Benzinga - by Benzinga Neuro, Benzinga Staff Writer.
NextEra Energy Inc (NYSE:NEE) CEO John Ketchum has made a bold prediction about the future of the U.S. electricity market, citing the rise of artificial intelligence (AI) as a major driving force.
What Happened: Ketchum, speaking at the CERAWeek energy conference in Houston, forecasted an 81% surge in electricity demand over the next five years, reported Bloomberg on Monday. This surge is expected to be driven by AI, electrification, cloud capacity, and chip factories.
Ketchum said, "What you have today is electric demand that has been relatively flat for years now, all of a sudden looking at an 81% increase" over the next five years.
This rapid increase in demand could further strain power grids, which are already under pressure due to extreme weather events and the impacts of climate change.
Ketchum also predicted a significant increase in renewable energy generation, estimating a threefold or more rise to 370 to 450 gigawatts.
To meet this growing demand, NextEra has developed a system to identify suitable locations for new data centers based on solar and wind resources and access to transmission lines.
Why It Matters: The surge in electricity demand is closely linked to the rapid advancements in AI and the chip industry. Companies like Intel Corp (NASDAQ:INTC) have been facing market challenges, leading to delays in chip manufacturing projects.
Meanwhile, Samsung Electronics Co (OTC:SSNLF) is adopting new chip-making techniques to better compete in the high-end chip market, which is crucial for powering AI.
Moreover, the surge in electricity demand could also impact the semiconductor industry. Taiwan Semiconductor (NYSE:TSM) is reportedly considering expanding its advanced chip packaging capacity in Japan, a move that could significantly impact the global semiconductor industry.
These developments underline the growing importance of AI and chip technology in driving various sectors, including energy and semiconductors, and the need for companies to adapt to these changes.
Read Next: ‘Clock Is Ticking’ For Apple As It Faces Obliteration In Auto Market, Says Gurman: Here’s How Cupertino Can Turn CarPlay Into A Moneymaker
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