AI data centres spark $3tn global boom, driving massive energy demand, water concerns, and heavy tech investments

Technology

Artificial intelligence is fueling an unprecedented global boom in data centre construction, with Morgan Stanley estimating $3tn will be spent worldwide between now and 2029. Half of that will go to construction, while the rest will fund costly Nvidia-powered hardware critical to AI’s rapid growth. Unlike traditional data centres, AI hubs require extreme density to allow parallel processing, minimizing latency between chips. This setup demands enormous electricity — gigawatts at peak — and heavy water use for cooling, raising environmental concerns.

Tech giants are investing heavily in solutions. Microsoft has turned to nuclear projects, including restarting power at Three Mile Island, while Google aims for carbon-free energy by 2030. Amazon Web Services, already the world’s largest corporate buyer of renewables, continues expanding. Still, experts warn of risks. Surging energy spikes challenge local grids, while communities raise objections over water use. Critics also caution against overhyped “bragawatts,” questioning whether all projects will deliver returns.

Despite uncertainties, analysts believe AI’s transformative potential ensures continued investment. As one expert put it, “AI data centres are the real estate of the tech world.”