While AI technology is becoming much more efficient per task, these gains are unlikely to keep up with the explosion in demand for new, energy-heavy tools like video generation. According to the authors of the newly released report, total electricity consumption is expected to keep climbing because the sheer volume of users and more complex AI capabilities are growing faster than technical improvements can save power.
“While efficiency gains cannot offset rapid expansion in data centre activity, they can slow demand growth and delay the need for new generation and network investment.” Additionally, the report notes that “even with continued rapid improvement in energy efficiency, total electricity consumption from AI is set to increase in the near term.”
Essentially, scientists and engineers are making AI software and hardware much faster and more energy-efficient, but this progress is a double-edged sword. As the technology gets cheaper and more capable, more people use it for much more complicated tasks, like generating videos or using autonomous “agents” that perform multi-step work. This phenomenon means that any electricity saved through clever engineering is immediately swallowed up by the massive increase in how much we use these powerful new digital tools.
The report “Key Questions on Energy and AI” was published in April 2026 by the International Energy Agency in Paris, France. Part of the World Energy Outlook Special Report series, the analysis was prepared by a team led by Thomas Spencer and Siddharth Singh under the direction of Laura Cozzi. The publication provides a comprehensive assessment of the rapidly evolving intersection between artificial intelligence, data center power demands, and global energy markets.
