AI Data Center Boom Raises Energy, Infrastructure Questions
This event previewed the upcoming in-person 'Data Centers, Nuclear Power, and Broadband Summit' conference on March 27
WASHINGTON, March 7, 2025 - In a wide-ranging discussion during Wednesday's Broadband Breakfast Live Online event, experts highlighted how artificial intelligence's rapid growth is driving unprecedented demand for data centers while creating both energy challenges and opportunities across the United States.
"In 2023, data centers consumed about 176 terawatt hours of electricity, about 4.4% of total U.S. electricity demand, but that's a tripling over 10 years since 2014," said Fatima Ahmad, senior vice president for clean energy at Boundary Stone Partners. "By 2028, we think that data center energy use will be somewhere between 6.7% to 12% of total U.S. electricity demand."
While this surge presents challenges, Ahmad emphasized the economic upside: "Increasing energy demand is actually an opportunity. It means manufacturing is increasing, which is good for the economy. It means innovation is accelerating."
Broadband Breakfast
Multi-tenant vs. hyperscaler data centers
Christian Dawson, co-founder and executive director of the Internet Infrastructure Coalition (i2Coalition), distinguished between different types of data centers driving growth.
"When people talk about data centers and data center investment right now, they are generally talking about the continued buildout of AI projects and hyperscalers," Dawson said, referring to major cloud providers like Google, Microsoft and Amazon.
While hyperscalers are single-purpose data centers operated by one large tech company, multi-tenant facilities house diverse services from many companies and serve as connection points for various internet providers and services.
"If everybody forgets about the needs of not just multi-tenant data centers but the important operations that are continuing to grow and be a vital part of the open internet, that is a problem,” said Dawson.
He described data centers as "the heart of the internet," where "all of the connective tissue heads out, all of the broadband connections, all of the different points of connection - they all come to a center at which they're pumping out in different directions."
Nuclear and clean energy solutions
The discussion also highlighted major tech companies' investments in nuclear and other clean energy sources to power their growing data center fleets.
"In January, we saw that TerraPower and Sabey Data Centers developed a strategic collaboration agreement for wide-scale deployment of Natrium plants, which are small modular reactors," Ahmad said. "Amazon funded four small modular reactors in Washington to be developed by X-Energy. They also signed a contract for nuclear power from Talen Energy's nuclear power plant in Pennsylvania."
She noted other significant developments: "Google entered into an agreement with Kairos Power for SMRs. Microsoft signed a power purchase agreement to restart Three Mile Island in Pennsylvania with Constellation Energy."
Next-generation geothermal energy also emerged as a promising solution. "It's harnessing the heat that is below the surface and using that heat to turn a turbine and generate 24/7 clean electricity," Ahmad explained.
Nimbyism and permitting challenges
The event addressed the significant "not in my backyard" challenges facing data center development. Dawson recounted a conversation with a former Virginia governor who questioned why he should care about data centers, saying "they take all the energy in an area, they're made with things that you buy from China, and they don't create a lot of jobs."
Ahmad highlighted permitting complexities across jurisdictions: "It is a challenge in this country to build energy infrastructure. Part of it is we have 50 states. States have jurisdiction over generation, [while] federal government has jurisdiction over interstate transmission of electricity."
Water usage also presents a mounting challenge. Ahmad mentioned a recent Northern Virginia data center project where "the water infrastructure challenges were actually the biggest challenges" and addressing them "would have required doubling the county's availability of water" with infrastructure that would take approximately “10 years to build."
Efficiency and innovation
Both panelists emphasized that market forces are already driving efficiency improvements. Dawson noted that regardless of policy changes, "data centers and the people that put their equipment in data centers will continue to look for power efficiency" because "energy is expensive and they want to use as little as possible."
Ahmad outlined numerous efficiency approaches: "Some of it is using more sophisticated technology, better chips, more efficient software, better integration of hardware and software. You can try to have very efficient cooling systems, use water or other types of liquid for cooling, have innovative power management at the data centers, and capture and redistribute the waste heat for nearby facilities and homes."
The Broadband Breakfast Live Online event previewed the upcoming in-person “Data Centers, Nuclear Power, and Broadband Summit” conference on March 27, which will explore these topics in greater depth with panels on data centers, AI and energy; cutting red tape for broadband and energy projects; and the role of internet exchange points in improving rural connectivity.
Data Centers, Nuclear Power and Broadband
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Panelists
- Christian Dawson, Executive Director, i2Coalition
- Fatima Maria Ahmad, Senior Vice President for Clean Energy, Boundary Stone
- Drew Clark (moderator), CEO and Publisher, Broadband Breakfast
Christian Dawson is the Co-Founder of the Internet Infrastructure Coalition (i2Coalition) where he works to make the Internet a better, safer place for the businesses that make up the Cloud. Dawson spent 16 years as an executive at web hosting provider ServInt. While there, he co-founded the Save Hosting initiative, designed to galvanize web hosting providers in their opposition of PIPA & SOPA. He went on to help found the i2Coalition to ensure that those who build the infrastructure of the Internet have a voice in all matters of public policy that affect them. He is a staunch advocate for Internet freedom as a tool for social and economic growth by fostering the growth and expansion of the Internet economy. Dawson served as the Chairman of the i2Coalition Board from 2012 to 2016. As of January 2016, Dawson has joined the i2Coalition in a full-time position as its first Executive Director.
Fatima Maria Ahmad is a Senior Vice President for Clean Energy in Boundary Stone’s Washington, D.C. office. Prior to joining BSP, she served as Senior Counsel with the House Select Committee on the Climate Crisis in the 116th and 117th Congresses. Previously, she was a Senior Solutions Fellow at the Center for Climate and Energy Solutions.
Breakfast Media LLC CEO Drew Clark has led the Broadband Breakfast community since 2008. An early proponent of better broadband, better lives, he initially founded the Broadband Census crowdsourcing tool to collect and verify broadband data left unpublished by the Federal Communications Commission. As CEO and Publisher, Clark presides over the leading media community advocating for higher-capacity internet everywhere through topical, timely and intelligent coverage. Clark also served as head of the Partnership for a Connected Illinois, a state broadband initiative.
