High energy prices could derail Europe’s AI race with U.S. and China
High energy prices in Europe may hinder its competitiveness in the AI sector compared to the U.S. and China. Experts warn that rising electricity costs, driven by the growth of data centers, could impact economic sovereignty and technological leadership. The International Energy Agency reports that energy prices for industries in Europe are significantly higher than in the U.S. and Asia.
- ▪The rapid growth of data centers could inflate regional electricity costs by 20-40%.
- ▪Energy prices for energy-intensive industries in Europe were roughly double those in the U.S. last year.
- ▪Data centers now consume 2% of the world's electricity, up from 1.7% in 2024.
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"There's been a renewed interest in electrifying the economy after the recent Iran crisis," Olivier Darmouni, associate professor at HEC Paris who specializes in the energy transition, said during a Tuesday briefing with reporters. He found that the rapid growth of data centers could inflate regional electricity costs by 20-40% in red-hot areas such as Texas and Virginia in the U.S. or Slough in the U.K. and Paris in France.AI is a "wake-up call" to think about the energy system as a matter of economic sovereignty, he said.
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