- U.S. electric utilities expect significant sales growth due to rising data centre demand, driven by the AI boom.
- Utilities are well-positioned to outperform other sectors in 2023, with expected earnings growth of 12.4%.
OUR TAKE
The AI boom is driving unprecedented demand for data centres, pushing U.S. utilities to innovate and expand quickly. While this surge offers substantial growth opportunities, it also poses risks of overextension and infrastructure strain, urging a need for smarter, more resilient grids to sustain this momentum.
–Jasmine Zhang, BTW reporter
What happened
U.S. electric utilities are optimistic about increased demand from data centres driving the artificial intelligence boom. In the second quarter, major utilities like American Electric Power and NextEra Energy signed contracts, reflecting expectations of sales growth.
Data centres are projected to account for 25% of the economic development pipeline by 2028, potentially increasing by 2030, according to Duke Energy’s CEO. Analysts suggest utilities are poised for meaningful sales growth and could meet or exceed long-term targets after recent underperformance.
Utilities’ earnings are expected to rise by 12.4% this year, surpassing the overall S&P 500’s 10.5% growth.
Also read: Simplifying data centers: Power of Hyperconverged Infrastructure
Also read: Data centers could use 9% of US electricity by 2030, research institute says
Why it’s important
The bullish outlook of U.S. utilities on data centre demand, fuelled by the AI boom, is more than just a fleeting optimism—it’s a transformative moment for the sector.
After years of underperformance, utilities like American Electric Power and NextEra Energy are now securing major contracts that align with a surge in electricity demand projected to grow by 50% by 2030. This shift positions them at the forefront of powering the next phase of technological innovation.
Yet, while this surge brings optimism, it also raises questions about the sustainability of infrastructure and energy policies. How long can utilities ride this AI wave without overextending? As they rush to meet escalating power demands, there’s a looming need for smarter, more resilient grids. In a sector notorious for slow innovation, the AI-driven shift could be both a blessing and a potential risk.
