The surge in demand for AI chips is significantly increasing power usage, particularly in East Asia, where most chip manufacturing occurs. Countries like Taiwan, South Korea, and Japan, which still heavily rely on fossil fuels for power, are experiencing a substantial rise in electricity consumption.
Nearly 984 gigawatt-hours (GWh) of electricity were used last year for AI chip manufacturing, a 350% increase from 2023. This has led to a significant rise in carbon emissions, with emissions from electricity generation increasing more than four-fold to 453,600 metric tons of carbon dioxide equivalent in 2024.
The growing demand for AI chips is raising concerns about the environmental impact, particularly in regions where fossil fuels dominate the power grid. Greenpeace is urging tech companies like Nvidia, Microsoft, and Google to support their suppliers in increasing renewable energy procurement and targeting 100% renewable energy across their supply chains by 2030.
Some chipmakers, such as Taiwan Semiconductor Manufacturing Co (TSMC), are transitioning to renewable energy, but the pace is considered slow. TSMC has reported a decline in emissions per unit, but more needs to be done to address the growing carbon footprint of AI chip manufacturing.
Global electricity demand for AI chipmaking is expected to reach 37,238 GWh by 2030, surpassing Ireland's current electricity consumption. This highlights the need for the industry to adopt more sustainable practices and reduce its reliance on fossil fuels to mitigate the environmental impact of AI chip production.
