AI may offset data centre energy use, says PwC

It could cut data centre GHG emissions by 0.1% to 1.1% from 2024 to 2035.

Artificial intelligence (AI) could improve energy efficiency across the economy at one-tenth of the rate of adoption, and offset the extra energy used by data centres, according to PwC’s report.

The report estimates that by 2035, data centres could use 13% to 16% more energy due to increased AI demand.

Over the full period from 2024 to 2035, data centre energy use could be 18% to 21% higher if AI is widely adopted.

Moreover, PwC finds that climate-tech start-ups working with AI raised US$6b of venture funding in the first nine months of 2024, which was US$1b more than they raised in all of 2023.

Assuming that each percentage point (pp) increase in AI use leads to a 0.1 pp improvement in energy efficiency, projected increases in AI adoption would result in 0.3% to 1.3% less energy use outside data centres in 2035 than there would be with baseline levels of AI adoption.

Over the period 2024 to 2035, total energy savings outside data centres would be 0.1% to 1%.

Accounting for the rise of energy consumption in data centres and the potential AI-driven gains in efficiency, the report finds that AI adoption would reduce energy consumption across the economy to a modest degree.

In the year 2035, the net reduction in energy used is 0.5% to 1.1%, depending on the scenario.

And over the period 2024 to 2035, AI adoption would result in cumulative changes in energy use that could range from a reduction of 0.9% to an increase of 0.1%.

PwC also estimated the difference in greenhouse gas (GHG) emissions across data centres and elsewhere associated with widespread AI adoption.

The report showed that widespread AI adoption could cut total GHG emissions for the period 2024 to 2035 by 0.1% to 1.1%.

By 2035, emissions would be 0.3% to 1.9% lower with widespread AI adoption than without it.

In finding the right balance, the report suggests four actions that can help companies get the AI-energy equation right: use AI as a demand-side energy solution, track the emissions of your AI programme, right-size AI for business needs, and consider sustainability when choosing AI vendors.