In recent years, the AI market has grown into a US$200 billion industry – and it’s still growing, which could double electricity consumption over the next two years. Although AI and related technologies hold the potential to accelerate the transition to climate-neutral economies, the growth in electricity demand from data centers risks offsetting these gains and delaying the energy transition if not appropriately managed.

Energy consumption of data centers is estimated to hit 1,000 TWh in 2030 and about 2,000 TWh in 2050, which is about 3% of global electricity consumption. While in comparison to other electricity uses like e-mobility, electric heating, and green hydrogen that far outpace growth in data center power consumption, it’s important to actively manage the emissions for the estimated data center growth to meet global emissions targets.

“Green AI” relates to the efforts made to reduce AI’s environmental footprint by adopting leading practices across the entire value chain—from clean energy supply purchases to hardware improvements. Achieving “Green AI” will require not just renewable energy expansion, but also reporting transparency, an ecosystems approach, and a commitment to efficient AI development and operation, so the AI boom can happen without potentially jeopardizing its environmental footprint. This Deloitte Global study focuses on potential ways to achieve “Green AI” in the future.

Innovations in AI and data center efficiency will be pivotal in shaping a sustainable energy landscape. Energy demands on data centers can be carefully managed in several ways, from improving the performance of IT and hardware equipment, to implementing a comprehensive energy management system to optimize the center’s use. In addition, using clean energy will support climate neutrality – along with phasing out or retrofitting thermal assets.