Data centers are expected to continue their rapid expansion, with power demand set to double by 2029, according to a new report from JLL. This growth, fueled by the rapid development of artificial intelligence (AI) and the continued expansion of cloud-based services, is putting immense pressure on the energy sector to meet the increasing power needs.

The report highlights that the industry's expansion is testing the limits of the energy sector, with some experts warning that half of all new AI servers could be underpowered by 2027. This is largely due to the mismatch between the timelines of utilities and power developers, who typically operate on long-term plans, and the rapid growth of AI, which requires significant power resources.

The concentration of data centers in specific regions is also exacerbating the issue, threatening to overwhelm local grids. Utilities, which tend to plan years or even decades in advance, are struggling to keep up with the explosive power needs of AI. As a result, data center developers and operators are taking matters into their own hands, signing deals directly with renewable developers and nuclear startups to ensure a stable power supply.

Google, for example, has invested $20 billion in renewable power projects to feed its massive data centers. The tech giant has also partnered with nuclear startup Kairos to secure 500 megawatts of carbon-free electricity by the end of the decade. Microsoft, another major player in the industry, is working with power provider Constellation to restart a nuclear reactor at Three Mile Island that was shuttered in 2019. Meanwhile, data center company Switch has signed an agreement with Sam Altman-backed nuclear startup Oklo for a whopping 12 gigawatts of electricity by 2044.

However, the challenge lies in matching supply with demand. While most data centers are situated near major urban areas, building nuclear reactors, even small ones, is more complicated in these locations. Renewables, on the other hand, have easier permitting processes but require more land. Both nuclear and renewable energy sources will need new transmission lines, which take years to build, further complicating the issue.

The report's findings highlight the urgent need for the energy sector to adapt to the rapid growth of data centers. As the industry continues to expand, it is crucial that utilities, power developers, and data center operators work together to ensure a stable and sustainable power supply. Failure to do so could result in significant disruptions to the global digital infrastructure, with far-reaching consequences for businesses and individuals alike.

In conclusion, the rapid growth of data centers is pushing the energy sector to its limits, and it is essential that stakeholders take proactive steps to address the issue. By investing in renewable energy sources, nuclear power, and innovative transmission solutions, the industry can ensure a sustainable future for data centers and the digital economy as a whole.