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First in Fox Business – A new White House survey warns that if the US does not increase energy production, demand for artificial intelligence could cause electricity prices to skyrocket.
The White House Economic Advisors Council is set to release a report on Thursday that it discovered that the energy needs of AI data centers have been found to produce several construction products with the total energy consumed by many sectors.
“The International Energy Agency (IEA) estimates that by 2030, US data centers will consume more electricity than production of aluminum, steel, cement, chemicals and all other energy-intensive products, according to a copy of the report originally obtained by Fox Business.
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The White House Economic Advisors Council has published a new study that shows that US energy is pushing its way too hard to do to meet AI demand. (Kevin Carter/Getty Images/Getty Images)
The report also warns that the US is losing its energy race with China.
“Today, China has generated about twice the power that it has invested in nuclear power and is actively investing in nuclear power. Based on these investments, China is projected to become the world's largest nuclear producer by 2030,” the report states.
“If half of US companies are engaged in widespread use of AI by 2034, annual labor productivity growth could be 1.5% higher in 2034 than in 2034 when AI adoption was not widespread. This could result in an increase in labour productivity in 2034, which could increase GDP growth by 0.4%,” the report adds. “To effectively compete for AI domination, the US must focus on the rapid growth of the low-cost domestic baseload generation. While US power generation growth has averaged to zero over the last 20 years, the Chinese generation has expanded by more than 5-10% per year.”
According to the White House Economic Advisors Council, “The growing demand for AI and cloud computing capabilities is already expanding electricity usage in the United States. After 20 years of growth per year, electricity demand rose by 2% in 2024.”
The owner of the 3-mile Island nuclear power plant in Middletown, Pennsylvania, invests $1.6 billion to revive it and agrees to sell all production to Microsoft Corp. as Tech Titan seeks carbon-free power from its data centers to power the AI boom. (Heather Khalifa / Getty Images / Bloomberg via Getty Images)
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The council estimates that the US will need to invest around $1.4 trillion between 2025 and 2030.
“As manufacturing industry's industrial electrification and reuse demand rises, an estimated $1.4 trillion investment between 2025 and 2030 will require an estimated $1.4 trillion investment between 2025 and 2030 to increase total electricity demand,” the report states. “Continuous electrification of the economy and reuse of energy-intensive manufacturing will contribute to additional demand for electricity.”
Without new investments in energy, the council found there would be a price increase between 9% and 58%.
“Using elasticity estimates from the economic literature, electricity prices in 2030 could be 9-58% higher due to higher demand for electricity if low-cost providers weren't online,” the report states.
The report found that fragmented power grids put pressure on increasing electricity prices.
“One important barrier to lowering consumer electricity prices is the fact that the US power grid is highly fragmented,” the report states. “Studies show that linking local grids reduces regional price differences by allowing electricity to flow where needed, reducing production costs and increasing elasticity.”
The Mount Storm Call Fried power plant owned by Dominion Energy will be found on June 30, 2025 in Mount Storm, West Virginia. (Ulysse Bellier/AFP via Getty Images)
The White House Economic Advisors Council recommended increased access to energy resources on federal lands and water bodies.
“Uranium mining in the country brings strategic importance as it currently imports almost all of the uranium used by the US in nuclear power generation,” the report said. “In 2023, about half of the uranium purchased by US nuclear power plants came from Canada and Australia, with another 44% coming from Russia, Kazakhstan and Uzbekistan.”
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Reports show that in recent years, about 42% of U.S. coal production, 26% of crude oil production and 10% of natural gas production have come from federal lands and waters. Federal and tribal lands also contain approximately 75% of the US known and potential uranium reserves, and the council assessed it as presenting strong geological potential for uranium mining.
