The energy rivalry between AI and Bitcoin mining is heating up. As tech companies improve AI, they compete with Bitcoin miners for energy. This competition is changing U.S. energy employ as both sectors drive unprecedented demand for electricity.
AI data centers are leading the race for energy consumption. These energy intensive projects have forecasts that they will consume between 85 and 134 TWh of electricity per year by 2027. This is roughly equivalent to the annual energy consumption of Norway or Sweden, and shows how much energy needs to be used to run complicated AI models like ChatGPT.
Each of these models runs on immense server farms and to run ChatGPT for each search performed GoogleIt is estimated that over 500,000 servers will be needed and annual consumption will be around 29.2 TWh.
Bitcoin mining is estimated to employ 120 TWh of energy per year. Bitcoin mining consumed 0.4% of global electricity last year, which is a huge number. Analysts expect AI to surpass Bitcoin miners in energy demand by 2027, shifting 20% of its power to AI.
Competing for resources
With the growth of both AI and Bitcoin Miningincreasingly compete for the same energy resources. Competition is growing rapidly, with huge tech companies like Amazon and Microsoft aggressively pursuing energy assets that were until recently controlled by cryptocurrency miners.
Competition is intensifying as some mining operators make money by leasing and selling energy infrastructure, while for others the risk of losing access to the electricity that sustains their operations is becoming a reality.
This is creating such a fierce competition for energy that it is estimated that by the end of the decade, data centers will consume as much as 9% of all U.S. electricity, more than twice their current consumption.
Interestingly, while cryptocurrency mining relies more on renewable energy sources (around 70% of energy consumption comes from green sources), AI data centers are mostly dependent on fossil fuels.
Image: AsianInvestor
As such, this presents a divergence in views on the sustainability of both technologies. As demand for AI continues to grow, tech companies are comparing their carbon footprint to other alternative sources, including nuclear power.
The road ahead of us
The future of energy consumption in the technology industry is highly unpredictable. As AI continues to push the boundaries, its appetite for energy will see a corresponding enhance. And unless productivity begins to radically outpace growth, the environmental consequences will surely be dire.
According to the International Energy Agency, the combined energy consumption of AI and Bitcoin mining will rise to 1,050 TWh by 2026, which is enough electricity for the entire country.
But one question will always remain, as with most high-stakes energy races: Can AI and Bitcoin mining coexist without depleting all of Earth’s resources?
How this is achieved depends on how well these industries can innovate and adapt to the growing wave of sustainable energy solutions. As they race for power, the future of technology and the environment hangs in the balance.
Featured image from Ken O./LinkedIn, chart from TradingView
