OpenAI Expects Industry To Use A third Of All U.S. Electricity
In quiet, OpenAI CEO Sam Altman has said that AI will use a third of all US electricity (at peak capacity) by 2033. That is 250 GW. A large nuclear power plant generates 1 GW of power. The chance that even 15 nuclear power plants will be online simultaneously is improbable. That is due to infrastructure requirements, funding, and regulations.
Renewable energy growth continues, but Trump has virtually shut down offshore wind power. He has opened 13 million acres of federal land to coal mining. Regardless of the source, according to The Information, this forecast from Altman means a need for $13 trillion, or about half of the US GDP.
Coal production will reverse. Its use dropped 40% in the last decade, according to the EIA. The Administration is also offering $625 million to recommission coal plants.
Residential Customer Problems
No one has a solution as to what happens to residential and legacy business customers of AI needs anywhere near this much power. Electricity rates are already rising in double digits year over year in some states. As an aside, this raises the cost of living and the energy section of the CPI.
Altman’s argument, shared by others in the industry, is that the US is engaged in an AI arms race with China. If AI evolves as many expect, the winner will likely experience a significant boost in productivity and, possibly, military power. This makes rating electricity a challenge that extends beyond the cost to legacy customers.
The $13 trillion is beyond what the government can underwrite, and even the largest tech companies have nowhere near this much cash on their balance sheets and do not generate enough money per year. This means the AI sector will need to turn to the capital markets. That, in turn, will gauge their risk for a technology that will spend more than it brings in, and perhaps that will be true for years.
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