For some time now, analysts have been warning that AI-related expenditures are skyrocketing — but few realized just how fast. The IEA report reveals that global investments in data centers will total $580 billion in 2025, exceeding the spending on new oil exploration projects by $40 billion. The report highlights that this level of investment “provides a telling marker of the changing nature of modern, highly digitalized economies.”
When it comes to energy consumption, the IEA forecasts that data center electricity demand could increase up to fivefold by the end of the decade, effectively doubling today’s global total. Roughly half of this surge will occur in the United States, with most of the remainder concentrated in Europe and China.
As new facilities are built, operators are facing serious infrastructure bottlenecks. In some regions — such as Northern Virginia — the waiting time to connect a new data center to the power grid can reach up to ten years. Meanwhile, Dublin has stopped accepting new grid connection applications until 2028 due to network overload.
The IEA report also points to growing challenges in component supply chains: cables, transformers, and gas turbines are emerging as “choke points” for data center investments. At the same time, it is expected that new facilities will increasingly rely on renewable energy sources — by 2035, up to 400 TWh of electricity powering data centers could come from renewables, compared to about 220 TWh from natural gas.
For tech companies and investors, this shift means that data centers are becoming a more strategic asset than fossil fuels themselves. What once seemed unlikely is now taking shape: the world is gradually moving away from investing in oil as the engine of the economy, and toward building digital infrastructure as the foundation for modern technologies, artificial intelligence, and cloud computing.
