The Information and Decision Support Center of the Council of Ministers issued a new analysis on “Artificial Intelligence”, during which it discussed the rise of artificial intelligence and its impact on the energy market, highlighting expectations of increasing demand for electricity from data centres. It also discussed the transformation in the field of energy supported by artificial intelligence, and promising solutions to confront the expected increase in electricity consumption due to artificial intelligence.
The analysis indicated that recent years have witnessed a noticeable acceleration in the development and adoption of artificial intelligence technologies, which has raised broad questions about the impact of this increasing spread on the energy sector. Artificial intelligence cannot operate without energy, as its infrastructure depends on large amounts of electricity to operate data centers and process information. On the other hand, artificial intelligence has the potential to profoundly transform the methods of energy production and management if it is employed on a large scale.
The analysis showed that the rapid development of artificial intelligence contributed to its transformation from an academic field into a huge industry, and its impact was reflected in the huge rise in the market value of companies associated with it. 65% of the growth in the market value of the S&P 500 index came from companies that use or integrate artificial intelligence into their core operations during the period from November 2022 until the end of 2024. That is, of the $16 trillion increase in the market capitalization of S&P 500 companies, $12 trillion came from AI-related companies.
This rapid growth in the artificial intelligence industry cannot operate without energy, and artificial intelligence has the potential to bring about a radical transformation in the energy sector. Reliable, sustainable and affordable electricity supplies will be an important factor in the development of artificial intelligence. On the other hand, artificial intelligence is one of the most energy-consuming technologies. The process of training and operating artificial intelligence models requires a huge amount of electrical power inside huge data centers, as one center consumes the equivalent of about 100,000 homes, while the largest centers under construction today consume the equivalent of twenty times more energy than that.
An analysis issued by the International Monetary Fund blog in May 2025 indicated that artificial intelligence has become a growing source of productivity and economic growth, but at the same time it leads to a significant increase in electricity consumption as its models rely and operate on huge data centers that consume huge amounts of energy. According to the International Energy Agency’s Energy and AI 2025 report, a traditional data center will have a capacity of 25 MW, a hyperscale data center will have a capacity of 100 MW, the largest data centers under construction will have a capacity of about 2,000 MW, and the largest data centers announced will have a capacity of 5,000 MW.
According to the same report from the International Energy Agency, data centers currently represent a small percentage of total global electricity consumption, but their local impacts are becoming more pronounced; The report showed that global investments in data centers have nearly doubled since 2022, reaching about half a trillion dollars in 2024, raising growing concerns about the rapid rise in demand for electricity.
The report indicated that data centers consumed about 1.5% of global electricity in 2024, equivalent to 415 terawatt-hours; The United States of America came on the list of countries that consume the largest amount of electricity through data centers at 45%, followed by China at 25%, then Europe at 15%. Globally, electricity consumption in data centers has grown at a rate of 12% annually since 2017, a rate that is more than four times the growth rate of overall electricity consumption.
The report issued by the International Monetary Fund in April 2025 indicated that global electricity consumption from data centers and artificial intelligence technologies reached 400 to 500 terawatt-hours in 2023, and global electricity consumption generated by artificial intelligence is expected to reach 1,500 terawatt-hours by 2030, which is approximately equivalent to the current total electricity consumption of India, which is the third largest electricity consuming country in the world. AI-generated electricity demand in 2030 is expected to be approximately 1.5 times higher than expected demand from electric vehicles (EVs), another growing source of electricity consumption.
According to a McKinsey analysis, the United States of America is expected to be the fastest growing data center market. Demand will increase from 25 gigawatts in 2024 to more than 80 gigawatts by 2030, driven by the continuous increase in data and the expansion of new technologies, the most important of which is artificial intelligence. The increased demand for data centers will result in much greater electricity consumption than current production in the United States; Data center loads are expected to constitute between 30% and 40% of the total new demand until 2030, and the electricity demand for data centers in the United States of America is expected to increase between 2024 and 2030 by about 400 terawatt-hours, with a compound annual growth rate of about 23%.
The analysis stressed that the rapid expansion of the use of artificial intelligence represents one of the most prominent challenges facing the energy sector, and the most prominent of these challenges are as follows:
The boom in building new warehouses to store data on the cloud and to respond to artificial intelligence queries indicates the urgent need for policymakers to develop effective energy strategies to ensure sufficient electricity supply to meet growing demand.
