That’s what the International Energy Agency (IEA) said in a release sent to Rigzone recently, which highlighted that the increase came despite “tightening bottlenecks driving a scramble for solutions”.

The release – which pointed to a new report from the organization that “explore[d]… AI’s growing energy footprint, options for meeting data center power demand, and impacts on energy affordability, security and wider economy” – outlined that the new analysis finds that the field “has continued to develop at speed”.

“Driven by data center investments, the capital expenditure of five large technology companies surged to more than $400 billion in 2025 and is set to increase by a further 75 percent in 2026,” the IEA said in the release.

“Electricity demand from data centers soared by 17 percent in 2025, and that of AI-focused data centers climbed even faster – well outpacing growth in global electricity demand of three percent,” the IEA added.

The IEA stated in its release that, according to its report, power consumption per AI task is declining rapidly, “with efficiency improving at a rate unprecedented in energy history”. It noted, however, that more people are using AI, and said energy intensive uses, such as AI agents, are on the rise.

“As a result, electricity consumption from data centers is set to double by 2030, and power use from those focused on AI is poised to triple,” the IEA projected.

“At the same time, AI deployment is increasingly coming up against a range of physical bottlenecks, limiting the rate at which data centers can expand in the near-term,” it added.

“Supply chains for energy technologies such as gas turbines and transformers, as well as for advanced chips and IT components, have tightened over the past year – and the swelling pipeline of data center projects is straining planning and regulatory systems, holding up grid connections and other necessary approvals,” it continued.

To solve the energy challenges at hand, the tech sector is adopting new approaches, the IEA stated in the release, highlighting that the market accounted for around 40 percent of all corporate power purchase agreements for renewables signed in 2025, and that it is also “now a major source of momentum for the nuclear and advanced geothermal industries”.

“The pipeline of conditional offtake agreements between data center operators and small modular reactor (SMR) nuclear projects has grown from 25 gigawatts at the end of 2024 to 45 gigawatts today, indicating that the momentum behind AI could accelerate the commercialization of new energy technologies,” the IEA said.

“Constrained by slow grid connections, data center developers are also advancing a large number of projects with onsite natural gas-based power generation, largely in the United States,” it added.

“First of its kind IEA data from satellite-based tracking shows that many of these projects remain in their early stages, highlighting the technical and financial hurdles that need to be overcome,” it continued.

The IEA noted that one of the key challenges is that AI data centers have rapid and large swings in demand. It pointed out that meeting their power needs reliably can stretch the technical capabilities of onsite gas plants.

“For this reason, onsite battery storage is becoming a critical technology for the next generation of AI data centers, which could make them an asset to grids with the right incentives,” the IEA revealed.

In the release, IEA Executive Director Fatih Birol said, “the IEA was early in recognizing that there is no AI without energy – and that countries that provide secure, affordable and rapid access to electricity will be one step ahead”.

“Now, we see that while AI is still an energy taker, it is also becoming an energy maker – driving forward innovative solutions like next-generation nuclear reactors, flexible data centers and long-duration energy storage,” he added.

“To help countries that seize on this opportunity to modernize their energy systems, and to tackle bottlenecks and other concerns associated with AI’s rapid growth, collaboration between policymakers and the energy and tech sectors remains crucial,” he continued.

The IEA highlighted in the release that its report draws on the latest data and analysis and close tracking of technological and economic developments in the AI sector. It also pointed out that the report builds on the IEA’s “landmark” Energy and AI report, which was released in April 2025.

In a release posted on its site back in April last year, the IEA said a “major” new report from the organization had brought “groundbreaking data and analysis to one of the most pressing and least understood energy issues today, exploring AI’s wide range of potential impacts”.

The IEA noted in that release that, according to its report, AI has the potential to transform the energy sector in the coming decade, “driving a surge in electricity demand from data centers around the world while also unlocking significant opportunities to cut costs, enhance competitiveness and reduce emissions”.

This release highlighted that the IEA’s report offered “the most comprehensive, data-driven global analysis to date on the growing connections between energy and AI”. The report drew on new datasets, at the time, and “extensive” consultation with policy makers, the tech sector, the energy industry and international experts, the IEA revealed in that release.

“AI is one of the biggest stories in the energy world today – but until now, policy makers and markets lacked the tools to fully understand the wide-ranging impacts,” Birol highlighted in that release.

“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” Birol added.

“AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it,” he continued.

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