October 2025 Not Industrial Production

Normally this space would be reserved for the October 2025 Industrial Production release from the Federal Reserve.  Alas, it was not published due to challenges caused by the government shutdown.  Instead, we’ll take quick look at one of the components of our nation’s industrial output: utilities.  More specifically, we’ll explore how all the computing power needed for artificial intelligence is impacting them.

Artificial intelligence is power hungry.  It is driving a dramatic surge in electricity use across the U.S. grid.  According to this MIT Technology Review, energy consumption by data centers has risen 80% from 2020 to 2025.  The expectation is for further growth, and those living closest to these centers are already feeling it in their monthly bills.  They anticipate data centers consuming nearly as much energy as Japan by the end of this decade. 

It isn’t all bad, however. The technology is emerging as a potential solution for improving the grid.  Utilities are deploying AI-driven analytics to improve integrating new energy sources by supporting forecasts which should help balance supply with demand more efficiently. 

The challenge could be similar to a paradox municipalities face: infrastructure being consistently behind growth.  Like the revenues for pothole repairs coming after the newest residents have added pressure to the existing roads, this strain on the current grid is heavier as sophisticated models are run trying to fix the problem.  Achieving a balance between the demands of current customers as well as future agents will be critical to ensure the electricity grid remains stable, reliable, and affordable as AI helps uncover both its challenges and opportunities.