AI vs. BTC: Which is draining the power grid faster?

Source: Blockchain Knights

The energy race between artificial intelligence (AI) and BTC mining is heating up. As tech companies improve AI, they are also competing with BTC miners for energy. This competition is reshaping U.S. energy consumption as both industries drive unprecedented electricity demand.

AI data centers are leading the race in energy consumption. It is predicted that by 2027, these power-hungry projects will consume 85 to 134 terawatt hours of electricity per year.

This is roughly equivalent to the energy consumption of Norway or Sweden in a year, illustrating the huge amount of electricity required to execute complex AI models such as ChatGPT.

Each of these models runs on large server farms, and if ChatGPT were to run for every Google search, it is estimated that the number of servers required would exceed 500,000, with an estimated annual energy consumption of about 29.2 terawatt hours.

It is estimated that BTC mining consumes 120 terawatt hours of energy per year. Last year, BTC mining consumed 0.4% of the world's electricity, which is a huge number.

Analysts predict that by 2027, AI energy demand will surpass BTC mining, with 20% of electricity capacity shifting to AI.

As AI and BTC mining grow, they are increasingly competing for some of the same energy resources.

Large tech companies such as Amazon and Microsoft are aggressively vying for energy assets that, until recently, have been controlled by miners in the crypto asset space.

The competition is heating up, and for some mining operators it’s possible to earn cash by leasing and selling power infrastructure, while for others the risk of losing power supply has become a reality.

This has made the scramble for energy so frenetic that data centers are expected to devour 9% of all U.S. electricity by the end of the decade, more than double what they consume today.

It is worth noting that Crypto asset mining is more dependent on renewable energy. Because about 70% of its energy consumption comes from green energy, while AI data centers rely mainly on fossil fuels.

Therefore, there is a difference in the perspectives of the two technologies on sustainability. As the demand for AI continues to rise, technology companies will weigh their carbon footprint against other alternative energy sources, including nuclear power.

The future of energy consumption in the tech industry is extremely difficult to predict. As AI continues to push the envelope, its demand for energy will grow accordingly. Unless energy efficiency starts to dramatically outpace growth, the environmental consequences will be dire.

According to the International Energy Agency, by 2026, the combined energy consumption of AI and BTC mining will surge to 1,050 terawatt hours, equivalent to the electricity use of a country.

But as with most high-stakes energy races, one question always remains: Can AI and BTC mining co-exist without hogging all of the planet’s resources?

How this can be done depends on these industries’ ability to innovate and adapt to the wave of sustainable energy solutions. In their race for energy, the future of technology and the environment is at stake.