AI Data Center Build-Out Raises Concerns About America’s Future Power Needs

Annual electricity demand for U.S. data centers is expected to double over four years to 530 TWh—the current power output of Texas.

Signage of an AI data center is displayed during the Mobile World Congress in Barcelona, Spain, on March 3, 2025. Josep Lago/AFP via Getty Images

As the United States prepares to invest billions of dollars in artificial intelligence (AI) infrastructure, public officials, grid operators, and utility companies are addressing concerns about how the nation’s electricity grid will handle the expected surge in power usage.

According to a recent S&P Global Market Intelligence report, annual electricity demand for U.S. data centers is expected to reach more than 280 terawatt-hours (TWh) in 2024. By 2028, that total is projected to nearly double to 530 TWh, or slightly more electricity than Texas produced in 2022. Similarly, a Department of Energy report forecasts total energy consumption by data centers to reach between 325 TWh and 580 TWh by 2028, potentially as much as 12 percent of total U.S. electricity.

In a March 10 research note shared with The Epoch Times, Bank of America sustainability analyst Dimple Gosai said Big Tech firms have committed more than $315 billion in capital investment for AI data centers this year. Those new projects will drive 50 GW of power demand by 2030.

“The push for 24/7 firm power has intensified as AI-driven data center growth amplifies grid stability and curtailment concerns, accelerating demand for dispatchable power,” Gosai said.

The most significant impetus behind the discussion on AI data centers and power grid infrastructure is President Donald Trump’s executive order on Jan. 23, calling for a multi-billion dollar build-out in AI and data center capacity during his second term in office.

As part of the president’s action plan, the National Science Foundation issued a request for information on Feb. 6 seeking input on federal policy recommendations “to sustain America’s AI dominance.” The plan has received 268 public comments on the Federal Register docket, with the comment period set to close on March 15.

Maksim Sonin, a Houston-based energy expert and Stanford University fellow, said power generation, grid infrastructure construction, and regulatory barriers are among the substantial obstacles facing data center development at scale. “A strategy for effective public-private partnerships can definitely help with federal policy development to bolster AI innovation,” he told The Epoch Times via email.

In Arkansas, Trump’s former press secretary, Gov. Sarah Sanders, is already working to pass legislation allowing public and private partners to get speedier approval for financing and strategic investments to upgrade and build utility-scale power projects, ranging from solar arrays to modular nuclear reactors.

On Feb. 25, the Sanders-backed Senate Bill 307 fell one vote short of being approved in the Arkansas Senate. However, the governor said she still fully supports the 62-page bill, which utility giant Entergy Corp., the parent company of utility subsidiaries in Arkansas, Louisiana, Mississippi, and Texas, also backs.

“I meet with companies all the time and one of the number one topics they bring up is the need for affordable, reliable energy,” Sanders said in a statement provided to The Epoch Times.

“This legislation helps us keep the Natural State competitive by investing in our energy infrastructure and maintaining our reputation as a national leader in energy reliability and affordability while still maintaining the (state) regulatory authority.”

Although SB 307 has stalled, Silicon Valley tech giants Amazon.com Inc., Microsoft Corp., Google LLC, Meta Platforms Inc., OpenAI, and Elon Musk’s xAI have announced plans for so-called hyperscaler data centers in surrounding states that consume massive amounts of power.

For example, OpenAI, Oracle, MGX, and Softbank announced the Trump-endorsed Stargate Project on Jan. 21. This new venture intends to invest $500 billion over the next four years to build new AI infrastructure in Abilene, Texas. Arm, Microsoft, NVIDIA, and Oracle are the other key initial technology partners that will immediately deploy an initial $100 billion investment.

Elon Musk, who submitted a $97.4 billion bid to take over OpenAI in February, is also rapidly expanding xAI’s $6 billion Colossus supercomputer in Memphis, Tenn., which is located just across the Mississippi River from the Arkansas state line.

Last week, the Greater Memphis Chamber announced it was purchasing a one-million-square-foot property in southwest Memphis to expand xAI’s existing operations and support the company’s growing presence as the Digital Delta hub, attracting other major AI tech partners such as NVIDIA, Dell, and Supermicro Computer.

The ongoing Memphis expansion pursued by xAI will incorporate a minimum of one million graphics processing units, making it one of the largest supercomputers in the world. The site also features the world’s largest Tesla Megapack deployment for supercomputing and data center operations and plans for an $80 million water recycling plant that will process 13 million gallons of water daily to cool the Colossus.

To power the facility, the Tennessee Valley Authority approved a pact in November 2024 to supply the xAI supercomputer with 150 megawatts (MW) of electricity, enough to power 100,000 homes. At full capacity, Colossus will need 300 MW of electricity to power X’s Grok chatbot feature on the social media platform.

About 250 miles south of the xAI in Memphis, Meta announced in December 2024 that it is building a monumental $10 billion AI data center project in Richland Parish, Louisiana, calling it “a transformational investment that cements the state’s status as a major innovation hub and leader in the global digital revolution.”

The 4-million-square-foot data center, located an hour from the Arkansas state line, will be Meta’s largest AI center worldwide. Construction on the facility at the 2,250-acre site is expected to continue through 2030. Once operational, the northeast Louisiana data center will support Meta’s AI workloads and other advanced technologies, including Facebook, Messenger, Instagram, WhatsApp, and Threads.

Meta and Louisiana economic development officials are working with Entergy to bring at least 1,500 MW of new renewable energy to the grid to support the AI supercenter. Meta has pledged to match its electricity use with 100 percent renewable energy. However, Entergy plans to shutter its aging White Bluff and Independence coal-fired plants by the end of 2030 under a federally approved settlement agreement.

In early February, Nashville-based Silicon Ranch announced a new multi-year agreement with Microsoft to deploy up to 100 MW of renewable energy projects in the Arkansas, Mississippi, and Louisiana Delta region over the next three years.

The first four solar projects in the multi-year pact with the Silicon Valley technology giant are set to break ground over the next few months. They will be operational by the end of 2025 in communities across Arkansas and Louisiana.

In response to questions from The Epoch Times about mounting concerns over AI data centers’ impact on the nation’s disconnected electricity transmission system, the nation’s largest grid operator said it recently updated its long-term forecast on future load growth that highlights the “anticipated AI revolution.”

Based in Carmel, Indiana, the Midcontinent Independent System Operator (MISO) oversees electricity transmission across Arkansas and 14 U.S. states, including the Entergy footprint. MISO spokesman Brandon Morris told the Epoch Times via email that besides revising its long-term forecast, the 15-state grid operator is also redesigning its scenario plan to assess regional capacity expansion needs for the next 20 years.

“MISO does not have a specific number, but data centers have been identified as a significant contributor to the anticipated electricity demand growth in the U.S.,” Morris said.