How the AI boom is overwhelming data center, energy demand

Nvidia's (NVDA) first quarter earnings results proved the growing appetite for data centers in the artificial intelligence era is not close to slowing down. However, industry experts caution that harnessing the power necessary to fuel this AI-driven revolution is the next challenge.

Yahoo Finance's Ines Ferré delves into the details, providing valuable insights into how the energy sector will be greatly impacted by this influx of demand for artificial intelligence.

Hear more about Nvidia in this exclusive interview with CEO Jensen Huang.

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This post was written by Angel Smith

Video transcript

Nvidia's blowout quarter shows demand for data centres in the age of artificial intelligence is insatiable.

Challenge, according to experts, will be powering that boom.

Yahoo Finance's in foray is here with more on Yeah, guys, and I spoke to one expert that told me the utility industry is not prepared for the demand for data centres that is coming down the pike.

The power industry had already been preparing for the adoption of EVs more on shoring and industries that require more power.

But the energy demands of A I just add a whole other layer of complexity to the grid because even though chips require less energy, they are so powerful and can do so much that their usage increases even with the next generation of chips.

And it's not like S where the demand is linear.

The demand literally can happen overnight.

There's a McKinsey study that shows that our demand for data centres will more than double by 2030 I spoke to one data centre operator that told me they're seeing unprecedented demand.

Demand from hyper scalar cloud is a service providers and also enterprise, uh, banks, uh, pharmaceuticals that want to use a I data centres for their operations, he said.

The bottleneck used to be supplies.

Now the bottleneck is power, energy demand.

So so how the following as was how are utility companies kind of responding to that demand?

They have been racing to respond to this demand, and they have been mentioning, uh, the demand from data centres in their earnings call.

More and more, you have the Southern company in Georgia that said that their sales to data centres increased 12% year over year last quarter in northern Virginia, where there are a lot of data centres in that area getting regular requests to support large data centre campuses.

And then you have constellation Energy.

That is the new play that Wall Street is so endeared with, and constellations based earnings are expected to grow 10% through the decade, and what Wall Street is most bullish about with them is that they are have been, uh, having, uh, conversations with some of the hyper scalar.

So could they team up with the hyper scaler to actually have a data centre right next to one of their power plants and they can just hook right up so interesting um Well, we we'll, uh, count on you to continue to follow this because it's not going anywhere.

I certainly appreciate it in this.