Have you ever used artificial intelligence (AI)? Not sure? If you’ve ever conversed with a customer service representative through a chatbot, used (or been annoyed at) auto-correct in a text message, or received unsolicited product recommendations from your favorite online shopping site, then you’ve used AI.
We all use AI daily, without even knowing it. But most of us probably don’t give any thought to what it takes to power AI. It requires massive data centers that need to be powered by a reliable energy source. And that source is natural gas. Natural gas is the only energy source that’s plentiful, reliable and affordable enough to meet the increased energy demands created by future technologies like AI. For Energy Transfer, that amounts to an enormous opportunity. No other energy infrastructure company can match Energy Transfer when it comes to our natural gas assets – from midstream operations to intrastate and interstate pipelines to storage facilities. For these reasons, Energy Transfer is uniquely positioned to fill this need. It’s why some are even singling us as an AI stock in the energy industry.
A Growing Need for Power
The incredible innovation around AI and other technologies like cloud computing and crypto mining has caused a spike in new data centers, the massive warehouses of computers and infrastructure – some as large as 10 American football fields – that make these technologies possible. And while data centers have been around for many years, the ones that drive newer technologies like AI require exponentially more power than traditional data centers of the past.
According to Goldman Sachs Research, data centers currently consume only one to two percent of the world’s power, but the demand for data center power is expected to grow 160 percent by 2030.
To put the amount of power that AI requires into perspective, consider that the typical ChatGPT query requires almost 10 times more energy than a Google search. Or that Nvidia Corporation’s H100, a graphics processing unit (GPU) chip designed specifically for AI applications, consumes up to 700W of energy at peak operation. That’s more power consumption than the average American household[JT1] .
Now imagine a single data center running tens of thousands of these chips. At peak power consumption, it can overload the power grid of an entire region or state.
All this demand for more and more computing power, along with growing population centers, is straining our nation’s aging grid, and utilities simply can’t keep up.
That’s why natural gas is the key to solving this problem: it’s reliable. Natural gas is already the largest source of U.S. electricity generation, currently making up about 43 percent of the electricity generated in our country.
Renewable energy sources like wind and solar power are important and have their place but are intermittent at best – unreliable for 24/7 power generation. Natural gas remains viable while wind and solar are unavailable or when renewable energy storage is at capacity.
The need for more energy is only going to grow as our cities’ populations expand and demand for cutting-edge technologies increases. Through our leadership in natural gas, Energy Transfer is at the forefront of powering our digital future.
