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AI Boom Drives Data Center Power Demand, Challenging Decarbonization Goals

The rapid expansion of Artificial Intelligence (AI) is placing unprecedented pressure on global data center power consumption, raising concerns about energy sustainability. According to JLL’s 2025 Global Data Center Outlook, the data center market is projected to grow at a 15GR through 2027, with potential upside reaching 20?GR. However, this growth is straining global decarbonization efforts, even for sustainability leaders like Google.

Key Takeaways

• AI-Driven Expansion: AI adoption is accelerating data center infrastructure demand, with hyperscale and colocation facilities set to add 10 GW of new capacity in 2025.
• Skyrocketing Power Needs: NVIDIA's latest AI chips consume 300% more power than previous generations, and global data center energy consumption is expected to double in five years.
• Cooling Innovations: Traditional air cooling is becoming inefficient as GPU power usage exceeds 150 kW per rack, making liquid and immersion cooling essential.
• Nuclear as a Solution? More than 100 global sites are being evaluated for Small Modular Reactor (SMR) installations to support data center energy demand, with gigawatts of nuclear capacity set to double.
• Massive Investment Needs: The data center industry will require Rs1479000 crore in financing in 2025, underscoring the sector’s capital-intensive growth trajectory.

AI-driven data centers are threatening corporate net-zero targets, requiring urgent shifts to renewable energy, nuclear power, and innovative cooling techniques. The push for carbon-free energy solutions will reshape power grids, influencing policies and investments in energy-efficient data centers. The industry must balance AI expansion with climate goals, integrating green power solutions to mitigate environmental impacts.