Is the massive buildout of power infrastructure for AI sustainable?

A global race is on to build ever bigger and more powerful data centres to fuel the boom in demand for computing power generated by AI.

- Shihab Elborai, Aditya Harneja and Ramzi Hage

Industry forecasts are already projecting that global electricity demand from data centres will more than double by 2030 to 4-6 per cent of global power consumption, from 1.5 per cent in 2024 — equivalent to the energy use of Germany, the world’s third largest economy.GCC nations feature among the countries ramping up their ambitions around this roll out, taking advantage of their unique economic, technological and geographical advantages. Data centre capacity in the GCC is expected to increase from 1 GW to 4 GW or more over the next five years. If this growth materialises, data centre demand will represent 3-5 per cent of total GCC electricity consumption in 2030, an especially significant share given the region’s comparatively later start in capacity building.

As a result, key players in the data centre industry are preoccupied with ensuring that plans for new infrastructure are in place to handle the AI power boom. But what if the real risk is not being left behind, but instead the opposite: massive overbuild and stranded assets? Behind the current attention-grabbing forecasts lies tremendous uncertainty.

Multiple factors drive uncertainty