Efforts by tech companies to decarbonise are being complicated by the AI buoyancy, which is expected to boost demand for energy.

The market for selling hardware and services, driven by artificial intelligence boom, is estimated to hit $4.8tn by 2033, according to a Bloomberg report.

A typical AI data centre consumes as much power as 100,000 homes, according to the United Nations, and the largest centres now being built will use 20 times that. By 2030, data centres could consume as much electricity as all of Japan today.

Major tech firms should commit to fully powering data centres with renewable energy by 2030, according to UN Secretary-General Antonio Guterres.

The Big Tech also must be responsible in its use of water for cooling, Guterres said last week in New York City as he presented the UN’s new report on the energy transition, together with the International Renewable Energy Agency.

“AI can boost efficiency, innovation and resilience in energy systems, but it is also energy hungry,” Guterres said. “This is not
sustainable — unless we make it so.”

Although renewable energy is advancing exponentially across the world as costs fall, the transition away from fossil fuels is highly concentrated in advanced economies like the US and Europe, as well as China, says the UN.

Much of the developing world is falling behind. That means clean energy is not replacing fossil energy at the pace and scale needed.

But longer-term, the cost of clean power will continue to decline, a UN report predicts, as technology evolves and the supply chain
matures.

AI played a bigger role in driving demand across internet search, digital advertising and cloud computing in the April-June quarter, powering revenue growth at technology giants such as Microsoft, Meta, Alphabet and Amazon.com. Together they are expected to spend more than $344bn for the year, with much of it going to the data centres necessary to run AI models, according to a Bloomberg report.

A global digital transformation is now being fuelled by AI, cloud computing and the Internet of Things (IoT).

Half a trillion dollars was invested in data centres in 2024, with these assets consuming approximately 1.5% of electricity generated globally, according to the World Economic Forum.

Data centre electricity consumption has grown by 12% annually since 2017. It’s now projected to more than double by 2030 to roughly 945 terawatt hours – a little more than Japan’s current electricity consumption.

AI consumes around 33 times more energy than specialised software, with a single ChatGPT request using up to 10 times more electricity than a Google search.

Global digital transformation is inevitable and it is the responsibility of governments, businesses and tech leaders to promote responsible digitisation policies with efficiency benchmarks.

AI will be central to this by enabling smarter systems and unlocking new opportunities for efficiency.

According to the UN Environment Programme’s Climate Technology Progress Report 2024, AI is becoming increasingly important in mapping renewable energy potential, optimising efficiency, and facilitating interconnectivity with other sectors, such as water and agriculture.

World leaders committed to try to limit global warming to 1.5C when they signed the Paris accord. A decade later, with that goal in grave peril, nations are due to present their new emissions plans ahead of the COP30 climate summit in Brazil in November.

Countries in the Group of 20 produce the bulk of emissions so must lead in ambition, Guterres said. “The race for the new must not be a race for the few,” he said. “It must be a relay — shared, inclusive and resilient.”

To ensure innovation drives sustainability, digital growth must advance energy efficiency and increase the use of renewable energy sources.

For sure, the future is digital, but it must also be sustainable.