8 Jan 2026
I thank the New York Energy Forum for organising a discussion on how AI is Shaping the Global Future. Dr. Carolyn Kissane,Associate Dean of New York University’s Center for Global Affairs and Director of NYU’s SPS Energy, Climate Justice, and Sustainability Lab , Mr. Douglas Giuffre Executive Director and Head of Americas Power & Renewables at S&P Global Energy, Mr Michael Pearce ,Chief US Economist at Oxford Economics presented their thoughts on implications of AI on geopolitics, energy and economics respectively. The session was moderated by Mr. Atul Arya, Senior Vice President and Chief Energy Strategist at S&P Global.
AI continues to create headlines and draw passionate responses from experts in technology, governance and public policy. As with any new technology there are concerns around job security,the cost of operation and even on its effect on climate change. Some of these concerns are simply anxiety while others are well founded. AI is a transformative technology. There is no doubt about it and therefore it needs to be managed carefully.
The servers used in AI data centers are quite different from traditional servers used by tech companies in the last decade of growth that coincided with the rise of organisations like Google,facebook,youtube,uber,whatsapp and dozens of others. For an everyday user it feels more of the same. A chat bot is still operating on a request-response cycle that many users are familiar with but fundamentally those queries are run by GPUs. They consume more energy and heat up more.
This is corroborated by reports from the International Energy Agency and the US department of energy [1,2] which state that 415 terawatt hours (TWh), or about 1.5% of global electricity was consumed by data centers in total ,accounting for both energy needed for cooling and energy needed for performing actual operations. While on the whole this is a very small portion of energy consumption compared to the service they provide,that is connecting billions of people and powering services that improve the quality of life from education to shopping.
But the key energy issue with datacenters is not so much the absolute value of energy used ,which is indeed significant, but rather how the asymmetry in data center locations drives that energy consumption. Data centers are not evenly distributed around the world. A handful of locations in the USA,Germany and UK have the majority of datacenters in the world and even within these nations they are concentrated[3] in a few locations. Ashburn ,Virginia is known as the datacenter capital of the world [4]
Favorable policies ,prices and tax incentives attracted data center companies to invest heavily in these locations ,however those investments were made decades ago. Today with the AI boom these locations are suddenly expected to increase their energy consumption several times. If data centers were evenly distributed this load would have been shared but now a handful of locations have to somehow generate enough energy to not just satisfy the increasing power demands of these data centers but also provide enough for people who live there.
For example in Virginia,the data center capital of the world, already 23 TWh of energy is being consumed by data centers. Not unexpectedly there is some dispute on whether it would be a good idea to build more data centers in a single location.
Virginia is a net importer[7] of energy and although the government has done well to promote renewable energy [8] it's going to be strained with demand that continues to grow.
The nations and states with the majority of datacenters enjoy a commanding position in the market that brings them significant wealth. The leaders who are elected to govern will not want to see their position weakened and will do what they can to invest in the next generation of datacenter technologies. But those next generation of datacenter technologies will consume more energy than any single region can produce leaving them with one of the two options : either co-operate with other states who are generating a surplus of energy,which may be difficult given their political inclinations, or let go of the opportunity.
This energy asymmetry enables political conflict to unfold which is exactly what's happening in Virginia and other places. One set of political parties are inflaming the people about rising prices of electricity, increasing the cost of living while another is trying to highlight how those datacenters bought them wealth in the first place. Since midterms are around the corner this debate is getting more heated.
Tech corporations are increasingly collaborating with energy and power companies. Besides investment in renewables there are partnerships with gas turbine manufacturers, nuclear energy providers (especially those working on commercialising small modular reactors). Some strange new alliances have also been built like boom supersonic, the aircraft manufacturers, adapting its turbine design for energy generation.
This brings me to a much larger issue. The nations that are already industrialised can afford diversification in energy generation. But nations in Africa ,LATAM who find it difficult to manufacture even basic turbines let alone advanced tech like solar panels,hydroelectric dams etc will not be able to compete in the new data center race even at the most basic level. That is offering land to other companies to build data centers. Even for that they need to have electrical power.
