AI’s Energy Appetite: The Power Surge Ahead
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AI’s rapid growth is driving an unprecedented boom in global electricity demand, with data centers and electric vehicles expected to add more than 2,000 terawatt-hours by 2035, says Kim Inglis, BCom, CIM, PFP, FCSI, RIAC, Senior Portfolio Manager at Raymond James. She weighs in on AI’s accelerating power usage worldwide and the potential implications for investors and policymakers.
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Kim Inglis:
Hi, I'm Kim Inglis, Senior Portfolio Manager with Raymond James. The expansion in AI that we are seeing is huge and what has been helping it has obviously been electricity that's helped to drive it. And that electrical demand is expected to increase from here. The IEA as an example expects electric demand to increase by 40% between now and 2035. And the two key areas which will help drive that demand are identified as being data centers and electric vehicles. So the chart that I've got for you today just highlights just how much that electric demand is expected to increase. So for data centers, which obviously helps drive AI, it's expected to increase by the equivalent of what Brazil, the entire country of Brazil is consuming in terms of electricity right now, which is a pretty significant amount. And then for EVs, the demand is expected to be even more. It's expected to be about the same as what Russia is currently consuming. So these are huge numbers. And so I think it's important that the key takeaway here really would be that when you're looking at AI, it's more than just a tax story. It's also a global energy market story.