AI’s real bottleneck is electricity. Who will pay for it?

What the report says

Al Jazeera reports that the rapid growth of AI is pushing major technology companies to secure large amounts of electricity, with nuclear power emerging as a key source. The article says Amazon and Google recently signed long-term agreements tied to existing U.S. nuclear plants, while Microsoft has a separate contract linked to the restart of a reactor at Three Mile Island. It also notes that the U.S. Department of Energy is supporting the restart of several shuttered plants, and that some upgrades are aimed at adding capacity over the next few years rather than building entirely new reactors.

The piece argues that efficiency gains in chips and software have not reduced overall energy use because industry demand keeps expanding. It cites projections that data centre electricity consumption could more than double by 2030, even with continued efficiency improvements. Because new nuclear plants can take many years to come online, the article says companies are turning to existing plants and future restarts as a faster way to secure supply.

A major concern raised is who pays for the extra grid costs while new demand is anticipated. The story focuses on PJM, the U.S. grid operator serving much of the Mid-Atlantic and Midwest, where capacity costs are passed on to consumers. It says data centre demand has already contributed to higher auction costs, and that households may see further increases if current trends continue. Regulators in some states are responding with new billing rules, while federal authorities have rejected most of PJM’s proposal to require large electricity users to bring their own supply.

The article also draws lessons for Gulf states planning major AI infrastructure, including Qatar, Abu Dhabi and Saudi Arabia, warning that large projects could create significant power demands and trade-offs for national grids.