Macro
August 13 2024

AI and Electricity Demand: The Very Hungry Caterpillar

25 min read

William Priest, CFA, Chairman of the Board of Directors, Co-CIO and Portfolio Manager, TD Epoch
Kevin Hebner, PhD, Managing Director, Global Investment Strategist, TD Epoch
Michael Jin, CFA, Managing Director, Portfolio Manager and Senior Research Analyst, TD Epoch

One consequence of the growth of AI is an electricity demand surge. We explore why the electricity load is growing, whether power constraints will impede AI progress, the state of our electricity infrastructure and the impact on climate change. The paper also discusses the uncertainty around future electricity demand, what increased demand might mean for commodities markets and, finally, the implications for investors.