A recent report by the International Monetary Fund (IMF), released at its annual spring meeting in Washington, indicates that the economic benefits of artificial intelligence (AI) are expected to outweigh the costs associated with increased carbon emissions. The report projects that AI will boost global GDP by approximately 0.5% annually between 2025 and 2030. This growth is attributed to the widespread integration of AI technologies across various sectors.
While the IMF forecasts significant economic gains, the report also addresses the rising concerns about the energy consumption of AI and the subsequent increase in greenhouse gas emissions from data centers. These data centers, which house the servers necessary to power AI models, require substantial amounts of electricity. The IMF estimates that AI-driven global electricity needs could more than triple, reaching around 1,500 terawatt-hours (TWh) by 2030. This is roughly equivalent to India's current total electricity consumption and 1.5 times higher than the anticipated electricity demand from electric vehicles during the same period. The report also highlights the massive scale of data center infrastructure, noting that the server warehouses in Northern Virginia already occupy an area comparable to eight Empire State Buildings.
Despite the challenges posed by increased energy demand and emissions, the IMF maintains that the economic advantages of AI will likely surpass the environmental costs. The report, titled "Power Hungry: How AI Will Drive Energy Demand," states that the social cost of these extra emissions is minor compared to the expected economic gains. However, it also emphasizes that these emissions contribute to the worrisome buildup of greenhouse gases in the atmosphere. Under current energy policies, the IMF estimates that the widespread adoption of AI could lead to a 1.2% increase in global greenhouse gas emissions between 2025 and 2030. Greener energy policies could potentially limit this increase to 1.3 Gt.
The IMF report stresses that the distribution of AI-driven economic benefits will not be uniform across the globe. It urges policymakers and businesses to proactively address these disparities to minimize potential adverse effects on societies worldwide. Furthermore, the report suggests that the impact of AI on the economy and environment will depend heavily on its applications, particularly whether AI can lead to more efficient energy consumption and promote sustainable consumption patterns. The IMF also notes that tech companies' commitment to reducing emissions from data centers through increased use of renewable energy sources and other methods will be crucial in managing the carbon footprint of AI.
