Amid the unprecedented growth and adoption of AI technologies, players across the value chain need to address energy challenges and accelerate their investment in digital infrastructure.
Artificial intelligence has become an integral part of our daily lives and work, and demand continues to skyrocket: McKinsey estimates that by 2030, the AI economy could be worth as much as $4 trillion in value. But as demand grows for this power-hungry technology, so does the need to accelerate the pace and scale of power creation. Data centers play a vital role in meeting this growing need.
During a McKinsey Live event, partner Jesse Noffsinger and senior partner Pankaj Sachdeva explored how business leaders can navigate this environment, deliver on the opportunities presented by this unprecedented growth, and overcome energy challenges and operational constraints.
McKinsey projections suggest that global data center capacity could nearly triple to meet demand over the next five years. To support this exponential growth, existing data centers will need to get bigger and more powerful, while additional capacity will be created through new facility construction in locations such as Alabama, Oklahoma, and Wyoming. Growing the capacity of data centers in this way could play a vital role in unlocking higher adoption of AI and other digital technologies.
But the data center market also faces substantial constraints on scaling the required computing infrastructure. These primarily involve energy challenges—including existing grid constraints and a power gap created by exponential data center growth—and the time it takes to operationalize a data center.
Players can address these challenges through a variety of actions. In the near term, they can power existing data centers by leveraging batteries and energy storage. In the medium term, they can focus on power generation-based solutions such as large-scale wind and solar farms. Finally, next-generation clean technologies such as geothermal, carbon capture and nuclear-based solutions like SMRs can play an important role in the longer-term horizon.* * *
For more on this topic, see the articles “How data centers and the energy sector can sate AI’s hunger for power,” “AI power: Expanding data center capacity to meet growing demand,” “The role of power in unlocking the European AI revolution,” “Rethinking your company’s clean-power strategy,” “How hyperscalers are fueling the race for 24/7 clean power,” and “Charting a path to the data- and AI-driven enterprise of 2030,” all on McKinsey.com.