energy security has become a technology issue
For years, discussions about matters pertaining to the technology sector and the energy sector were largely separate, of course with a slight amount of overlap, but primarily separate. Technology companies were seen as operating in a separate mode from energy with software, algorithms, data, and innovation as opposed to pipelines, powerplants, and fuel markets. As the advancement of technology continues to consume more energy, however, these two areas are becoming more difficult to separate cleanly.
The growth of artificial intelligence, cloud computing, and digital infrastructure is tying the future of the technology sector more closely to the availability of reliable and affordable energy. As data centers consume larger quantities of electricity and geopolitical disruptions create uncertainty in energy markets, energy security is becoming a technology-sector issue as well. The recent disruptions in global energy markets are testament to this relationship. While much of the discussion surrounding geopolitical tensions and energy supply disruptions focuses on oil prices, the more important lesson may be what these events reveal about the physical foundations of modern technology.
The technology sector often appears weightless, non-physical. Software can be distributed instantly. Cloud services seem abstract. Artificial intelligence exists in vast networks of servers that most people never see. Yet beneath these digital systems lies an enormous physical infrastructure that depends on electricity. The International Energy Agency projects that electricity consumption from data centers will more than double by 2030, reaching approximately 945 terawatt-hours globally. In the United States alone, data centers consumed roughly 183 terawatt-hours of electricity in 2024 and could consume more than 426 terawatt-hours by the end of the decade.
This growth is remarkable, but it also reveals an increasingly important constraint: technology expansion requires power. The challenge facing AI infrastructure may ultimately be less about computing capability and more about electricity availability. This becomes especially important when energy markets face disruption. Roughly one-fifth of global liquefied natural gas trade flows through the Strait of Hormuz, one of the world's most important energy chokepoints. When uncertainty emerges around the reliability of energy supply, the effects extend beyond oil markets. Higher energy costs, supply disruptions, and increased volatility can ripple through industries that depend on large quantities of electricity. Data centers are among those industries.
This does not mean that every geopolitical disruption will halt technological progress. Nor does it mean that data center growth is in imminent danger. What it does mean is that assumptions of abundant, reliable, and inexpensive energy can no longer be taken for granted. Technology firms are now confronted the issues of where reliable power may be available, how resilient infrastructure is, how exposed operations are to energy price volatility, and what may happen if supply disruptions persist longer than expected. These issues are becoming more important as energy consumption increases, AI becomes further adopted, and technology continues its advancement.
The effects extend beyond individual firms. Regions with abundant electricity generation, strong transmission infrastructure, and reliable energy supplies may become increasingly attractive locations for future technology investment. States such as Texas, with significant energy production and growing data center ecosystems, may benefit from this shift. Regions facing grid constraints, higher electricity costs, or greater dependence on imported energy may face more challenges.
In many ways, the next phase of technological competition may be shaped as much by infrastructure as by software. The broader lesson is that technology does not exist independently of the physical world. Artificial intelligence, cloud computing, and digital services ultimately rely on energy systems that remain vulnerable to market disruptions, geopolitical tensions, and infrastructure constraints. Energy security has long been viewed as an economic issue. Increasingly, it should be viewed as a technology issue as well.
Eagle Eye Insight: The future of AI and digital infrastructure may depend less on computing power alone and more on the ability to secure reliable, affordable, and scalable electricity.
