With the growing proliferation of AI models, U.S. energy firms are urged to prepare for a significant boost in power needs driven by expanding datacenter operations. Bain & Company highlights that the surge in demand for datacenters, fueled by advancements in AI technologies, could soon surpass existing energy supplies, presenting both risks and revenue opportunities for utility providers.

Investments in expanding energy capacity are necessary, albeit risky, according to Bain. Failure to meet these demands might mean missing out on revenue growth. As infrastructure to support AI continues to expand, capital spending on datacenters is anticipated to sharply rise, with projections of a nearly 30 percent increase this year.

Major players in the datacenter sector are primarily based in the United States, poised to significantly ramp up capacity in coming years. A study by Rystad Energy indicates that power consumption by these facilities could more than double by 2030, leading Bain to recommend an increase in electricity generation by up to 26 percent by 2028.

Bain’s analysis suggests that utility companies face a critical juncture, as the trend towards increased power utilization is driven not just by AI datacenters but also by the rise of electric vehicles and domestic manufacturing shifts. However, Bain warns that without swift adaptation, companies may miss out on growth, particularly in areas like Northern Virginia, identified as a key growth region.

Beyond the U.S., other markets face similar challenges; European operators also report difficulties in securing robust power supplies. In Ireland, datacenters consumed over a fifth of the national electricity supply in 2023 alone.

Driven by these trends, global power consumption by datacenters could rise at a compound annual growth rate of up to 24 percent from 2023 to 2027, equating to over 1 million gigawatt hours. Addressing this demand may require utility firms to undertake expansive infrastructural upgrades, costing over $2 trillion in new energy generation resources.

Despite potential hurdles, Bain identifies opportunities for utility firms to innovate and reposition themselves to meet this growing demand. By modernizing their operational strategies, utilities could expedite planning and deployment of critical infrastructure.

The intersection of energy consumption and AI growth also amplifies concerns surrounding environmental impacts. Investment in technologies for carbon reduction could mitigate some environmental concerns, aligning energy sector transformations with sustainability imperatives. Hence, industry leaders like Bill Gates and Eric Schmidt advocate bold advancements in AI datacenters to support global climate goals.