Therefore I believe that it's extremely important to streamline power generation so economies of scale can be achieved.Stirling engines are particularly well suited to this transition because of their versatility: they can operate on almost any heat source—solar, nuclear, coal, or waste heat—and can be reversed for cooling, allowing economies of scale in both power generation and thermal management. This flexibility makes them especially valuable for developing economies that lack the capacity to manufacture multiple specialized energy systems. It could prove to be immensely useful in seeing through this period of transformation while encouraging industrialization and development of real tangible, always in demand skill — energy systems.
Energy is not the only point of contest though. It is no secret now that AI is replacing jobs. Thousands of people have been let go over the last few years and there will be thousands more in the coming days who will find it hard to retain their position. Tech layoffs have been especially hard for people over 40. While many of the leaders in big corporations claim that AI will create more jobs, it's a bit misleading. Here's why:
Yes, AI has the potential to create new jobs and new kinds of industries. But the people who have already lost their jobs will not be able to access those opportunities in the future unless they upgrade their skills. The challenge is that this upskilling will not always be a smooth transition. A programmer can’t over the course of a few weeks become an electrician/ electrical engineer. The people who stand to lose have a real incentive to ensure that AI transition is just. Their lives and livelihoods depend upon it. But that sentiment is not always shared by CEOs and the board members of the company. As thousands of employees were fired the remunerations to the top executives at Microsoft,meta and google increased.
AI is not the first transformative technology. What's happening today has happened before. With the advent of silicon based transistors the vacuum tube Industry disappeared almost overnight and people who had skills in making and operating vacuum tubes could not adjust to the change so quickly especially as the technology was developed in secrecy. Fresh graduates from colleges could be trained more cheaply than working salaried people with years of experience. The birth of silicon valley in california claimed thousands of jobs from people all around the USA [9]— New York, New Jersey, Pennsylvania, Massachusetts, and Illinois.
From the point of view of money AI companies have not ,at least yet, been able to deliver. As astonishing as Artificial Intelligence is, the companies have not yet been able to demonstrate a viable business model around it. Some speculate that AI may just be a bubble. That's what they said about the internet too. But that turned out to be a real wealth generator. While I'm not sure about AI transforming all business segments as it claims there is at least one specific industry I believe that AI can make a difference. That is in education.
AI-driven tools can personalize learning at scale, lower the cost of high-quality instruction, and provide continuous re-skilling for workers displaced by automation. Unlike traditional education systems, which are slow and capital-intensive, AI-enabled education can adapt rapidly to labor market needs, helping mid-career workers transition into adjacent technical roles rather than forcing complete occupational reinvention. If governed responsibly, education may become the first sector where AI delivers broad-based social returns rather than concentrated corporate gains.
REFERENCES
1 Energy demand from AI
https://www.iea.org/reports/energy-and-ai/energy-demand-from-ai
2 DOE Releases Report Evaluating Increase in Electricity Demand of Data Centers
https://www.energy.gov/articles/doe-releases-new-report-evaluating-increase-electricity-demand-data-centers
3 US Data Centers: Why America Dominates the Global Data Center Market
https://andcable.com/data-center-trends/us-data-centers-global-market/
4 Why is Ashburn the data center capital of the world?
https://www.datacenters.com/news/why-is-ashburn-the-data-center-capital-of-the-world
5. Data Center Power Consumption by State
https://www.electricchoice.com/blog/datacenters-electricity/
6 Data Centers Drive New Energy Disputes in Northern Virginia
https://broadbandbreakfast.com/dateline-ashburn-data-centers-drive-new-energy-disputes-in-northern-virginia/
7 Virginia was the top net electricity recipient of any state in 2023
https://www.eia.gov/todayinenergy/detail.php?id=64104
8 CHARTING VIRGINIA’S CLEAN ENERGY PATH
https://vcnva.org/agenda-item/charting-virginia-clean-energy-path/
9 Unlicensed Vacuum Tube Manufacturers in the United States During the 1920s
https://collections.museumsvictoria.com.au/articles/2886
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