Artificial Intelligences Energy Paradox 2025

Introduction Growing demand for AI across industries Artificial intelligence (AI) is transforming several aspects of daily life. From automating simple tasks to enabling complex problem-solving, AI is driving innovation, increasing efficiency and changing how society operates. In particular, generative AI has emerged as a powerful transformational catalyst capable of automating tasks and reinventing processes across value chains, thereby enhancing performance and competitiveness.7 Overall electricity demand growth drivers Several market factors contribute to increased global electricity demand. Aside from AI and the electrification of both transport and buildings, other growth drivers include industrial shifts towards electric motors, urbanization, population growth and the rising adoption of digital economy solutions. Projecting AI-specific growth is challenging, however, as technological advancements and differing adoption rates complicate predictions. While Figure 1 gives some indication, further research is needed to elucidate the role that AI-related electricity demand growth plays in the context of global energy trends. AI is revolutionizing industries, resulting in growing electricity demand, but predicting AI-specific energy impacts remains complex. Electricity demand growth by end use in the Stated Policies Scenario (STEPS) 2023-2030, and data centre sensitivity cases FIGURE 1 Heavy industry Other industryOther Other buildings Data centres Space heating Desalination Space coolingElectric vehicles Other transportElectricity demand growth, 2023-30 6760 TWh Source: International Energy Agency (IEA). (2024). World Energy Outlook. Artificial Intelligence’s Energy Paradox: Balancing Challenges and Opportunities 6