The news: AI’s energy demand is exploding and straining infrastructure.

• Data centers consumed up to 76 terawatt-hours in 2024—more than what 7 million average US homes use annually, per MIT Technology Review. 
• They now use 4.4% of US electricity, double 2018’s share, and could hit 12% by 2028. 
• Next-gen reasoning models demand up to 43 times more energy than standard models for deep research tasks. 

More powerful AI, complex agents, and viral generative AI (genAI) trends could overload aging infrastructure.

AI’s looming energy crisis: Microsoft, Meta, and OpenAI plan to invest over $500 billion in new AI data centers, which are two or three years away from providing capacity. Smaller firms must rely on older systems.

The mounting cost of AI:

• Generating a single Studio Ghibli-style image or action figure uses 3.5 watt-hours—like running a light bulb for 21 minutes—and gulps between 5 and 50 liters of water for server cooling, per Medium. 
• OpenAI handles 1 billion messages and 78 million images daily, enough to power 13,700 homes each year. CEO Sam Altman noted that users saying “please” and “thank you” adds tens of millions of dollars in computing costs.

But who pays? Tech firms rarely reveal model-level energy use or emissions. This lack of transparency leaves regulators and the public in the dark about AI’s true energy and climate toll.

Some utility companies are cutting quiet deals with tech giants—offering discounted rates or guaranteed power for AI data centers. The catch: Consumers may foot the bill. A 2024 Harvard report on Virginia utilities estimated residents could pay $37.50 more per month due to these subsidies.

Our take: While Big Tech races to build capacity, the true costs of AI’s escalating environmental  and energy impact could take a toll on consumers’ wallets as well as communities faced with reallocating already-limited water supplies to data centers.

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