The AI boom is straining the power grid, and data center operators are getting nervous

Amazon CEO Andy Jassy
Amazon CEO Andy Jassy has said power is the biggest constraint facing the cloud giant as it grows its AI business. REUTERS/Brendan McDermid
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Increasingly, data center operators are concerned about future access to electricity amid historic demand growth fueled by the AI race.

Concerns over forecasting data center capacity, or planning for power needs, have grown by 9% since 2023, Uptime Institute found in its annual survey of data center owners and operators. The industry advisory said it considers the jump "significant."

The survey found that rising costs are the chief concern for data center operators this year, as they were in 2024, but concerns about power supply are quickly catching up.

Thirty-eight percent of survey respondents said they are "very concerned" about rising costs, 36% said they are "very concerned" about power constraints, and the same number of respondents said they are "very concerned" about demand forecasting.

According to the International Energy Agency, electricity demand from data centers worldwide is on track to double by 2030.

In the US, Big Tech companies are spending hundreds of billions on infrastructure— including data centers — needed to deploy and scale AI. Amazon, Microsoft, Meta, Google, and Apple are projected to spend upwards of $350 billion collectively on data centers in 2025.

Last week, as four of the five companies reported quarterly earnings, each told investors they would spend more this year than initial projections accounted for.

While rising costs — driven by inflation, labor shortages, and higher energy prices — can be solved for, data center operators don't control the electric grid.

Power is the biggest constraint facing Amazon as it grows its AI business, CEO Andy Jassy said.

Attempts at energy efficiency are not proving helpful in easing data center power constraints, the Uptime survey found.

As AI demands more power, the industry's power usage effectiveness—a metric used to track a facility's level of energy efficiency — has remained stagnant for the last six years.

While novel cooling technologies for data centers continue to emerge, the survey found that older facilities and "region-specific barriers" have prevented notable progress in energy efficiency.

Data center operators have yet to fully embrace AI when it comes to using the technology to help manage their own facilities.

"Trust in AI for data center operations depends on the use case: most operators would allow its use for analyzing sensor data and predictive maintenance tasks, but not for configuration changes, controlling equipment, or managing staff," the survey said.

Got a tip for this reporter? Contact Ellen Thomas at ethomas@insider.com.

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Ellen Thomas Business Insider
Ellen Thomas
Ellen Thomas was an investigative reporter on Business Insider's technology desk. Her recent work focused on the data center construction boom, energy, and the economy."The True Cost of Data Centers" series won the 2025 George Polk Award for Environmental Reporting and a Best in Business honorable mention from the Society for Advancing Business Editing and Writing (SABEW). Her investigation on Amazon data centers in Virginia was honored in 2024 by the National Association of Real Estate Editors. Occasionally, public records searches lead her to work off-beat. Recent coverage includes Floyd Mayweather's financial troubles and ICE's $1 billion in warehouse purchases under former DHS Secretary Kristi Noem. Before joining Business Insider, Ellen spent five years covering retail and the beauty industry for WWD. Selected stories:Data centersAmazon built a data center empire in Northern Virginia. It's using as much energy as a major city.Data centers have become an economic powerhouse. Now they're throwing their weight around in Virginia politics. SCOOP: An on-site natural gas plant will power Stargate's first data center in TexasIn the biggest market for data centers, Big Tech flashes cash and influenceOracle got big tax breaks in Texas. Now its going back for more.ICEHere's where ICE is spending big to turn warehouses into detention centersFloyd MayweatherIRS seeks $7.3 million from Floyd MayweatherFloyd Mayweather accused in lawsuits of owing millions for luxury watches, gold, and rent on palatial apartmentMoney to blow: Inside Floyd Mayweather's lavish, debt-filled post-boxing lifeFloyd Mayweather's fitness business is on the ropes. Gym owners are punching back.Floyd Mayweather Jr. bragged about a $400 million property deal. There's just one problem. SalesforceSCOOP: Slack CEO Stewart Butterfield to exit in JanuaryLeaked document lays out Salesforce plan to hit 30% marginsBenioff v. Benioff: Inside 18 Difficult Months at SalesforceRetailUnilever bought Dollar Shave Club for $1 billion. Now, insiders — and even its own CEO — are calling the acquisition a failure. Lady Gaga's Haus Beauty launch on Amazon bombed and triggered a 'mass exodus' of talent. Now its pinning its hopes on a rebrand and Sephora debut. How a German princess and political journalist and with a powerful royal social network became the CEO of the Kardashian beauty brands