, and federal projections indicate that share could climb to 12% by 2028. Since AI processing is far more energy-intensive than streaming or standard cloud workloads, Amazon’s chief executive, Andy Jassy, has openly said that power availability is the main bottleneck limiting new data center capacity.
Significant power demand not only creates unprecedented strain on the grid but is even forcing high-tech giants to generate their own power. For now, they use various renewable energy sources, gas turbines, or diesel generators, but going forward, some even plan to run their own nuclear power plants. Already, some sell surplus energy on the wholesale market. Over the past decade, these sales have totaled $2.7 billion, with most revenue generated since 2022. In some regions, their operations match or surpass the scale of established utilities, allowing them to influence both supply and pricing.
Hellbound and Down 