AI is transforming not only the digital economy but also the physical foundations that sustain it. What began as a competition to build faster models and process larger datasets has become a full-scale transformation of energy systems and strategic policy. AI is no longer a purely digital revolution—it is a structural force reshaping the global energy system.
The AI boom is expected to drive a surge in electricity demand unlike any the world has seen in decades. Large-scale datacentres, training clusters and AI-driven computing systems consume enormous amounts of energy, operating continuously and requiring exceptionally reliable power.
A single hyperscale datacentre could consume as much electricity as a mid-sized city. Governments and corporations are awakening to a new reality: energy capacity is now the foundation of digital competitiveness, energy and economic security. Reliable, low-cost and abundant energy will determine which nations lead the next phase of technological innovation.
AI has thus merged energy policy with national security, as the ability to power algorithms increasingly defines economic and national security, and geopolitical strength.
The shift towards low-cost energy hubs
As the demand for computing and data processing accelerates, we could expect AI and data infrastructure investments to flow towards regions with low-cost, reliable and politically stable energy. Energy affordability and low-cost energy sources have become a new form of digital leverage.
Countries with abundant fossil fuels and renewables—such as the US, Saudi Arabia, the UAE and Norway—are emerging as AI-energy hubs, offering a blend of energy abundance, infrastructure readiness and industrial capability.
In this new geography of energy and data, nations are competing not just to host factories or refineries but to anchor digital-energy ecosystems—integrated systems where power generation, cloud infrastructure and digital manufacturing reinforce one another.
The US perspective: AI, energy and strategic competitiveness
The US increasingly views artificial intelligence as both a technological frontier and a strategic battleground, particularly in its rivalry with China. Washington considers the AI race central to future economic and military competitiveness, driving major investments in chip manufacturing, cloud computing and data infrastructure.
Yet this rapid expansion has exposed a critical tension: energy infrastructure is struggling to keep pace. Datacentres are being built faster than new generation or transmission capacity, and the surge in AI-driven electricity demand—alongside electrification of transport and manufacturing—has reignited debate over energy security, reliability and affordability.
In response, US President Donald Trump declared a State of Energy Emergency in late 2025, framing energy resilience as a national security priority. He also established the National Council for Energy Dominance to coordinate federal policy on production, investment, supply-chain security—including critical minerals—and innovation to keep the US competitive in AI and energy intensive industries.
Defining energy dominance
The concept of energy dominance, introduced under Trump, underscores the need to utilise all sources of energy and minerals to achieve energy abundance and affordability. Strategically, it does not entail producing one source at the expense of another or privileging any pathway—fossil, renewable, or nuclear—through subsidies or exclusion.
Instead, energy dominance represents the strategic alignment of markets, technology and resources to ensure the US maintains sufficient, reliable and affordable energy to meet domestic demand, drive industrial growth and sustain geopolitical influence. It emphasises capacity and resilience rather than control, recognising that America’s strength lies in the diversity of its energy base—oil, gas, coal, nuclear, wind, solar, hydro and emerging fuels—and in its ability to integrate them into a coherent, market-driven system.
In the age of AI, energy dominance is the foundation of digital leadership, as data, computation and innovation all depend on one essential input: energy abundance.
From energy transition to energy addition
The global energy debate is shifting from transition to addition—from replacing energy sources to expanding supply. Rising population, industrialisation and digitalisation ensure total demand will continue to grow. AI amplifies this trend by introducing a powerful new layer of load growth.
Datacentres, chip foundries and AI clusters require stable baseload power near major industrial or urban hubs. Meeting this demand sustainably means integrating renewables, modernising grids and retaining reliable fossil and nuclear capacity.
The era of energy addition recognises that diverse energy technologies must coexist. The challenge is not choosing between old and new, but scaling all intelligently to ensure reliability, affordability and sustainability.
Strengthening tech-energy partnerships
A defining trend of this era is the convergence of the technology and energy sectors. The rise of AI has blurred traditional boundaries, with producers and innovators collaborating on large-scale AI facilities, advanced energy management and decarbonisation.
These efforts are creating digital-energy ecosystems where production, storage and digital infrastructure function as one intelligent system. Datacentres are co-located with renewables or linked to gas and nuclear plants for reliability, while AI optimises grids and efficiency. Tech firms now invest directly in power assets, making digital infrastructure both a consumer and driver of energy innovation.
The deepening collaboration between technology and energy sectors is driving a structural transformation in which AI is reconfiguring energy systems—forcing power grids built for predictable industrial loads to adapt to intermittent renewables and real-time digital demand through intelligent forecasting, control and optimisation.
Policy and security implications
AI-driven demand highlights the urgency of diversification, infrastructure resilience and global cooperation.
- Diversified portfolios: Energy abundance requires maintaining and expanding all sources—fossil, renewable and nuclear—based on reliability and comparative advantage.
- Infrastructure resilience: Nations able to deliver stable, affordable energy for AI, industry and households will wield strategic influence.
- Evolving diplomacy: Partnerships connecting energy exporters with data-intensive economies will define a new order based on energy interdependence.
Energy is no longer a commodity; it has become a strategic enabler of innovation and power.
Towards a digital-energy future
AI and energy are converging into a single strategic ecosystem. The future of one now depends on the resilience of the other. As governments and industries confront rising digital and physical demand, the challenge is to align innovation, capacity and sustainability.
Energy dominance, redefined as the intelligent use of every available source to achieve energy abundance, is central to this vision. It offers a framework that bridges old and new, reconciling growth with security, and competitiveness with resilience.
In the age of AI, energy abundance is the new frontier of global power. The nations that harness it wisely—balancing diversification, innovation and cooperation—will lead the world into a more secure and interconnected future.
Dr. Sara Vakhshouri is founder and president of SVB Energy International and SVB Energy Access. This article is taken from our Outlook 2026 report. To read Outlook 2026 in full, click here.
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