AI and Energy
“To learn, you have to listen. To improve, you have to try.”
Thomas Jefferson
AI, the hot topic of 2024, has lost steam in recent months. Articles are circling around with headlines such as “AI teddy bears harvesting data from your children” as well as videos of the artist and filmmaker Hayao Miyazaki calling AI an “insult to life.” The usefulness of AI has been felt by many who can hand over some tedious tasks to AI-assisted functions, but the long-term merits of these powerful algorithms remain an open question.
As a result, powerful AI stocks in 2024 have not been immune to the pullback we’ve seen in the stock market. If anything, some stocks, such as Nvidia, have been hit particularly hard in Q1 2025 and are not seeing any respite. Their future is uncertain, and it is difficult to know how much this is a result of the political landscape of uncertainty or a result of the selloff from an over-hyped and over-bought sector in technology.
Energy consumption has been a global hot topic for decades, with varying political parties and independent groups having a wide range of opinions regarding the best way to manage our ever-expanding electrical grid. According to research from Callan, electricity demand worldwide will add consumption equal to the 10 largest cities, per year.
It is also becoming increasingly clear that renewables are not able to catch up or maintain electrical grids on the scale necessary on their own, especially given that AI data centers are monsters of power consumption.
Data centers in the US could more than double their consumption of energy between 2023 and 2028. AI workloads consume almost 10 times more energy than traditional web searches, forcing tech giants to turn towards nuclear as the only viable option to sustain their AI.
Nuclear power, a forgotten and unpopular option as a result of Fukushima’s recent shutdown, has seen the off button more than the on button these past twenty years. The US boasted 112 units in 1992, but that has steadily fallen to 94 today, with closures outpacing additions. The global count is also down from 437 to 413.
China, as can be seen by the chart below, is leading the field in new reactors, but the US is increasingly warming up to the idea of nuclear. The so-called Inflation Reduction Act of 2022 created a tax credit for existing reactors, and Michigan recently secured a $1.5 billion loan from the Department of Energy to restart their Palisades plant, the first US reactor to ever return from retirement.
