Cryptocurrencies and AI require new data centers
Barry Copeland
25 / January / 24
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The International Energy Agency (IEA), an autonomous organization within the Organization for Economic Cooperation and Development (OECD), recently released a report on global electricity demand. Part of this report focuses on data center energy consumption. According to the international organization responsible for energy security, data centers are now major drivers of electricity demand growth in many regions.
By 2026, the study notes, data center energy appetites could double. The organization predicts the sector will consume more than 1,000 terawatt hours (TWh) per year in 2026, up from about 460 TWh in 2022. This is roughly equal to Japan's electricity consumption, the IEA claims.
AI and cryptocurrencies are two energy consumers
Behind this growth is primarily the development of artificial intelligence. Digital giants are using huge data centers to train and run generative AI like ChatGPT and Google Bard. For example, ChatGPT utilizes Microsoft's supercomputer located in Iowa. This gigantic infrastructure includes a total of five data centers, more than 10,000 graphics cards and over 285,000 processor cores. In particular, the U.S. group uses tens of thousands of A100 GPUs developed for AI by Nvidia, which is benefiting greatly from the rapid development of generative artificial intelligence. Obviously, the infrastructure requires a monstrous amount of electricity to run. At last count, a total of 1.287 terawatt hours were used to train GPT-3, one of OpenAI's latest language models.
The report also points to cryptocurrency mining. Some cryptocurrencies, such as bitcoin, operate on the Proof of Work principle. This process requires the operation of powerful machines - Asics in the case of bitcoin - to secure the network and generate new blocks in the blockchain. Tempted by the booming cryptocurrency market, many data centers are offering individuals the ability to mine digital currencies through their servers. This process is known as cloud mining.
The challenge for the power grid
The United States in particular will see an explosive growth in electricity consumption. According to a Statista study, there are more than 2,700 data centers in the US. It is the country with the largest number of data centers in the world. This country is also home to the most bitcoin mining farms. In 2021, many bitcoin miners migrated to the US to avoid the ban imposed by China. More than 30% of the bitcoin network capacity is in Uncle Sam's country.
Other countries such as Ireland, home to 82 data centers, will also have to adapt to the "rapid expansion of the data center sector" as "high demand for electricity could create challenges for the power grid." The expansion of cloud services and 5G networks should also contribute to the rapid growth in data center power consumption, the study said.
