Electricity companies across the U.S. are struggling to figure out how much demand will actually materialize from the artificial intelligence boom, as the stock market speculates that vast sums of money will be spent on infrastructure to support a big data center buildout.
“There is a question about whether or not all of the projections, if they’re real,” Willie Phillips, who served as chairman of the Federal Energy Regulatory Commission from 2023 until April 2025, told CNBC. “There are some regions who have projected huge increases, and they have readjusted those back.”
The AI companies are rolling out ambitious plans to build server farms that in some cases would consume as much electricity as entire cities. But the tech industry is shopping the same big projects around to multiple utilities as they look for the quickest access to power.
“We’re starting to see similar projects that look exactly to have the same footprint being requested in different regions across the country,” GridUnity CEO Brian Fitzsimons told CNBC. GridUnity uses software to give utilities and transmission operators a clearer picture of where power projects are requesting connections across the patchwork U.S. electric grid.
This data center shopping is making it difficult for utilities to determine how much power generation they will need to ensure the reliability of the electric grid. Electricity prices, meanwhile, are rising for consumers because power supply is already struggling to keep pace with demand.
FERC Chairman David Rosner warned in September that the difference of a few percentage points in electricity load forecasts “can impact billions of dollars in investments and customer bills.”
“Put simply, we cannot efficiently plan the electric generation and transmission needed to serve new customers if we don’t forecast how much energy they will need as accurately as possible,” Rosner said.
Constellation Energy CEO Joe Dominguez warned of the problem on the nuclear power operator’s May earnings call: “I just have to tell you, folks, I think the load is being overstated. We need to pump the brakes here.”
AI bubble fears
The stock market, however, is not really pumping the brakes. The steady pace of big data center announcements is fueling one of the biggest rallies in power company stocks in two decades.
The utility sector has gained about 21% this year after rallying more than 19% in 2024. The companies that supply the U.S. with electricity have gained nearly $500 billion in value over that two-year period. The last time utilities advanced more than 40% in consecutive years was in 2003 and 2004.
OpenAI CEO Sam Altman warned in August that the stock market is facing an AI bubble, cautioning investors that they were getting “overexcited.”
While the exact magnitude of the coming demand is uncertain, experts generally agree that the U.S. is facing a historic increase in electricity consumption after a long period of flat growth. Existing data centers point to what is coming, Rob…
Read More: Utilities are grappling with how much AI data center power demand is real
