A recent report from the global risk firm DNV reveals that the demand for electricity to power artificial intelligence (AI) is set to skyrocket. The report predicts a tenfold increase in AI electricity demand over the next five years, driven largely by the rapid growth of AI data centers. This surge is already affecting American families, with electricity costs rising nearly 7% in the past year.
As the U.S. strives for dominance in AI, a significant challenge looms: the need for power. The Department of Energy (DOE) projects that data centers, which are essential for AI operations, will increase their share of total U.S. electricity consumption from over 4% today to 12% by 2028. A recent survey by Deloitte found that power and grid capacity constraints are the top concerns for power companies and data center operators as they work to expand infrastructure.
This urgent demand for energy was a key factor in a recent meeting in Washington, D.C., where U.S. and Israeli officials signed a Memorandum of Understanding (MOU) to enhance cooperation on AI innovation. The agreement aims to leverage Israel’s strengths in energy systems and technology to support America’s AI ambitions.
Former President Donald Trump emphasized the importance of the U.S.-Israel alliance, highlighting Israel’s innovative economy and shared values with the United States. Despite its small size, Israel has the highest concentration of high-tech companies globally and ranks high in research and development spending.
Israel’s unique geopolitical situation has fostered a culture of rapid innovation, particularly in deep technology. This innovation has contributed significantly to advancements in various sectors, including AI. Israeli technologies such as InfiniBand have become crucial for AI operations, while Israeli-designed microchips power major cloud services like Amazon Web Services.
In response to the growing need for innovation, the Israel Innovation Authority (IIA) has launched initiatives to boost the country’s technological capabilities. This includes a substantial investment of over $450 million aimed at enhancing research and development in energy systems and data centers.
This shift in focus aligns with U.S. strategic priorities amid rising competition from countries like China. Both nations recognize that collaboration can lead to the development of technologies crucial for the future, including energy storage and grid optimization. By combining U.S. resources with Israeli innovation, they hope to create jobs and strengthen supply chains.
As the world transitions from oil and manufacturing to a new era defined by energy intelligence, the partnership between the United States and Israel stands to play a pivotal role in shaping the future of technology.
