Rising AI use will push data‑center power demand up 300 %
What's the story
The energy demand of data centers in the US is projected to skyrocket nearly threefold by 2035, according to BloombergNEF. The increase will be largely driven by new construction projects, which are expected to require 2.7 times more electricity than what the sector consumes today. By 2035, data centers are expected to consume a whopping 106 gigawatts (GW) of power, up from around 40GW today. For perspective, 10GW could power Switzerland's entire electricity grid for roughly 15 years.
Growth pattern
Rural areas to witness data center expansion
The report highlights that most of this growth will be seen in rural areas, as facilities expand in size and urban locations become more difficult to find. Currently, only 10% of data centers consume more than 50 megawatts of electricity. However, over the next decade, new facilities are expected to consume well over 100 megawatts each on average.
AI impact
AI's role in data center energy demand
The report also notes that artificial intelligence (AI) will play a major role in the increasing energy demand of data centers. As AI training and inference grow, they are expected to account for nearly 40% of total compute power used by data centers. This is a significant jump in the overall utilization rate, which is projected to increase from 59% to 69% over the next decade.
Project impact
New projects driving data center energy demand surge
The surge in energy demand is also being driven by a wave of new projects announced since April. The report notes that early-stage projects have more than doubled between early 2024 and early 2025. A large chunk of this new capacity is being planned for Virginia, Pennsylvania, Ohio, Illinois, and New Jersey—states that are part of the PJM Interconnection region.
Regulatory concerns
PJM Interconnection under scrutiny for data center connections
The PJM Interconnection, a regional transmission organization responsible for managing the electrical grid in several states, is under fire from its independent monitor Monitoring Analytics. The group has filed a complaint with the Federal Energy Regulatory Commission (FERC), arguing that PJM can only approve new data center connections if its grid has enough capacity to handle them reliably.