Crypto and AI: A time bomb for the climate?

The explosive development of crypto and artificial intelligence (AI) could have a dramatic impact on global energy consumption by 2026, according to a recent report from the International Energy Agency (IEA).

AI and crypto, an insatiable energy gluttony

Fueled by the public’s enthusiasm for models like ChatGPT, conversational artificial intelligence services are promised to experience exponential growth in the upcoming years. However, they rely on extremely energy-intensive complex algorithmic models.

Thus, the report by the International Energy Agency (IEA) estimates that ChatGPT alone could consume the equivalent of the annual electric production of 700,000 American households by 2026, or nearly 10 TWh. For comparison, a single Google search consumes 10 times less!

On the other hand, the crypto industry displays an equally voracious appetite. The Bitcoin mining, which relies on solving complex mathematical problems, represents by itself an electric consumption of 120 TWh in 2023, expected to swell to 160 TWh by 2026 according to the IEA.

In total, the energy expenditure for these two sectors could thus double and exceed 1000 TWh by 2026, the equivalent of the consumption of 70 million American households. These figures are dizzying.

Insufficient efforts for an energy transition

In the face of climate concerns, efforts are being made to green these sectors. In 2021, following China’s ban on crypto mining for environmental reasons, American mines adopted renewable energy sources. Today, more than 50% of Bitcoin extraction uses green electricity.

Nonetheless, despite these commendable advances, the industry still faces immense challenges for its energy transition, emphasizes the International Energy Agency (IEA). Even as some cryptocurrencies gain efficiency, the offset by increasing transactions maintains overconsumption.

Given this alarming observation, innovative solutions are emerging to encourage the use of renewable energy. The United Arab Emirates, for example, took the lead at COP28 by announcing a blockchain-powered carbon credit trading platform. By facilitating the traceability of GHG emissions, it could accelerate the decarbonization of the sector.

But beyond technological innovations, raising awareness among stakeholders remains crucial. Consumers and investors must realize that this promising sector cannot develop at the expense of the environment. The future of our planet is at stake.