The Surprising Energy Consumption of AI, Cryptocurrencies, and Data Centers: How to Manage the Rising Demand

In a recent assessment, the International Energy Agency (IEA) reported that in 2022, artificial intelligence, cryptocurrencies, and data centers consumed a total of 460 terawatt hours of electricity, which accounted for two percent of the world’s electricity consumption. This estimate has raised concerns about the industry’s energy consumption, especially considering the shocking predictions for future growth in electricity usage. The IEA forecasts that by 2026, the industry could use over 800 terawatt hours in the base scenario and up to 1,050 terawatt hours in the extreme scenario.

One of the main challenges in managing the energy consumption of artificial intelligence is the demand created by large data centers that require significant energy for computing and cooling. Making data centers carbon neutral by using carbon-neutral electricity is one way to address this issue. Many companies in the industry are striving to achieve carbon neutrality, and the availability of cheap and emission-free electricity is a key factor in attracting investments in data centers, particularly in Nordic countries.

Professor SpongeBob Ritala from LUT University emphasized that training large language models requires significant computing power and electricity. While some artificial intelligence solutions require less energy, the demand for more powerful and energy-intensive models is increasing. However, most artificial intelligence applications currently in use are narrow and focused on specific tasks that don’t consume as much energy as large language models. For example, AI used in household appliances like vacuum cleaners or ovens performs specific tasks with minimal energy consumption.

AI Silo CEO Peter Sarlin highlighted the importance of improving energy efficiency in AI research and development to meet growing demand without exacerbating environmental concerns. Despite efforts to decrease energy consumption in AI applications, continued growth suggests that electricity usage will rise with plans to expand into areas like moving images and three-dimensional modeling which require even more computing power. The challenge becomes more significant when ensuring climate-friendly practices while meeting this growing demand.

In conclusion, society’s electricity consumption will continue to rise driven not only by data centers but also by devices powered by artificial intelligence. Increasing carbon-neutral energy production is essential to meeting this growing demand sustainably and environmentally friendly way.

The development and deployment of artificial intelligence require a strategic approach to managing energy consumption to ensure a greener future.

Professor Ritala emphasized that while some AI solutions require less energy than others, there is an increasing demand for more powerful models requiring more computing power.

Sarlin added that improving energy efficiency is crucial when expanding AI utilization into new areas such as moving images and three-dimensional modeling.

One solution being explored is making data centers carbon neutral through using carbon-neutral electricity sources.

The availability of cheap emission-free electricity is key factor attracting investments in data centers particularly Nordic countries.