Electricity demand from data centers climbed 17 percent in 2025, far outpacing the 3 percent growth rate for global electricity demand overall, according to a new report from the International Energy Agency. The IEA's "Key Questions on Energy and AI" report found that facilities focused on AI workloads grew even faster than the data center sector as a whole, as more people use AI tools and energy-intensive applications such as AI agents become more common.

The report points to several figures illustrating the pace of the buildout. Combined capital expenditure among five large technology companies, driven largely by data center investment, rose past $400 billion in 2025 and is projected to increase by a further 75 percent in 2026. Looking ahead, the IEA projects data center electricity consumption will double by 2030, while power use at AI-focused facilities is set to triple over the same period.

The tech sector's response to rising power needs is reshaping energy markets beyond data centers themselves. Technology companies accounted for roughly 40 percent of all corporate power purchase agreements signed for renewable energy in 2025, and they have become a significant source of momentum behind small modular nuclear reactor projects. The pipeline of conditional agreements between data center operators and SMR developers grew from 25 gigawatts at the end of 2024 to 45 gigawatts today, the report found, even as supply chain bottlenecks for turbines, transformers and advanced chips continue to slow how quickly new capacity can come online.

Source: IEA - https://www.iea.org/news/data-centre-electricity-use-surged-in-2025-even-with-tightening-bottlenecks-driving-a-scramble-for-solutions