James_Nov-Dec_2025_web - Flipbook - Page 78
$2.15 trillion, Meta’s, $1.86 trillion;
and Tesla’s, $1.02 trillion.
The electric utilities have been
the beneficiaries and the victims
of this investment explosion. A
beneficiary because a whole new
and exciting market has opened
up, and a victim because the
surge in demand for power from
the data centers has pushed up
electricity prices— by 20 percent
since 2020, according to the Energy Information Administration.
Electric utilities face the
daunting prospect of stranded
assets if there is an AI bubble
burst while they build to meet the
projected AI demand.
Another threat comes from the
evolution in the chips that run AI.
The vast demand for power applies
to all phases of the process, with
cooling taking 40 to 60 percent of
this, an engineer who designs data
centers told me. That percentage is
coming down with evolved chips
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and sophisticated cooling (using
more water and less air conditioning) and introducing cooling in the
chips themselves.
The incorporation of photons
(light) is already underway as the
industry struggles to perfect photon chips. These would be much
more efficient, use far less power
and generate almost no heat.
With photon chips, data
centers would be more efficient
and use much less electricity, so
fewer might be needed.
A big reduction— temporarily
if the AI bubble bursts, and permanently if new chip architecture
takes over— in electricity demand
is possible. But it won’t affect the
overall growing demand for electricity. That will continue as the
economy electrifies.
Electric utilities are also challenged by the move to self-generation by tech companies and their
insistence on green power.
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The rate of growth of data centers is beginning to be affected
by supply chain issues. Many of
the components still come from
overseas and the data centers
are running into the same supply
chain constraints that have been
plaguing the electric utilities.
Additionally, according to a
data center designer, skilled labor
is in very short supply, from people who pull wire to those who
pour concrete.
The collaboration between
electric utilities and data centers
is stable, though it may still encounter some nasty shocks. Datapoint: PG&E has just announced
that it will spend $73 billion on
upgrading its power supply to
meet surging demand, mostly
from data centers.
Veteran journalist Llewellyn King is the
executive producer/host of “White House
Chronicle,” a public affairs program airing
on PBS and PEG channels.
