AI data centers are driving unprecedented demand for electricity and putting renewed pressure on America’s power grid to modernize its equipment and develop greener, more efficient sources of power. Google, Meta, Microsoft and Amazon are all spending millions of dollars on local infrastructure upgrades and companies like SpaceXAI are even building off-grid power plants to power their data centers.This video examines the intersection between the environmental effects of data centers and updating the electrical grid. Done wrong, it will increase air and noise pollution, increase fossil fuel use, and raise everyone's rates. Done right, it will finance the improvement of the grid and faster adoption of renewables and batteries. CNBC is trying to be even-handed in this video, but what I called "the explicitly pro-capitalist message of the channel" inclines it to be optimistic. As I wrote seven years ago, "I shouldn't complain about it on an investment media outlet; it's like complaining about water being wet." I hope all the optimists and AI boosters are right, but I'm prepared for them to be wrong.
Google says its planned 780-megawatt data center in Pine Island, Minnesota, could offer a model for powering the AI boom. In a proposed agreement with Xcel Energy, Google says it will support 1,900 megawatts of new wind, solar and battery capacity, while minimum payments and exit fees are intended to protect local ratepayers if demand falls short.
CNBC examines whether projects like Pine Island can make the grid cleaner without shifting costs to existing customers, why some energy experts argue that smaller data centers could make better use of infrastructure already in place, and how utilities’ financial incentives can complicate efforts to build less.
That's a wrap for today. Stay tuned to see if I resume my Critics Choice Documentary Awards coverage tomorrow.
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