AI adoption drives energy use surge in Australia & New Zealand

A recent report released by Pure Storage and the University of Technology Sydney's (UTS) Institute for Sustainable Futures (ISF) highlights a disconnect between the rapid adoption of artificial intelligence (AI) in Australia and New Zealand and the awareness of its substantial energy demands.

The report, titled "Drivers of Change: Meeting the Energy and Data Demands of AI Adoption in Australia and New Zealand," reveals that many IT managers are not fully aware of the environmental impact brought on by the rise of AI technologies.

According to the World Economic Forum, the computational power required for AI is doubling approximately every 100 days, and its energy consumption is increasing at an annual growth rate of between 26% and 36%. If the current trajectories continue, AI could consume more energy by 2028 than the entire country of Iceland did in 2021. Currently, data centres, where most AI is run, account for about 4% of global greenhouse gas emissions. In Australia, data centres consume up to 5% of the energy grid, with projections indicating this could double by the end of the decade.

The survey highlighted several key points. AI technology has already been adopted or is being piloted by 72% of respondents, marking its integration into everyday practice. However, 68% of surveyed IT managers expressed concerns about increased energy consumption as a result of AI adoption. A notable uncertainty emerged, with 53% of respondents unsure about the extent to which energy consumption would rise upon AI deployment.

Despite the allocation of sustainability responsibilities to IT managers, engagement with energy and sustainability issues remains relatively low. Only one-third of respondents were key decision-makers, and 36% had the authority to influence sustainability initiatives. Sustainability and Environmental, Social, and Governance (ESG) concerns were ranked as one of the top three overlooked issues by 38% of respondents.

While 69% of IT managers acknowledge the critical role of IT infrastructure in meeting ESG goals, only 4% have adopted strategies to limit AI usage to offset energy consumption. Additionally, employee skills in AI technology were identified as the most overlooked issue in AI deployment by 58% of participants.

Amy Rushall, the Area Vice President for Australia and New Zealand at Pure Storage, stated, "It is good to see Australia and New Zealand embracing AI and it will no doubt benefit organisations, individuals and the economies in the region but we have to be aware of its impact on the environment. This report should serve as a wake-up call for the government, regulators, boards of directors and investors that the pace of development needs to be tempered by an equally robust scrutiny on environmental sustainability."

Gordon Noble, Research Director for Business, Economy, and Governance at ISF and the report's author, also expressed concerns. He noted, "A clear picture is emerging that while Australia and New Zealand are adopting AI and data centres at a rapid rate, little or no attention is being paid to the significant sustainability impacts they will cause. This should be concerning for not only regulators but for the multi-billion-dollar superannuation and investment sectors, who increasingly see data centres as a source of income. Left unchecked, this will contribute to worsening carbon emissions, risking a further exacerbation of our global warming challenge."

The report underscores the urgency for both policymakers and industry leaders to pay closer attention to the environmental repercussions associated with the burgeoning adoption of AI technologies. Recognising and addressing these energy demands will be crucial in aligning technological advancement with sustainable development goals.