Whether you’re a fan of EVs, wind, or solar isn’t really the point. Energy storage is certainly important – necessary – for these sectors to mature.
The one sector where it’s also crucial is AI data centers.
They use massive amounts of power, and using and reusing that power is crucial for these businesses to operate with maximum efficiency.
This shows increasing global demand growth, but it doesn’t really reflect what’s already happening in the US, where data center growth is enormous compared to other parts of the world.
The fact is, while the US has built up significant energy storage resources, the data center growth that’s happening now will demand more energy storage very quickly.
The following chart shows that China is far ahead of the US right now, but that will have to change if US AI is going to continue its torrid growth rates.
It may be better to put the current AI data center boom in context, however. While it seems to be the greatest challenge, the fact is that there are other sectors that are also consuming huge amounts of electricity.
The other aspect of this growing demand is also EVs and similar electric vehicles. As they grow, their draw on electricity will be growing significantly as well.
On the other side of this is creating new tech that makes electricity use more efficient so that we use only what’s absolutely necessary.
That means more efficient chips that run on less energy, waste less when operational, and also materials that are easier and cheaper to access than the draws on rare earth elements like lithium, cerium, and lanthanum.
Right now, the big battery makers are in Asia, but that will change in coming years, as US tech and industry understand the need to source US materials and components.
On the chip side, NVIDIA (NASDAQ: NVDA), Alphabet (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Qualcomm (NASDAQ: QCOM) and IBM (NASDAQ: IBM) will be players. Also, companies like Arista Networks (NASDAQ: ANET), Applied Materials (NASDAQ: AMAT) and ASML (NASDAQ: ASML) will be significant players.
