CURRENTS OF RISK
Energy Demand?
Power Demand From AI Data Centers to Quadruple in 10 Years
The AI boom has supercharged electricity demand.
By 2030, data centers worldwide could devour more power than every country except China, the US, India and Russia. But AI is only the accelerant. The energy transition and electrification — from EVs to industrial plants — have been pushing baseline demand higher for years.
Wendy Carlson
Managing Director, Head of Power & Renewables, Private Credit, PGIM
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If a utility builds out generation and transmission, that cost is spread across a large customer base. And in certain parts of the world, homeowners have seen their electricity cost rise precipitously because of the giant increase in power demand driven by AI and data centers.”
The infrastructure behind AI is now a key characteristic of the energy landscape.
Electricity today is like oil in the late 1970s. But oil’s price shocks were temporary. Grid infrastructure costs endure.
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Electricity is the choke point that is rewiring the global economy.
Global data center power demand outlook by market
Source: BloombergNEF, Sept. 2025
Forecasts are not guaranteed and may not be a reliable indicator of future results.
US
China
Europe
Japan & South Korea
India
Southeast Asia
Other Asia-Pacific
Latin America
Australia
Rest of World
Sources: PJM Interconnection, Bloomberg, July 2025
Households and businesses served by PJM Interconnection, the largest power grid in the US, will spend a record $16.1 billion in 2026 to ensure electricity supplies amid a massive AI-driven demand surge.
AI BOOM DRIVES CAPACITY COST AT THE LARGEST US GRID TO ANOTHER RECORD
Utility companies in the US are projected to invest over $200 billion annually in grid upgrades through 2026, according to Bloomberg.
Financed largely with debt and locked into regulated rate structures for decades, structurally higher energy costs are expected to persist whether hyperscale data centers operate at full tilt or sit half-empty.
Sources: US Energy Information Administration, Bloomberg, July 2025
Electricity costs are near a record high
Utility Bills Keep Rising
The strain is already visible in utility bills.
Costs tied to surging data center demand are flowing directly into household electricity bills that have jumped 17%-20% in a single year in multiple states, according to Bloomberg.
These rising prices also have the potential to spark political unrest. Consumers are not likely to accept higher electricity rates as a cost of AI, and they may demand action. The increased risk of protest, political upheaval or a rise in populism could have serious social and economic consequences.
Pace With Rising
Can the World Keep
Energy Demand?
US
China
Europe
Japan & South Korea
India
Southeast Asia
Other Asia-Pacific
Latin America
Australia
Rest of World
Source: BloombergNEF
Global data center power demand outlook by market
Power Demand From AI Data Centers to Quadruple in 10 Years
Source: PJM Interconnection
U.S. utilities are projected to invest over $200 billion annually in grid upgrades through 2026. Financed largely with debt and locked into regulated rate structures for decades, structurally higher energy costs will persist whether hyperscale data centers operate at full tilt or sit half-empty.
Source: US Energy Information Administration
Electricity costs are near a record high
Utility Bills Keep Rising
Sources: IEA, Bloomberg, Sept. 2025
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