Residents living near some of the recently constructed data centers designed to power the AI boom (or bubble) are reporting skyrocketing costs for electricity, as the data centers' unprecedented demands on local power infrastructure place additional strain on regional power grids. In some cases, Bloomberg reports prices rising by over 2.5 times in just a few years, making it hard for some residents to afford their daily bills.
Inflation remains a concern for some in the U.S — trade tariff uncertainty and global trade wars have meant that much of this has seen incredible instability and volatility in various markets. One area that has been doing very well, though, is technology, where the major firms have seen enormous stock price rises as part of the AI boom amidst enormous circular deals. But even that may be harming consumers, it turns out, thanks to huge increases in electricity prices.
In its analysis of Grid Status' energy data analytics, Bloomberg found that for areas located near new data centers built to run and train AI, wholesale electricity prices had risen by up to 267%. Although that cost doesn't necessarily have to be passed on to the consumer, some of its cited examples clearly show that happening.
It cites the case of Kevin Stanley, a 57-year-old man who survives on disability payments, who has seen his electricity costs rise by 80% in the past three years. Mary Ruffine from Arlington, Virginia, saw her bills rise by over 25% in a single jump. Other unnamed sources claim their budgets are being stretched to the limit by existing electricity price rises. Anything more and they're likely to hit a breaking point.
All of them live within a few tens of miles from new data centers powering what many of these companies call the future.
It's going to get worse, before it doesn't get better
The concern is that AI is really just getting started. Most of the huge data center projects announced this year haven't even broken ground yet. When they do, their electricity costs are going to be enormous. Some reports suggest that almost 10% of the entire US electricity demand will come from data centers by 2035. Recently, OpenAI teased a 10 billion GPU future where everyone on Earth might have their own personal GPU for AI.
One solution to that is the building of on-site power generation. That's how xAI's Colossus data center got up and running so quickly: by installing tens of gas turbines. Elon Musk is also transporting an entire power plant to his AI projects in order to maintain steady power. That could help stop local electricity prices from rising, and if they don't use all the power from these new facilities, maybe it could even lower costs.
Even in that ideal scenario, though, that then raises questions of the environmental impact. Power demands for these facilities aren't going to go down any time soon, and the tech companies behind them only seem too keen to accelerate their development, despite ongoing concerns over funding.
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