Under current energy policies, the rise in electricity demand resulting from AI could add 1.7 gigatonnes of global greenhouse gas emissions between 2025 and 2030, roughly equivalent to the emissions generated by energy consumption in Italy in five years.
Demand for computing and electricity from AI service providers remains surrounded by a high degree of uncertainty; The emergence of more efficient open source AI models such as DeepSeek has contributed to this uncertainty, as algorithmic improvements tend to reduce computing costs and electricity consumption, while lower costs encourage greater use of AI, which in turn increases upward pressure on electricity demand.
In addition, the rapid expansion of artificial intelligence technologies is increasing demand for electronic components used in data storage systems, made of metals such as gold, copper, palladium and platinum. Copper is an essential element in data centers to provide power, cooling and connectivity. Mining company BHP expects that annual global demand for copper from AI data centers will rise from 500,000 tons in 2024 to 3 million tons by 2050, which could put pressure on metal markets and push prices higher if growth accelerates beyond supply capacity.
The rapid increase in electricity consumption due to artificial intelligence requires reliance on a variety of energy sources. Renewable energy and natural gas are at the forefront of meeting this demand, with other sources also available.
Renewable energy contributes to meeting half of the global growth in electricity demand for data centers; It relies on storage systems and electrical networks to ensure the stability and continuity of supply. Electricity generation from renewable sources is expected to rise by more than 450 terawatt-hours until 2035, benefiting from the short implementation periods and economic competitiveness that make it a cost-effective option, in addition to the energy purchasing strategies adopted by technology companies to support the transition towards clean energy.
Deployable resources, primarily natural gas, play a crucial role in meeting energy needs; Natural gas is a low-cost fuel and a relatively low-emission energy source that can be fired on demand, and becomes cleaner when carbon capture technologies are used.
The technology sector contributes to advancing the development of new nuclear and geothermal technologies to enhance the efficiency and sustainability of the global energy system. For example, nuclear energy plays a growing role in meeting electricity demand in data centers in the United States, especially with the expected start-up of small nuclear reactors after 2030, which is expected to contribute to reducing dependence on natural gas and enhancing the share of low-emission sources in the electricity supply mix by 2035.
On the other hand, artificial intelligence can be used to enhance energy efficiency across various sectors, by providing opportunities to remove carbon by improving operational processes and reducing resource consumption. Exploiting these opportunities can contribute to achieving global climate goals and the goals of meeting electricity demand.
The analysis referred to what was stated in the World Economic Forum’s 2025 report “The Artificial Intelligence Energy Paradox: Balancing Challenges and Opportunities,” which explained that AI can play an important role in the energy transition by improving asset performance, driving innovation, and enabling sustainable technologies.
The “Energy and Artificial Intelligence” report issued by the International Energy Agency in 2025 also indicated that artificial intelligence may achieve significant gains in the efficiency and operation of the energy sector, which are as follows:
Energy companies: Artificial intelligence is used to optimize and raise the efficiency of energy and mineral supplies to generate and transmit electricity, reduce emissions, and increase the efficiency and reliability of energy systems.
Oil and gas sector: AI can improve exploration, production, maintenance and safety, reduce emissions, detect leaks, and predict maintenance.
Electricity networks: Artificial intelligence-based fault detection systems help identify faults and reduce the duration of outages by 30-50%, and remote sensors and intelligent management systems can increase the capacity of transmission lines.
Industry and manufacturing: Widespread adoption of AI applications can improve industrial processes through automation, accelerate product development, reduce costs, and improve quality.
Transport sector: Artificial intelligence technologies are improving route efficiency, traffic management, and the use of autonomous vehicles, potentially saving energy equivalent to that used by 120 million cars.
Improving building efficiency: Artificial intelligence can improve the efficiency of heating and cooling systems and increase the flexibility of indoor electricity consumption. If its use is expanded, it could lead to global savings of about 300 TWh.
At the conclusion of the analysis, the Information Center confirmed that the increasing challenges imposed by the rising demand for energy as a result of the spread of artificial intelligence technologies make it necessary to find a balance between meeting this accelerating demand and maintaining the sustainability of energy systems. Artificial intelligence not only represents a pressure on energy resources, but is also a promising tool for improving the efficiency of production and consumption. By employing it to manage networks, improve demand forecasting, and diversify energy sources, the energy sector can enhance its flexibility and contribute to the transition towards a low-emission and more sustainable future, where technology integrates with energy to serve global sustainable development.
