With countries such as the UK declaring ambitious goals for both decarbonisation and AI leadership (with the AI Opportunity Action Plan), a new report from the University of Cambridge’s Minderoo Centre suggests that AI could drive a 25-fold increase in the global tech sector’s energy use.

By 2040, the energy demands of the tech industry could be up to 25 times higher than today, the report finds, with unchecked growth of data centres driven by AI expected to create surges in electricity consumption that will strain power grids and accelerate carbon emissions. The report suggests that even the most conservative estimate for big tech’s energy needs will see a five-fold increase over the next 15 years.

The idea that governments can become leaders in AI while simultaneously meeting their net zero targets amounts to ‘magical thinking at the highest levels,’ according to the report’s authors.  

At the moment, data centres and the cooling systems they require account for nearly 1.5% of global emissions. This figure is expected to grow by 15–30% each year to reach 8% of total global greenhouse gas (GHG) emissions by 2040. This would far exceed current emissions from air travel.  

The report highlights that in the US, China and Europe, data centres already consume around 2–4% of national electricity, with regional concentrations becoming extreme. For example, up to 20% of all power in Ireland now goes to data centres in Dublin’s cluster.

‘We know the environmental impact of AI will be formidable, but tech giants are deliberately vague about the energy requirements implicit in their aims,’ notes Bhargav Srinivasa Desikan, the report’s lead author.  

‘The lack of hard data on electricity and water consumption as well as associated carbon emissions of digital technology leaves policymakers and researchers in the dark about the climate harms AI might cause.’

‘We need to see urgent action from governments to prevent AI from derailing climate goals, not just deferring to tech companies on the promise of economic growth,’ continues Desikan.

The researchers also use data from corporate press releases and ESG reports of some of the world’s tech giants to show the alarming trajectory of energy use before the AI race had fully kicked into gear.

According to the report, Google’s reported GHG emissions rose by 48% between 2019 and 2023, while Microsoft’s reported emissions increased by nearly 30% from 2020 to 2023. Amazon’s carbon footprint grew around 40% between 2019 and 2021, and – while it has begun to fall – remains well above 2019 levels.

This self-reported data is contested, note the researchers, and some independent reporting suggests that actual emissions from tech companies are much higher.

Some tech leaders, such as former Google Chief Executive Officer Eric Schmidt, argue that environmental costs of AI will be offset by its benefits for the climate crisis – from contributing to scientific breakthroughs in green energy to enhanced climate change modelling.  

Not everyone agrees.  

‘Despite the rapacious energy demands of AI, tech companies encourage governments to see these technologies as accelerators for the green transition,’ notes Professor Gina Neff, Executive Director of the Minderoo Centre for Technology and Democracy. ‘These claims appeal to governments banking on AI to grow the economy, but they may compromise society’s climate commitments.’

‘Generative AI may be helpful for designing climate solutions, but there is a real risk that emissions from the AI build-out will outstrip any climate gains as tech companies abandon net zero goals and pursue huge AI-driven profits,’ Neff continues.

AI and clean energy must align or risk derailing global climate progress, warns TBI

While the Cambridge report sounds the alarm on AI’s mounting energy toll, a new study from the Tony Blair Institute for Global Change (TBI) offers a more optimistic view. It argues that AI can in fact accelerate the clean energy transition – but only if policymakers act swiftly to integrate digital innovation with climate strategy.

The report stresses AI’s potential to drive the energy transition forward by optimising grids, improving forecasting, accelerating renewable deployment and enhancing system efficiency. Countries that align AI development with clean-energy objectives stand to gain not only climate benefits but a competitive edge in the global economy.

To realise this potential, TBI calls on governments to put in place joined-up strategies that integrate AI and energy policy. This includes creating regulatory frameworks that attract AI investment while mandating clean power usage; supporting innovation in energy-efficient AI hardware and software; and ensuring emerging economies have the infrastructure and institutional support needed to participate in and benefit from the AI era.

The report also urges international cooperation to avoid a regulatory ‘race to the bottom’ and ensure that AI infrastructure supports global climate and development goals. With AI and energy policy often siloed within governments, the report warns that failing to address their intersection could compromise both energy security and national prosperity.