Data centers, the backbone of modern technologies like Artificial Intelligence (AI) and Cryptocurrency, are experiencing rapid growth, raising concerns about their environmental impact, particularly on climate change. 

These massive facilities, typically spanning 100,000 square feet, have seen a surge in demand as AI and cryptocurrencies gain popularity. In 2022, data centers in the US accounted for over 4% of the nation’s electricity usage, this is expected to reach 6% by 2026 due to the broader adoption of AI and crypto, according to the International Energy Agency (IEA).

The IEA report also revealed that the AI industry alone is projected to consume ten times its energy demand from just three years prior by 2026. Nvidia, a major player in the AI industry, has seen its revenue soar as a result of the growing demand for its computer chips. However, the increased energy usage in data centers could jeopardize efforts to reduce carbon emissions and combat climate change.

Cryptocurrency is another significant contributor to data center energy consumption, accounting for about 0.4% of global energy consumption in 2022, equivalent to the total energy footprint of the Netherlands. In addition, a change in working patterns due to the pandemic has kept data center usage high. Data center usage spiked by as much as 35% during the COVID-19 pandemic due to the shift to remote work. and while demand has ebbed as employees returned to offices, hybrid work arrangements have kept data center usage above pre-pandemic levels.

The electric power sector is the second-largest industry emitter of carbon emissions in the U.S., accounting for nearly a quarter of the total. The information technology sector, which includes data centers, contributes about 3% of global carbon emissions, matching the share produced by the aviation industry.

Experts suggest that to mitigate the environmental impact of data centers, efforts should focus on improving energy efficiency, adopting renewable energy sources, encouraging decentralization, and shifting to edge computing. Collaboration between data center operators, technology companies, and policymakers is crucial to finding sustainable solutions that balance technological advancement with environmental preservation.