The increasing energy demand of artificial intelligence and its impact on commodity prices

The ECB published a report highlighting the surge in energy demand driven by artificial intelligence (AI) models, which now require substantial computing power. AI-related energy consumption in data centres has been estimated at approximately 20 terawatt-hours (TWh). The report indicates that the energy consumption of major tech companies, referred to as the ‘Magnificent Seven,’ is rising significantly, contrasting with the flat energy consumption of S&P 500 companies. Data centres are expected to use 80% more energy by 2026, mainly driven by AI. The demand may be met through natural gas or renewable energy, with limited expected upward pressure on gas prices.