The increasing digitization and use of AI technology has led to a rise in demand for data centers. This growth, however, also means an increase in power consumption to keep these facilities running smoothly. According to a recent McKinsey article:
By 2030, the demand for power in data centers is expected to triple from its current capacity.
Access to reliable and sustainable power sources has become crucial for new data center developments.
Meeting the energy demands of generative AI and expanding data centers will require significantly more electricity than what is currently being produced in the United States.
This presents opportunities for investors as states, municipalities, and utility companies strive to balance this growing need with their sustainability goals. As stated by the article:
Investors can benefit from investing capital into utility companies’ efforts towards expanding transmission and distribution infrastructure in major markets.
Secondary markets focused on fiber build-outs or investments into power infrastructure or data center developers could also prove strategic moves.
Emerging technologies related to equipment supply needed for new power grids could open up investment opportunities.
Shortages of critical equipment have allowed smaller companies specializing in generators as well as hyperscale-focused providers interested creating PDUs (power distribution units) room grow.
There is a shortage of skilled tradespeople such as electricians needed for installation work at these expanding facilities. Investors can capitalize on this gap by consolidating subscale contractors or rethinking talent sourcing methods through training programs.
In conclusion, while there may be gaps exposed within our current power infrastructure due rapid growth within the industry; savvy investors have an opportunity not only generate positive returns but also fuel advancements within gen AI technology through investing into next generation energy solutions.”
