The annual meeting of state utility regulators is typically a humdrum affair of dry speeches and panel discussions. But in November, the scene at the Marriott in Anaheim, Calif., had a bit more flash.
The conference’s top sponsors included the nation’s biggest tech companies — Amazon, Microsoft and Google. Their executives sat on panels, and the companies’ branding was plastered on product booths and at networking events. Even the lanyards around attendees’ necks were stamped with Google’s colorful logo.
Just a few years ago, tech companies were minor players in energy, making investments in solar and wind farms to rein in their growing carbon footprints and placate customers concerned about climate change. But now, they are changing the face of the U.S. power industry and blurring the line between energy consumer and energy producer. They have morphed into some of energy’s most dominant players.
They have set up subsidiaries that invest in power generation and sell electricity. Much of the energy they produce is bought by utilities and then delivered to homes and businesses, including the tech companies themselves. Their operations and investments dwarf those of many traditional utilities.
But the tech industry’s all-out artificial intelligence push is fueling soaring demand for electricity to run data centers that dot the landscape in Virginia, Ohio and other states. Those large rectangular buildings packed with servers consumed more than 4 percent of the nation’s electricity in 2023, and government analysts estimate that will increase to as much as 12 percent in just three years. That’s partly because computers training and running A.I. systems consume far more energy than machines that stream Netflix or TikTok.
Electricity is essential to their success. Andy Jassy, Amazon’s chief executive, recently told investors that the company could have had higher sales if it had more data centers. “The single biggest constraint,” he said, “is power.”
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