Big Tech’s insatiable demand for power is putting unprecedented strain on America’s outdated power grid. As artificial intelligence and cloud computing drive a surge in data center construction, energy consumption is soaring to new heights. By 2028, data centers could account for as much as 12% of all U.S. electricity demand. The sheer scale of energy needed for AI-focused data centers is staggering — a single facility can use as much electricity as 100,000 households, and the largest under construction are projected to use 20 times that amount.

This surge in demand is forcing utility companies to invest heavily in new power plants and transmission infrastructure. U.S. energy companies have already set new records in capital spending, with utility expenditures expected to rise more than 20% this year and continuing upward. The demand is showing no signs of slowing as Big Tech’s appetite for power grows with every new wave of AI development.

However, while tech giants are accelerating innovation and reshaping digital infrastructure, America’s aging grid is struggling to keep pace. In many regions, transmission and distribution networks were designed for a different era — one where electricity demand grew more slowly and the grid could be maintained with incremental upgrades. Now, utilities are racing to modernize the power system, but challenges remain. Grid congestion, regulatory hurdles, and delays in permitting for new plants often slow down progress.

In response, some tech firms are investing directly in clean energy solutions, from large-scale solar and wind contracts to emerging nuclear technologies. These efforts might help offset some of their massive energy consumption, but the underlying problem persists: the race between tech’s power needs and the evolution of America’s power grid will be a defining story for the decade ahead. For investors and policymakers alike, keeping up with Big Tech’s power demands may be just as important as tracking its next breakthrough.