The rapid rise of artificial intelligence (AI) and data centers is placing unprecedented pressure on America’s largest power grid, operated by PJM Interconnection, which serves 65 million people across 13 states and Washington, D.C.

As tech giants race to build infrastructure for AI chatbots and cloud computing, energy consumption is surging faster than new power plants can come online, raising concerns about grid reliability and soaring electricity costs.

According to Reuters, electricity bills in parts of PJM’s territory are projected to jump by more than 20% this summer, a direct consequence of the strain imposed by data centers. These facilities, often consuming as much power as mid-sized cities, are driving demand to levels the current infrastructure struggles to meet, exposing vulnerabilities in a system already grappling with aging equipment and regulatory hurdles.

The AI Energy Surge

The energy appetite of AI is staggering. Training large language models and running data-intensive applications require immense computational power, translating into skyrocketing electricity needs. Reuters reports that a single data center can demand hundreds of megawatts, equivalent to the consumption of tens of thousands of homes, and dozens of such centers are planned or under construction within PJM’s footprint.

This boom is outpacing the grid’s capacity to adapt. While renewable energy projects and new gas-fired plants are in development, they face delays due to permitting challenges and supply chain bottlenecks. The result is a widening gap between supply and demand, with PJM officials warning of potential shortfalls during peak usage periods like heatwaves.

Grid Reliability at Risk

Compounding the issue is the uneven distribution of power resources across PJM’s territory. Data centers tend to cluster near urban hubs with robust internet connectivity, creating localized strain on transmission lines. Reuters highlights that grid congestion in these areas could lead to blackouts or forced power rationing if demand continues to spike unchecked.

Moreover, the transition to cleaner energy sources adds complexity. As coal plants retire and renewables scale up, the grid must balance intermittent power generation with the constant, high-baseload needs of data centers. PJM is exploring emergency measures, such as demand-response programs that incentivize reduced usage during peak times, but these are stopgap solutions at best.

Economic and Policy Implications

The economic fallout is already evident. Businesses and households face higher electricity costs as utilities pass on the burden of infrastructure upgrades and emergency power purchases. Reuters notes that some states within PJM’s region are seeing pushback from ratepayers and local governments wary of footing the bill for tech-driven demand.

Policy responses are emerging, but they lag behind the crisis. Federal and state regulators are fast-tracking permits for new energy projects and exploring incentives for data centers to adopt energy-efficient technologies. Yet, without a coordinated national strategy, experts fear the grid will remain a bottleneck for AI innovation and economic growth.

Looking Ahead

The struggle of PJM Interconnection is a microcosm of a broader challenge facing the U.S. energy sector as digital transformation accelerates. Balancing the needs of AI-driven industries with grid stability will require billions in investment, innovative policy, and a rethinking of how power is generated and distributed.

For now, the tension between technological ambition and infrastructure limitations looms large. As Reuters underscores, without swift action, America’s largest power grid risks becoming a cautionary tale in the age of AI—a reminder that even the most advanced technologies depend on the humblest of foundations: reliable electricity.