From railroads and steel mills to computers and the internet, every major technological revolution in American history has depended on one essential ingredient: energy. Today, the next wave of innovation— driven by artificial intelligence, cloud computing, and massive data centers—is once again increasing the country’s demand for electricity. As the digital economy expands across the United States, however, it is exposing a problem that has been building for decades: America has not consistently invested in the energy infrastructure needed to support long-term growth.
Data centers are the backbone of the modern digital economy. They power everything from online banking and streaming services to artificial intelligence systems and cloud storage. As AI technology advances and the demand for digital services grows, the electricity required to operate these facilities is increasing dramatically. According to research from Goldman Sachs, global power demand from data centers will increase 50% by 2027 and by as much as 165% by the end of the decade. Analysts say the rapid expansion of artificial intelligence systems is a major reason for the surge in demand, as AI processing requires enormous computing power and significant energy for both operations and cooling.
Technology companies are racing to build new data centers to support cloud computing and AI development across the United States. Whether communities fully welcome them or not, these facilities are becoming a defining piece of modern infrastructure. Newer data centers are far more efficient than older facilities. Many use advanced cooling technologies, including closed-loop systems designed to reuse water and reduce overall energy consumption. These improvements have made modern data centers significantly more efficient than those built a decade ago. However, efficiency does not eliminate the scale of the demand. Large data center campuses can still require a lot of electricity.
The issue facing the United States is not necessarily the growth of data centers themselves, but whether the nation’s energy infrastructure is prepared to support the surge in electricity demand that comes with them. Much of the American electric grid was built decades ago for a very different economy. According to the U.S. Department of Energy, much of the country’s transmission infrastructure dates back to the 1960s and 1970s, and a significant portion of transmission lines are now more than 25 years old. These systems were designed for an era when electricity flowed primarily from large centralized power plants to homes and businesses. They were not built to support a digital economy filled with hyperscale data centers, electric vehicles, advanced manufacturing, and rapidly expanding computing infrastructure.
Warnings about the consequences of insufficient investment in power infrastructure are not new. In fact, the United States has experienced the effects of strained electrical systems before. Rolling blackouts— planned outages that temporarily shut off power to certain areas to prevent a total grid collapse—have occurred periodically when demand exceeded available electricity supply. One of the most notable examples took place during the California electricity crisis from 2000-2001. During that period, a combination of market issues, supply shortages, and a lack of new power plant construction left the state unable to meet rising electricity demand. California had not significantly expanded its power generation capacity for years, even as the population and economy continued to grow. When demand surged during periods of high usage, utilities were forced to implement rolling blackouts across the state to stabilize the grid. Researchers analyzing the crisis later concluded that insufficient investment in generation capacity played a key role in the power shortages that led to those outages.
Rolling blackouts are not simply an inconvenience. They are a warning sign that the energy system has reached its limits. They occur when the grid can no longer reliably supply the electricity required by homes, businesses, and industry. Rolling blackouts still occur to this day in Texas and California with extreme weather and grid strains. While the United States has generally maintained one of the most reliable electrical systems in the world, events like these demonstrate what can happen when infrastructure investments fail to keep pace with economic and technological growth.
Today, the country finds itself approaching another turning point. After years of relatively flat electricity demand, the United States is entering a period where power consumption is expected to rise significantly once again. Analysts and grid operators warn that without new power generation, expanded transmission networks, and modernized infrastructure, some regions may struggle to keep up with demand in the coming decades.
Meeting that challenge will also require a strong and highly skilled workforce capable of building and maintaining the infrastructure that powers the digital economy. Constructing power plants, expanding transmission lines, and developing new energy systems depends on trained electricians, operating engineers, and other skilled trades professionals. As new energy infrastructure and data center projects move forward, it is critical that these jobs remain good-paying careers that support local communities. Ensuring strong labor standards, apprenticeship training programs, and protections that prioritize local, skilled workers will help guarantee that the economic benefits of this infrastructure investment stay in the regions where these projects are built.
History shows that technological revolutions are always accompanied by large investments in infrastructure. The industrial revolution required railroads, steel production, and new sources of energy. The automobile era required highways and a massive expansion of petroleum production and refining. The information age required fiber networks and global telecommunications systems. Today’s digital economy driven by artificial intelligence and massive computing power requires something just as fundamental: reliable, abundant electricity.
Data centers may be one of the most visible symbols of this transformation, but they are only part of a much larger shift toward an increasingly electrified economy. Meeting the energy needs of this new era will require significant investment in power generation, expanded transmission capacity, grid modernization, and the skilled workforce needed to build and maintain these systems.
The United States has overcome infrastructure challenges before. The expansion of the national power grid, the interstate highway system, and rural electrification were all massive undertakings that reshaped the country and enabled decades of economic growth. The challenge facing the nation today is similar in scale. If the United States wants to lead the next technological revolution, it must first ensure that the energy infrastructure powering that future is ready. Because every technological breakthrough, from the steam engine to the supercomputer, ultimately runs on the same thing: power.