AI Demand Set to Quadruple Data Center Power by 2040 | Apollo Infrastructure Outlook

What's New

According to Olivia Wassenaar, Partner and Head of Sustainability & Infrastructure at Apollo Global Management, the AI revolution is driving an unprecedented surge in power demand that traditional generation cannot match, creating what the firm's 2026 Infrastructure Outlook calls one of the most attractive opportunity sets in private markets as data centers' share of US electricity consumption is expected to double by 2030 and quadruple over the following decade.

Why It Matters

The convergence of AI buildout, grid modernization needs, and energy transition creates a generational infrastructure investment cycle where power generation, storage, and delivery will become one of the most important economic variables of the next decade—and regions like Texas and the Mid-Atlantic face structural deficits for the first time in decades.

Big Picture Drivers

• Demand surge: US electricity demand growth accelerating from 0.8% annually (2000-2024) to projected 2.2% CAGR through 2050

• Speed mismatch: AI infrastructure buildout outpacing the speed at which traditional generation can come online

• Clean energy dominance: Over 90% of new energy capacity built in 2024 was clean energy, with the trend continuing

• Hyperscaler commitments: Major cloud operators have committed to 100% renewable power for facilities

• Grid constraints: Aging infrastructure, regional bottlenecks, and capacity limitations challenge reliable electricity delivery

By The Numbers

• 4%: Current data center share of US electricity consumption

• 8%: Expected data center electricity share by 2030

• 16%: Projected data center electricity share by 2040

• 2.2%: Forecasted US electricity demand CAGR through 2050

• 90%+: Share of new 2024 energy capacity that was clean energy

Key Trends to Watch

• Digital infrastructure primacy: Data centers, semiconductors, cell towers, and fiber networks are becoming the new essential infrastructure—the roads, tolls, and bridges of the digital economy.

• Renewable-plus-storage solutions: Modular, rapidly deployable clean energy paired with battery storage offers the fastest path to meeting AI's expanding power needs.

• Grid modernization imperative: Transmission line upgrades, substation expansion, and distribution network reinforcement are becoming urgent investment priorities.

• Battery storage criticality: Storage systems are emerging as essential for balancing supply and demand, managing peak loads, and providing backup during outages.

The Wrap

Apollo frames infrastructure as uniquely positioned for 2026: tangible assets that provide portfolio resilience, inflation hedging, and low correlation to other asset classes—now supercharged by the urgency of digital, electrical, and physical rewiring happening simultaneously across the economy.