They used a combination of artificial intelligence (A.I.) and smart monitors to save companies money on their electric bills. A lot of money.

When we saw them, they had two major clients – Starbucks and Bank of America. The company used smart thermostats to control the temperature of the offices. The savings were shocking.

Sadly, the company died of managerial stupidity. But the idea was sound. Letting an A.I. manage utilities to save money is a great idea. And other companies caught on.

Alaska Airlines used A.I. to optimize about 25% of its flights in 2023. By shaving off a few minutes here and there, it cut over 680 hours of flight time. That saved more than half a million gallons of fuel. At an average price of $6.50 per gallon, that’s a few million dollars’ worth of savings…on just 25% of its flights.

This is a trend poised to explode. The adoption of A.I. into the workplace will grow exponentially over the next couple of years. Especially as companies see how much money they can save. However, it comes with a cost.

A.I. and Energy – A Mixed Blessing

The landscape of energy is going through a huge transformation. Historically, electricity came from a huge central power plant. Today, with the proliferation of wind farms and solar farms, there are many more power plants. That complicates the balance of energy because the supply must be balanced with demand.

And here’s the kicker, as we discussed last week. According to analysts at Morningstar, Global power consumption from data centers was roughly 460 Terawatt hours (TWh) in 2022 and could double by 2026 to more than 1,000 TWh. That’s equal to the power demands of Japan.

That’s an astonishing growth rate of 16.8% per year.

And a lot of that will happen here in the U.S. According to S&P Global Market Intelligence, Northern Virginia was number one for the 2023 total power capacity of the top ten largest data center markets globally. Beijing was the second largest market with a little below 2,000 MW of capacity. That means U.S. electrical utilities will see a massive growth in power demand.

As we discussed here previously, that will translate into copper demand as well. Trafigura believes A.I. will add an additional one million metric tons of demand by 2030. This is in addition to all the other demand drivers. And it comes at a time when supply cannot keep up.