Economists Warn AI Boom to Increase Energy Costs, Not Jobs
A new survey indicates that while AI adoption is expected to boost productivity, its primary impact will be higher electricity bills and local opposition to data centers, not widespread job creation.
Top economists are warning that the anticipated boom in artificial intelligence (AI) will likely lead to increased electricity bills rather than a significant increase in job opportunities. A survey by the World Economic Forum, which polled chief economists from both public and private sectors, found that an overwhelming majority expect AI adoption to rise and result in substantial productivity gains.
However, the findings cast doubt on the broader public benefits of the technology. This outlook is likely to intensify concerns and backlash, particularly in the United States, regarding the construction of large-scale data centers required for AI computations. Critics have expressed worries that AI could lead to job displacement and that the significant electricity and water demands of data centers will negatively impact consumers.
The survey revealed that 78 percent of experts believe investment in data centers will be a major driver of global economic growth. Conversely, 79 percent anticipate pushback from local communities in response to these developments.
The report emerges amidst escalating discussions about AI and its regulation. While U.S. President Donald Trump has previously characterized worst-case AI scenarios as a 'hoax,' calls for regulatory oversight are growing louder.
Industry leaders are attempting to proactively address these concerns, with some major AI companies collaborating. For instance, Alphabet is working with rivals Anthropic and OpenAI, the developer of ChatGPT, to mitigate public apprehension. Anthropic, OpenAI, and xAI, a division of Elon Musk's SpaceX, which are typically fierce competitors, have even jointly advocated for stricter safety checks and a temporary halt in the development of new AI systems.
Dario Amodei, CEO of Anthropic, stated, "We Must Pace the Frontier." Concurrently, Mark Zuckerberg, head of Meta (owner of Instagram and WhatsApp), and Jensen Huang, CEO of Nvidia, have indicated that AI firms could face substantial liability if their products cause harm.
Despite calls for pauses in development, some analysts suggest that these appeals may not solely stem from a desire to prevent catastrophic risks. There are reports indicating that Chinese AI developers are only months behind U.S. companies like Anthropic and OpenAI in system evolution. Some experts fear that imposing stricter regulations could allow China to gain an advantage in the ongoing AI supremacy battle with the United States. An alternative perspective is that a pause could allow public attention to subside, enabling companies to continue development with less immediate scrutiny.
The demand for computing power to train and run AI models is a significant factor contributing to the anticipated rise in electricity consumption. Data centers, which house the powerful servers and infrastructure needed for AI, are notoriously energy-intensive operations. As AI technologies become more integrated into various industries, the need for these facilities is projected to grow substantially, driving up the overall demand for electricity.