A new Gartner, Inc. report has revealed that AI and generative AI are fuelling a steep rise in electricity consumption, with data center energy demand projected to increase by as much as 160%. Consequently, Gartner predicts that 40% of existing AI data centers will be operationally constrained by power availability by 2027.

“The explosive growth of new hyperscale data centers to implement GenAI is creating an insatiable demand for power that will exceed the ability of utility providers to expand their capacity fast enough,” said Bob Johnson, VP Analyst at Gartner. “In turn, this threatens to disrupt energy availability and lead to shortages, which will limit the growth of new data centers for GenAI and other uses from 2026.”

Further, the report also estimates the power required for data centers to run incremental AI-optimized servers will reach 500 terawatt-hours (TWh) per year in 2027, which is 2.6 times the level in 2023.

Furthermore, Gartner suggests organizations determine the risks potential power shortages will have on all products and services. According to Gartner, the impending power shortages will increase the price of power, thereby raising the cost of operating LLMs.