AI to Crash Power Grids?

AI is certainly having its moment - but there’s a downside. The rapid advancement and integration of artificial intelligence has led to a big spike in electric power demand. AI, especially at a larger scale, requires substantial computational resources, which in turn necessitate more data center capacity. Pair this with a broader electrification trend (think electric vehicles, greening buildings, etc.) and now we have a power demand surge, one that outweighs supply. So where does that leave us? And what technologies do we have to fill the gap?

By 2030, AI will draw as much power as an entire country

The relationship between AI and power demand is undeniable. By 2030, AI could account for 3% to 4% of total global power demand. That’s enough consumption to make AI’s electricity use equal to that of countries like Russia or Japan. Largely as a result, power demand from data centers is expected to increase dramatically. In the U.S., that increase will be 80% between 2023 and 2030, reaching about 35 GW total. This is an enormous increase in electricity demand, with no plan yet in place to make up the difference.

$600 billion for digital infrastructure

Rising power demand has led to a series of investments in digital infrastructure. By 2035, investments are expected to reach over $600 billion, roughly double of what has currently been invested. The expanding market is largely driven by the rising demand for data centers. Take I Squared Capital 's recent launch of a $2.15 billion digital infrastructure business as an example. Or investment firms like IPI Partners or DigitalBridge , both of which are singularly focused on funding digital infrastructure projects. Momentum for digital infrastructure investments is here and growing.?

Batteries and nuclear could save the day?

An increase in data center capacity requires an increase in readily available energy. Who will be the big winners that ensure the power keeps flowing? I have my bets on batteries and nuclear. Batteries facilitate the storage of renewable energy, while nuclear offers a large-scale, dispatchable, and low-emission power source. Collectively, these solutions could support the digital infrastructure critical for AI operations and broader electrification trends.

On the battery front, companies like ZincFive, Inc., headed by CEO Tim Hysell, are making huge strides with their battery storage systems tailored for the demands of data centers. Big data centers require high capacity, reliable, and safe energy storage systems.?

When it comes to nuclear, companies are also taking notice. Microsoft is exploring Small Modular Reactors (SMR) to fuel its energy-intensive AI goals. These models are cheaper and easier to build, making them an attractive option compared to traditional nuclear (which is often late and over budget).?

Keeping both AI and carbon emissions on track

The combo of AI-driven power demand and broader electrification is reshaping the electricity landscape. Investments are steering towards innovative power solutions and digital infrastructure to support rising demand. With the right tools, we can keep carbon emissions low and still sustain the digital momentum fueled by AI.?

Climate Deals of the Month

REGENT Secures $60M Series A for Sea Glider Tech

REGENT's seaglider technology combines the speed of air travel with the efficiency of maritime transit - all while 100% electric.

The funding round included previous investors Japan Airlines , Lockheed Martin , and YAMATO TRANSPORT U.S.A., INC. , and new investors Point72 , Caffeinated Capital , Mark Cuban, UAE’s Strategic Development Fund, Future Planet Capital and others.?

Spearmint Energy Gets $92 Million Tax Equity Financing for Texas-Based Battery Energy Storage Project

The financing will push the development of Revolution, a 150 MW, 2-hour battery energy storage project that will be part of Texas’ ERCOT market. Funds were provided by Greenprint Capital .

Congrats to CEO Andrew Waranch on this leap forward!

Fortescue and Bill Gates-backed Electric Hydrogen Raises $380 Million in Series C

Australian mining/energy company Fortescue has teamed up with electrolyzer startup Electric Hydrogen to supply 1GW of clean hydrogen projects. This collaboration is part of a new investment round led by Fortescue, aiming to accelerate the transition towards cleaner energy solutions.

Amperon Secures $20 Million Series B For Energy Analytics and Grid Decarbonization

Amperon is focused on modernizing the grid system. Their analytics platform empowers utilities and energy retailers to better understand demand, enabling smarter grid operations and?significantly reducing carbon emissions.

This recent funding round was led by a number of VC firms and investors, including Riverstone Holdings , MUUS Asset Management Co , Blackhorn Ventures , Intelis Capital , Garuda Ventures , Climate Capital, Kiran Bhatraju, SK Ventures, Kevin Carter, V1.VC , Notation Capital , and Lattice Ventures .

Plus Power Secures $1.8 Billion to Boost Renewables and Stabilize the Grid

The capital will be used toward the development and deployment of standalone battery energy storage systems (BESS), including $707 million for the 250 MW Sierra Estrella Energy Storage facility in Arizona (the largest ever for a standalone project). Funding will also go toward 700 MW on the Texas ERCOT.

Congrats to Plus Power CEO Brandon J Keefe on this step forward!

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