Big tech companies are currently on a mission to acquire more computing power, with Alphabet (Google’s parent company), Amazon, and Microsoft leading the charge. Between January and March, these cloud-computing giants collectively invested $40 billion, primarily in data centers capable of handling increasing artificial intelligence workloads. Meta, although not in the cloud business, also announced a significant capital expenditure of $40 billion this year for AI-related projects, approaching the spending levels of major oil companies like Saudi Aramco. Microsoft is expected to increase its spending even further in this area.
The comparison to the energy industry is not just about the enormous investments being made. AI requires massive amounts of processing power, which in turn requires significant amounts of electricity to operate. Dominion Energy, one of America’s largest utilities, has noted that data center developers are now requesting “several gigawatts” of power, even as Dominion’s total installed capacity stands at 34GW. This highlights the immense energy needs of these data centers to support the growing demands of AI technologies.