AI Demand Outstrips Utility Supply Capabilities

Published on 5.23.25

  The rapid growth of artificial intelligence (AI) is putting a significant strain on utility capacity, particularly in the context of data centers. The construction of massive AI data centers by companies like Nvidia and Foxconn is driving up electricity demands, with each Graphics Processing Unit (GPU) requiring up to four times more power than a standard CPU. Nvidia's partnership with Taiwan's Foxconn to build an AI data center in Taiwan requires 100 megawatts of power, with the initial phase starting at 20 megawatts and expanding to 60 megawatts. The Center on Global Energy Policy estimates that GPUs and servers could account for 27% of new generation capacity in 2027 and 14% of total commercial energy needs. The power surge is particularly concerning due to the significant increase in energy consumption caused by Nvidia's Blackwell chipset, which is expected to boost power consumption by 300%. This has raised concerns about the ability of utilities to supply the required energy. The construction of the AI data center will be built in phases, with potential locations including Kaohsiung and other cities across Taiwan, depending on power availability.

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