What happened
Global electricity use by data centres rose 17% in 2025, according to the International Energy Agency. The agency also says five major technology companies invested more than $400 billion during the year, with their capital spending expected to increase by roughly three-quarters in 2026.
Those numbers describe a physical build-out behind the software boom: substations, power contracts, cooling systems, land and long construction schedules.
Why it matters
AI products can scale online in days, but energy infrastructure cannot. A project may have funding and chips yet still wait years for a grid connection. That mismatch is pushing location, electricity and permitting closer to the centre of AI strategy.
The effects are local. A data centre can bring investment and tax revenue, but it can also compete for scarce grid capacity or water. The balance depends on where it is built, what powers it and who pays for upgrades.
What is confirmed
The IEA’s figures show rapid growth and a scramble for solutions. They do not mean data centres are responsible for most global electricity demand. The pressure is concentrated in particular regions, where a single new campus can be large relative to the local system.
What to watch
Watch connection queues, long-term power contracts and new generation, but also efficiency. Better chips, model design and cooling can reduce energy used per task even while total demand rises. Both sides of that equation matter.
Sources
- International Energy AgencyIEA analysis of 2025 data-centre electricity use and investment.
- International Energy AgencyElectricity 2026 report and forecast context.