CEO: ‘AI’ Power Drain Could Cause Data Centers To Run Out Of Power Within Two Years
By now it's been made fairly clear that the bedazzling wonderment that is AI" doesn't come cheap. Story after story have highlighted how the technology consumes massive amounts of electricity and water, and we're not really adapting to keep pace. This is also occurring alongside a destabilizing climate crisis that's already putting a capacity and financial strain on aging electrical infrastructure.
A new report from the International Energy Agency(IEA) indicates that the 460 terawatt-hours (TWh) consumed by data centers in 2022 represented 2% of all global electricity usage, mostly driven by data centers and data center cooling. AI and crypto mining is expected to double that consumption by 2026.
Marc Ganzi, CEO of data center company DigitalBridge, isn't really being subtle about his warnings. He claims that data centers are going to start running out of power within the next 18-24 months:
We started talking about this over two years ago at the Berlin Infrastructure Conference when I told the investor world, we're running out of power in five years. Well, I was wrong about that. We're kind of running out of power in the next 18 to 24 months."
Of course when these guys say we" are going to run out of power, they really mean you (the plebs) will be running out of power. They'll find solutions to address their need for unlimited power, and the strain will likely be shifted to areas, companies, and residents with far less robust lobbying budgets.
Data centers can move operations closer to natural gas, hydropower sources, or nuclear plants. Some are even using decommissioned Navy ships to exploit liquid cooling. But a report by the financial analysts at TD Cowen says there's now a 3+ year lead time on bringing new power connections to data centers. It's a 7 year wait in Silicon Valley; 8 years in markets like Frankfurt, London, Amsterdam, Paris and Dublin.
Network engineers have seen this problem coming for years. Yet crypto and AI power consumption, combined with the strain of climate dysregulation, still isn't really a problem the sector is prepared for. And when the blame comes, the VC hype bros who got out over their skis, or utilities that failed to modernize for modern demand and climate stability issues won't blame themselves, but regulation:
[Cisco VP Denise] Lee said that, now, two major trends are getting ready to crash into each other: Cutting-edge AI is supercharging demand for power-hungry data center processing, while slow-moving power utilities are struggling to keep up with demand amid outdated technologies and voluminous regulations."
While I'm sure utilities and data centers certainly face some annoying regulations, the real problem rests on the back of technology hype cycles that don't really care about the real-world impact of their hyper-scaled profit seeking. As always, the real-world impact of the relentless pursuit of unlimited wealth and impossible scale is somebody else's problem to figure out later, likely at significant taxpayer cost.
This story is playing out to a backdrop of a total breakdown of federal regulatory guidance. Bickering state partisans are struggling to coordinate vastly different and often incompatible visions of our energy future. While at the same time a corrupt Supreme Court prepares several pro-corporate rulings designed to dismantle what's left of coherent federal regulatory independence.
I would suspect the crypto and AI-hyping VCs (and the data centers that profit off of the relentless demand for unlimited computational power and energy) will be fine. Not so sure about everybody else, though.