AI’s Energy Appetite: Outpacing Bitcoin…

A recent analysis indicates that AI may soon rival Bitcoin mining in terms of energy consumption, with projections suggesting that artificial intelligence could account for nearly half of the global electricity usage of data centers by the end of 2025.

These estimates come from Alex de Vries-Gao, a PhD candidate at the Vrije Universiteit Amsterdam’s Institute for Environmental Studies, who has previously analyzed the electricity consumption and environmental impact of cryptocurrencies through his research and the site Digiconomist. His latest insights on the rising electricity demand of AI were published last week in the journal Joule.

According to de Vries-Gao, AI currently consumes up to 20% of the electricity used by data centers. Pinpointing this figure is challenging without detailed disclosures from major tech firms revealing the energy usage of their AI models. De Vries-Gao’s projections are based on the supply chain for the specialized chips that power AI. Despite advancements in efficiency, his and other researchers’ analyses show that AI’s energy demand is increasing rapidly and requires closer examination.

De Vries-Gao initially believed he might be able to step away from this line of research as alternative cryptocurrencies, like Ethereum, shifted to less energy-intensive methods. However, he was taken aback by the emergence of ChatGPT, remarking, “I was like, Oh boy, here we go. This is another typically energy-hungry technology, especially in highly competitive markets.”

He identifies a few notable similarities between AI and cryptocurrency mining, one being a prevailing belief that “larger is better.” He observes that major tech companies are continuously expanding their model sizes in pursuit of superior performance, which inadvertently increases the resource requirements for these models.

This trend has sparked a surge in the establishment of new AI data centers, particularly in the United States, which has the largest number of such facilities. As demand for electricity from AI grows, energy companies are looking to develop new gas-fired power plants and nuclear reactors. Sudden spikes in electricity usage can strain power grids and hinder efforts to transition to cleaner energy sources, similar to the issues posed by new cryptocurrency