AI's 'insatiable' electricity demand could slow its growth — a lot, Arm exec says

An Arm executive says generative AI’s overwhelming demand for electricity could hinder its rapid growth.

Ami Badani, the chief marketing officer of the British tech company, said at Fortune’s Brainstorm AI Conference in London that the data centers powering AI chatbots already account for 2% of global electricity consumption.

“We won’t be able to continue the advancements of AI without addressing power,” Badani said. “ChatGPT requires 15 times more energy than a traditional web search.”

That uptick will not only set AI advancement back, but also tech and utility companies looking to meet their net-zero emissions goals. Former Energy Secretary Ernest Moniz said at S&P Global’s annual global energy conference last month that utilities will have to rely on more fossil fuels as they try to meet demand.

“We’re not going to build 100 gigawatts of new renewables in a few years. You’re kind of stuck,” Moniz told The Wall Street Journal last month.

Utility companies are already seeing a major uptick in demand. Nine of the major 10 U.S. electric utilities said in their first quarter earnings reports this year that data centers are their top source of customer growth, Reuters reports. McKinsey estimates that energy consumption from hardware in data centers will more than double in the years ahead, according to Reuters, from 21 gigawatts in 2023 to more than 50 gigawatts in 203.

“If you think about AI, it comes with a cost,” Badani said at the Fortune conference, “and that cost is unfortunately power.”

By the numbers

100 million: Number of ChatGPT active users.

9,000-11,000: Number of cloud data centers across the globe.

2026: Year by which electricity demand from data centers, AI, and cryptocurrency could double.

46 terawatt-hours: Global energy consumption of all data centers estimated for the 2024 calendar year, three times more than 2023.