It’s no news that artificial intelligence (AI) is radically changing industries around the world, but there’s one intriguing side effect that often goes unnoticed – a surprising surge in energy consumption in the United States. Yes, you heard that right. The significant energy utilization by data centers, which support a myriad of AI applications, is making the energy meter race like never before.
According to Boston Consulting Group, the trend is expected to continue, projecting a threefold increase in the electricity consumption of US data centers by the end of this decade. If these patterns hold, these data centers could be responsible for a staggering 7.5% of the total electricity consumption in the United States, marking a historical trend reversal.
This AI influx is good news for American energy providers who stand to gain substantially from this boom. For instance, we’re now witnessing Texas-based electricity producer Vistra’s market value surpassing that of AI giant Nvidia. Similarly, Southern Company and Nextera Energy are well-positioned to leverage this escalating demand for power, with Nextera particularly focusing on environmentally friendly energy initiatives.
On a parallel note, the relocation of production facilities to the U.S., spurred by President Joe Biden’s administration, is further contributing to the increased demand for electricity. As a result, companies are becoming more inclined to shell out higher prices for energy – opening the doors for unexpected opportunities for power producers.
One promising prospect is Virginia-based electricity producer AES. According to Morgan Stanley, AES is set to benefit from the AI boom through its collaborations with tech companies, with a forecasted nine percent profit increase and a dividend yield of over three percent.
So could this be a sort of silver lining to the AI surge – providing an unexpected boost to energy producers? It’s too early to tell for certain. But one thing’s clear – the collaboration between AI and power producers will definitely light up conversations for some time to come. And who knows – it might just revitalize your investment portfolio as well. The power is, quite literally, in the industry’s hands.