AI Is Making Your Life More Expensive
ChatGPT is running up your bills...
The powerful AI chatbot started to become widely adopted in 2023. Ever since then, power-grid operators have been scrambling to build more infrastructure to keep up with the technology.
The problem is that AI data centers can consume roughly 30 times more power than traditional data centers. And many AI data centers are connected to the same power grids that our homes and businesses rely on.
With more demand for electricity, prices are set to rise.
From a recent Fox News article...
Even if you never use AI tools yourself, you are still likely paying for their growth. The cost of expanding [a] data center's power supply is spread across all grid users, including regular households.
PJM [the largest power-grid operator in the U.S.] customers have been warned to expect electric bills to increase by $25 or more per month. Commercial users may see prices climb nearly 30%.
To help prevent rolling blackouts, PJM is rolling out demand response programs that pay large businesses to temporarily reduce their electricity use during periods of extreme demand. Still, if electricity usage exceeds 166,000 megawatts, some regions may not have enough reserve power to maintain reliability.
A recent report from the National Electrical Manufacturers Association projects that U.S. electricity demand will increase about 2% annually. That comes to 50% more electricity usage by 2050.
This is driven by a projected 300% growth in data-center energy consumption over the next 10 years and a 9,000% growth from electric vehicles through 2050.
As an example, one large data center uses as much electricity as 50,000 homes.
Existing infrastructure will also fail to keep up with soaring demand...
A good portion of America's electric grid was built in the 1960s and 1970s. Roughly 70% of our electrical power lines are more than 25 years old and nearing the end of their life cycles.
All of this has led to a significant increase in power outages over the past 10 years... And there are likely many more to come.
It's clear that the U.S. needs to invest more in its electrical infrastructure. We need upgrades and modernization.
However, we also just need more power.
Handling an influx of energy demand will require the U.S. to kickstart a lot of projects for nuclear and geothermal power, keep old coal plants running, try to work through the kinks of "clean energy," and burn more natural gas.
According to my colleagues Joel Litman and Rob Spivey at our corporate affiliate Altimetry, natural gas is the most viable option for our immediate energy needs...
It's the only energy source that's clean enough to use for now... that can handle 24/7 industry demand... and that can be built fast enough to fulfill our needs. Behind the scenes, it has quietly cemented itself as the backbone of the AI industry.
According to a CNBC article, Goldman Sachs believes that "natural gas is expected to supply 60% of the power demand growth from AI and data centers, while renewables will provide the remaining 40%."
You can make a lot of money in the coming years if you're invested in the right natural gas and energy companies. To learn the best way to position yourself, I'd recommend watching this presentation from Joel and Rob.
In it, they discuss the coming multiyear energy boom and how Wall Street blind spots are giving you a once-in-a-decade opportunity to buy fantastic energy companies with solid returns.
This video will be taken down tonight, so click here to learn more.
What We're Reading...
- For Retirement Millionaire subscribers, our favorite way to profit from aging electrical infrastructure (Reshoring Stock No. 2).
- Something different: Happy Gilmore 2 review: the good, weird, pros who stole the show, and more.
Here's to our health, wealth, and a great retirement,
Jeff Havenstein
July 30, 2025