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May 16 - 12:55 AM

Goldman Sachs: Assessing AI's Impact on US Power Demand

By eFXdata  —  May 15 - 04:30 PM

Synopsis:

Goldman Sachs explores the impact of artificial intelligence (AI) and data centers on U.S. power demand. As investors consider the potential implications of AI advancements for the next decade, the analysis offers insights into regional effects and overall energy consumption trends in the United States.

Key Points:

  • Growth in Power Demand: AI and data centers are indeed contributing to an increase in U.S. power demand, particularly noticeable in technology-heavy regions such as Virginia. This marks a significant shift following two decades of relatively stagnant demand.
  • Quantitative Impact: Despite noticeable regional growth, the overall increase in power demand at the national level remains modest. From 2023 to 2030, total U.S. power demand is projected to grow from 470 GW to 567 GW, with data centers expected to triple their power demand from 15 GW to 45 GW, contributing approximately 30 GW.
  • Infrastructure Challenges: Potential power transmission bottlenecks pose a significant risk to the continued growth of data centers. Similar challenges have previously hindered data center expansion in Virginia during 2022-2023, as noted by Dominion Energy.

Conclusion:

While AI and data centers are poised to drive future power demand growth in the U.S., infrastructure limitations could curb this potential. Addressing transmission bottlenecks will be crucial to sustaining the growth trajectory as data center demand expands. This dynamic underscores the need for strategic planning in energy infrastructure to accommodate emerging technologies.

Source:
Goldman Sachs Research/Market Commentary

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