What Happens When Every Major Tech Company’s Biggest Customer Is Also the Global Energy Market?

You’ll notice something that doesn’t quite fit the typical perception of a tech company if you stand outside a data center that is currently being built in Northern Virginia—the area that locals half-jokingly refer to as “data center alley”. Here, no new product launches are taking place. There are no software engineers arguing over interface choices. Instead, you see energy procurement experts, grid engineers, and utility contractors strolling alongside construction workers on job sites. It turns out that AI developers are beginning to resemble power plant builders.

It’s not a coincidence. For a few years now, there has been a structural change within the largest technology companies in the world. 2024 saw a 34% year-over-year increase in energy-related hiring at companies like Microsoft, Amazon, and Google; last year’s pace remained about 30% above pre-AI baseline levels. Since 2022, Microsoft has quietly hired more than 570 workers with an emphasis on energy. 605 such hires have been made by Amazon, including its AWS division. ESG reports are not being filled out by sustainability managers. They are procurement leads, grid interface experts, and energy market strategists—people who were formerly employed by utilities rather than software firms.

It’s difficult to ignore what this indicates. Big Tech now uses more than just energy. It’s absorbing it. Developing internal expertise, negotiating directly with utilities, and entering into long-term power purchase agreements on a scale that currently represents 43% of all clean energy PPAs worldwide. That figure is startling: a small number of tech companies signed nearly half of all clean power contracts worldwide in 2024. Google made headlines when it invested in two wind farms fourteen years ago. In contrast, it’s practically charming now.

AI—more especially, the data centers that power it—is the driving force behind all of this. According to the International Energy Agency, those facilities used about 1.5% of the world’s electricity in 2024, a 12% increase over the previous five years. Demand is predicted to continue rising sharply. Utility power supply to U.S. data centers alone is expected to reach 61.8 gigawatts this year, almost doubling to 134.4 GW by 2030, according to S&P Global. Rather than the server requirements of a single industry, these are utility-scale figures, the type that historically characterized small nations.

This is complicated because there isn’t a clear-cut solution to the power issue. Many of the bold promises made by tech companies regarding renewable energy are genuine. However, the deal flow makes it clear that they are also using gas. In 2024, Dominion Energy, which provides electricity to the same corridor in Northern Virginia, operated a fleet that was 44% natural gas. To partially supply Meta’s Hyperion data center in Louisiana, Entergy is constructing three new gas plants. According to Meta’s own global head of energy, the company wants “all forms of power” in the grid, with an emphasis on whatever can be constructed most quickly. This might be the only sensible way to deal with the time constraints at play. It may also significantly complicate the climate narrative.

Observing all of this gives the impression that the tech sector is undergoing an identity crisis for which it was ill-prepared. These businesses used software—weightless, scalable, and clean—to build their brands. They are now signing gas contracts and stealing General Electric employees. According to reports, Microsoft appointed GE’s former CFO as its chief operating officer in 2024. Depending on your point of view, this could be interpreted as either a wise operational decision or a fairly obvious indication of the type of business Microsoft is subtly evolving into. It’s still unclear if the general public and regulators have come to terms with that fact. However, the grid is already sensing it.