Artificial Intelligence (AI) and heat waves are posing dual threats to the power grid. The immense energy demands of AI technology and the increasing heat waves due to climate change are putting a massive strain on the power grid.

AI’s energy needs are substantial. For instance, a ChatGPT query requires almost ten times as much electricity to process as a Google search. This demand is compounded by the nationwide boom in data center development, leading to a surge in long-term demand for electricity.

The rise of generative AI coincides with a heightening of other factors increasing energy demand, from the electrification of transportation and infrastructure to the on-shoring of US manufacturing. AI systems need power all the time, adding yet another acute demand.

For businesses with sustainability commitments, this can result in a lingering reliance on fossil fuels to keep their AI ambitions humming along. The projections for AI-led energy demands are so high that technology companies are banking on ambitious energy breakthroughs to offset unsavory emissions and power the future.

Major cloud providers like Google Cloud, Microsoft Azure, and Amazon Web Services all invest in renewable energy to match their annual electricity consumption. Clean energy projects attracting the attention of AI companies include fusion and geothermal. Other plans would plug massive data centers directly into nuclear power sites.

However, there are risks in the short term. Demand is growing so fast that it’s slowing the transition away from fossil fuels while pushing companies to expand their data center footprint. If climate change accelerates energy demand, it won’t just be shareholders absorbing the risks of the AI energy transformation. Disruptions that may arise from insatiable resource needs have a way of spilling out from portfolios.