The Other Cost of AI: Data Center Power Demand Surges

The rapid rise of artificial intelligence is driving a surge in electricity demand from data centers worldwide. As our chart, based on data from S&P Global Energy cited in the Statistical Review of World Energy, shows, global data center power consumption has increased steadily in recent years, reaching almost 800 terawatt-hours in 2025, nearly doubling from just over 400 terawatt-hours in 2020. That is more than the annual electricity consumption of Germany, the world’s third largest economy.

The United States remains the largest market by far, with data center electricity demand exceeding 300 terawatt-hours in 2025. China ranks second and has also seen strong growth in recent years, while Europe and other regions are also experiencing a steady increase in demand, albeit at a much lower level.

This trend highlights a growing challenge of the digital economy. As demand for computing power rises, largely driven by AI and related cloud services, the environmental footprint of data centers continues to expand, increasing the need for reliable and sustainable power supply. The expansion of renewable energy and storage capacity could play a key role in meeting the sector’s rising energy needs. By 2030, data center electricity consumption is projected to double again to more than 1,500 terawatt-hours, which is equivalent to total residential electricity use in the United States in 2025.