Asia is gearing up for a significant increase in power demand driven by the expansion of AI technologies. Data centers, essential for AI operations, are expected to see investments exceeding $100 billion in the coming years. The International Energy Agency notes that a single ChatGPT request can consume ten times the power of a Google search, highlighting the immense energy needs of AI.

Investment in Power Grids and Data Centers

To support this growth, substantial investments in power grids are necessary. Currently, grid limitations are slowing the development of data centers and AI adoption. Countries like the U.S. and Singapore have restricted data center growth due to power constraints, but Singapore is now planning to expand its data center capacity with additional power generation.

Role of Renewable Energy in Data Centers

Morgan Stanley predicts a 20% annual growth in data center capacity in Asia through 2027, with power requirements doubling by 2027 and tripling by 2030. Reliable power infrastructure is drawing significant investments from major tech companies in Japan, Malaysia, and Thailand. For instance, Nvidia has partnered with Malaysia’s YTL Power to ensure stable and clean power for its new AI-based data center.

Regional Highlights: Japan, Malaysia, Thailand

Southeast Asia is emerging as a preferred location for data centers due to affordable power, land, and strong grid connections. Malaysia, for example, has received over 70 applications from data centers seeking grid connections, potentially doubling the country’s power demand. Similarly, Japan is set to see a reversal in its long-standing decline in power demand due to investments from tech giants.

Future Prospects and Efficiency Improvements

Most data centers aim to source clean power, aligning with regional goals to expand solar and wind energy. Morgan Stanley projects 57 GW of new renewable energy capacity by 2030 out of a total 95 GW increase in Asia. Despite the current reliance on gas-fueled power, advancements in efficiency, such as liquid-cooled data centers, are expected to continue.

Asia’s focus on affordable, reliable power and supportive policies positions it to drive AI adoption and data center growth, creating a strong foundation for the future of AI technologies.