{ "title": "AI Needs More Abundant Power Supplies to Keep Driving Economic Growth", "publication": "IMF Blog, May 13, 2025", "sourceUrl": "https://www.imf.org/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth", "canonical": "https://www.imf.org/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth", "overlayPath": "/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/index.md", "summary": "The power-hungry technology requires policies to help expand electricity supplies, incentivize alternative sources, and help contain price surges", "sections": [ { "heading": "Summary", "content": "- Artificial intelligence is an emerging source of productivity and economic growth and is reshaping employment and investment.\n- AI requires growing amounts of electricity for data centers, creating major implications for global electricity demand and power grids.\n- The blog summarizes analysis included in the IMF’s April 2025 World Economic Outlook and an IMF working paper: Power Hungry: How AI Will Drive Energy Demand. For broader AI impacts, it cites the working paper: The Global Impact of AI: Mind the Gap." }, { "heading": "Key statistics and projections", "content": "- World data centers consumed as much as 500 terawatt-hours of electricity in 2023 (Organization of the Petroleum Exporting Countries estimate).\n- The 2023 total was more than double the annual levels from 2015-19.\n- OPEC projects data center electricity consumption could triple to 1,500 terawatt-hours by 2030.\n- By 2030, electricity used by data centers alone would be comparable to that of India, the world's third-largest electricity user.\n- Data center consumption by 2030 would be 1.5 times as much power as projected consumption by electric vehicles.\n- Power needed for US server farms is likely to more than triple, exceeding 600 terawatt-hours by 2030 (medium-demand scenario projection by McKinsey & Co).\n- Under current energy policies, the AI-driven rise in electricity demand could add 1.7 gigatons in global greenhouse gas emissions between 2025 and 2030 — about as much as Italy’s energy-related emissions over a five-year period." }, { "heading": "Main implications", "content": "- Rapid growth in electricity demand from AI can strain power grids and require large additions to supply capacity.\n- If electricity supply is responsive, increased demand will stimulate supply and lead to only a small increase in power prices.\n- If supply responses are sluggish, power prices could rise steeply, hurting consumers and businesses and possibly curbing growth of the AI industry itself.\n- The boom in building new data center facilities underscores urgency for effective energy strategies to ensure adequate supplies for surging demand." }, { "heading": "Uncertainties and scenarios", "content": "- Demand for computing and electricity from AI platforms is subject to wide uncertainty.\n- Efficient, open-source AI models like DeepSeek lower computing costs and electricity demand.\n- Lower costs may increase AI usage, offsetting efficiency gains.\n- More energy-intensive reasoning models raise electricity demand.\n- Net effect on electricity demand is uncertain; this uncertainty may delay energy investments and cause higher prices." }, { "heading": "Policy recommendations", "content": "- Policymakers and businesses must collaborate to ensure AI achieves its full potential while minimizing costs.\n- Implement policies that incentivize multiple energy sources to:\n - Enhance electricity supply.\n - Help mitigate price surges.\n - Contain emissions.\n\nSource: AI Needs More Abundant Power Supplies to Keep Driving Economic Growth, IMF blog, May 13, 2025.\n\n---\n\n Content in this bundle\n\n- Commodity Special Feature\n - Commodity Special Feature (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Commodity Special Feature (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Ganchimeg Ganpurev\n- Andrea Pescatori\n- April 2025 World Economic Outlook\n- Power Hungry: How AI Will Drive Energy Demand\n- The Global Impact of AI: Mind the Gap\n\nSource: https://www.imf.org/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth" } ], "bullets": [ "[Markdown version](/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/index.md)", "[Structured JSON version](/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/index.json)", "[Bundle manifest](/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/bundle-manifest.json)", "Authors: Christian Bogmans, Patricia Gomez-Gonzalez, Giovanni Melina, Sneha Thube", "Published: May 13, 2025", "Artificial intelligence is an emerging source of productivity and economic growth and is reshaping employment and investment.", "AI requires growing amounts of electricity for data centers, creating major implications for global electricity demand and power grids.", "The blog summarizes analysis included in the IMF’s April 2025 World Economic Outlook and an IMF working paper: Power Hungry: How AI Will Drive Energy Demand. For broader AI impacts, it cites the working paper: The Global Impact of AI: Mind the Gap.", "World data centers consumed as much as 500 terawatt-hours of electricity in 2023 (Organization of the Petroleum Exporting Countries estimate).", "The 2023 total was more than double the annual levels from 2015-19.", "OPEC projects data center electricity consumption could triple to 1,500 terawatt-hours by 2030.", "By 2030, electricity used by data centers alone would be comparable to that of India, the world's third-largest electricity user.", "Data center consumption by 2030 would be 1.5 times as much power as projected consumption by electric vehicles.", "Power needed for US server farms is likely to more than triple, exceeding 600 terawatt-hours by 2030 (medium-demand scenario projection by McKinsey & Co).", "Under current energy policies, the AI-driven rise in electricity demand could add 1.7 gigatons in global greenhouse gas emissions between 2025 and 2030 — about as much as Italy’s energy-related emissions over a five-year period.", "Rapid growth in electricity demand from AI can strain power grids and require large additions to supply capacity.", "If electricity supply is responsive, increased demand will stimulate supply and lead to only a small increase in power prices.", "If supply responses are sluggish, power prices could rise steeply, hurting consumers and businesses and possibly curbing growth of the AI industry itself.", "The boom in building new data center facilities underscores urgency for effective energy strategies to ensure adequate supplies for surging demand.", "Demand for computing and electricity from AI platforms is subject to wide uncertainty.", "Efficient, open-source AI models like DeepSeek lower computing costs and electricity demand.", "Lower costs may increase AI usage, offsetting efficiency gains.", "More energy-intensive reasoning models raise electricity demand.", "Net effect on electricity demand is uncertain; this uncertainty may delay energy investments and cause higher prices.", "Policymakers and businesses must collaborate to ensure AI achieves its full potential while minimizing costs.", "Implement policies that incentivize multiple energy sources to:", "**Commodity Special Feature**", "[Ganchimeg Ganpurev](https://www.imf.org/en/Blogs/authors?author=Ganchimeg+Ganpurev)", "[Andrea Pescatori](https://www.imf.org/en/Blogs/authors?author=Andrea+Pescatori)", "[April 2025 World Economic Outlook](https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025)", "[Power Hungry: How AI Will Drive Energy Demand](https://www.imf.org/en/Publications/WP/Issues/2025/04/21/Power-Hungry-How-AI-Will-Drive-Energy-Demand-566304)", "[The Global Impact of AI: Mind the Gap](https://www.imf.org/en/Publications/WP/Issues/2025/04/11/The-Global-Impact-of-AI-Mind-the-Gap-566129)" ], "related": [ { "title": "Commodity Special Feature", "role": "special-feature", "sourceUrl": "https://www.imf.org/-/media/files/publications/weo/2025/april/english/commodityspecialfeature.pdf", "summary": { "path": "/-/media/files/publications/weo/2025/april/english/commodityspecialfeature.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/weo/2025/april/english/commodityspecialfeature.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/index.md", "json": "/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/index.json", "bundleManifest": "/en/blogs/articles/2025/05/13/ai-needs-more-abundant-power-supplies-to-keep-driving-economic-growth/bundle-manifest.json" }, "generatedAtUtc": "2026-08-25T17:37:04.875Z" }