Alphabet, Amazon, and Microsoft are investing heavily in data centers to acquire more computing power. Collectively, they have invested $40 billion in the first quarter of the year, with a majority of this investment going towards addressing the growing need for processing power to handle artificial intelligence workloads. This trend is reminiscent of the energy industry’s appetite for capital expenditures, given the significant sums involved in building and maintaining data centers for AI processes.
Meta, which is not in the cloud business, also announced plans to spend $40 billion on capital expenditure this year for AI-related projects, comparable to the spending plans of oil giant Saudi Aramco. The demand for computing power for AI projects is so high that companies like Microsoft are expected to spend even more. This reliance on electricity is significant as it translates to a heavy reliance on non-renewable sources of energy.
Dominion Energy, a major American utility, revealed that data center developers are now frequently requesting “several gigawatts” of electricity, a significant amount considering Dominion’s total installed capacity is 34GW. As such, there is growing concern about the environmental impact of these data centers and their reliance on non-renewable sources of energy. However, companies are exploring ways to reduce their carbon footprint by using renewable energy sources and implementing more efficient technologies.