In the second half of 2022, with the initial launch of ChatGPT, a global frenzy for "generative AI" spread, and the number of data centers for AI is expected to double within three years.

This report analyzes the impact of the increased power demand driven by AI on the energy and materials markets and explores key implications. The following points outline the changes triggered by AI:

• Big tech companies that lead the construction of AI data centers are competing to secure green power to meet net-zero targets;

• There is a surge in the installation of key power grids to supply large volumes of green energy to AI data centers;

• As renewable energy capacity and power grids expand, the demand for critical minerals will also rise.

1. Energy Market: Trends and Outlook for Renewable Energy

• As investments in renewable energy by major countries continues, the total power generation is projected to grow by 10.7% annually until 2026, while AI-related power generation is expected to grow at 26.0% annually.

• The share of AI in the total growth of renewable energy is expected to rise by 21.8% by 2026.

2. Energy Market: Trends and Outlook for Power Grids

• The total demand for power grids is expected to increase by 2.6% annually, reaching 86 million km by 2026 due to urbanization and electrification, with AI-related demand growing from 2.4 million km in 2023 to 3.6 million km by 2026, at an annual growth rate of 14.5%.

• Total investments in power grids are expected to grow from $344 billion in 2023 to $420 billion by 2026, an annual increase of 6.9%, with AI-related investments accounting for 25.6% of this growth.

3. Materials Market: Trends and Outlook for Critical Minerals

• Global paradigm shifts toward green energy and electrification are accelerating the transformation of industries, such as renewable energy and electric vehicles, which are heavily dependent on critical minerals.

• Demand for critical minerals is expected to surge during the transition to net-zero, with growth driven by the spread of AI and electric vehicles projected to increase by 2.8 to 4.9 times by 2030.

Key Implications from the Trends in the Energy and Materials Markets Driven by Increased Demand for AI Power

• The increase in power demand driven by AI is having a multifaceted impact on the energy and materials markets. The demand for green energy, such as renewable energy, is rising, and there is an increasing need to expand power grid infrastructure, which is critical for electricity supply. This expansion will also increase the role of critical minerals, which are essential for implementing these technologies and facilities.

• In the short term, there is a need to establish a stable supply chain for the growing demand for renewable energy, power grids, and critical minerals as essential materials. In the long term, it is important to focus on developing green energy technologies and standardizing related products to take a leading role in the market.