Data centers expected to use 4x more electricity by 2035

U.S. data centers are projected to consume four times the amount of electricity they do today by 2035, reaching a level where they will account for one-fifth of the nation's total electricity generation, according to a new report from BloombergNEF.

The surge in demand for artificial intelligence (AI) compute power is driving data center capacity to nearly 200 gigawatts over the next decade. The report estimates that almost half of this capacity will be dedicated to AI training and inference, with the majority remaining concentrated in the U.S., which is expected to host 64% of AI chip power demand by 2033.

These projections represent a significant upward revision, with BloombergNEF's 2035 electricity demand estimate being 83% higher than its December forecast. This trend is mirrored by other organizations, such as EPRI and S&P, which have also substantially increased their forecasts, reflecting the rapid pace of data center development across the U.S.

The report indicates that many new data centers will be connecting to electrical grids that are already strained. Regions like PJM Interconnection, which covers much of the eastern U.S., are predicted to allocate 34% of their electricity to data centers, while ERCOT in Texas may need to dedicate 22% of its generation capacity to meet this demand.