The clearest illustration of the strange shape of the AI energy crisis is a number that nobody in the policy debate seems to want to talk about. According to a Seattle Times op-ed by data-centre veteran Joshua Smith, reprinted this week in The Astorian, the world's data centres collectively discard 42 million kilowatts of heat every day, an amount of energy roughly equivalent to running America's thirteen largest cities all day. The technology to capture that heat is decades old, the payback periods are short, and yet on most American hyperscale sites the heat just leaves the building.
It is not an engineering problem. Microsoft's Azure facilities in Finland deliver up to 350 megawatts of thermal output into Helsinki's municipal heating network, covering 40 percent of the heat used by a quarter of a million households. Norway already requires anyone building a data centre above 2 megawatts to file a government-approved cost-benefit analysis on heat reuse before they can break ground. The EU's 2023 Energy Efficiency Directive mandates reuse where feasible above 1 megawatt. No American state currently has anything comparable. Virginia has begun drafting legislation. Most have not.
This matters because of the larger numbers around it. The latest International Energy Agency investment report, summarised by resilience.org, finds that AI-driven demand drove a threefold increase in US gas-power investment in 2025. Orders for new gas turbines hit 130 gigawatts globally, a 25-year high. For the first time since the IEA began the data series, American investment in fossil-fuelled power generation is now expected to overtake China's in 2026. US captive data centres alone signed off on more new gas-turbine investment last year than any country outside the United States itself. Most of that gas, once burned, will be used to make heat that the data centre then spends more electricity trying to throw away.
There are two parallel industry responses, both partial. The first is a strikingly bold claim from utilities that the new load will actually lower power bills. As Data Center Knowledge reports, Indiana Michigan Power knocked 3.6 percent off customer bills last month and credited revenue from a Google data centre for the help. DTE in Michigan has proposed pausing rate increases for two years if planned data-centre projects come online. Georgia Power won approval for a freeze through 2028. The fine print is the issue. Indiana's settlement only works because of 20-year service terms, a 90 percent minimum-billing obligation and stranded-cost protections that took a year of regulatory haggling to draft. Most states have nothing of the kind. As economist Ahmad Faruqui put it to Data Center Knowledge, the math only holds if the new demand does not trigger any new generation or transmission spending, "and that has yet to be shown to be true for gigantic data centres."
The second response is voluntary. Microsoft, Amazon, Google and Meta announced last week that they will jointly back energy-tech startups through the non-profit Elemental Impact, at 500,000 to 5 million dollars per project. Wood Mackenzie's read, fairly, is that those numbers are negligible against the eight largest U.S. tech firms' projected 850 billion dollars of capital expenditure this year. The signal is more interesting than the money. Wood Mackenzie also notes that 14 US states now have legislatures debating outright bans on new data centres, with support from across the political spectrum, an indirect way of forcing a question that policy has avoided.
The unaddressed gap is the one Smith keeps returning to. Heat reuse is mature. On-site electricity generation from waste heat using Organic Rankine Cycle systems is mature. None of it happens at American scale because the regulatory signal points the other way: subsidised water makes evaporative cooling the rational choice, and atmospheric venting carries no cost. Helsinki settled the question years ago by writing it down in policy. Until somewhere in the United States does the same, the cleanest, cheapest, most boringly available source of additional energy in the AI boom will keep going straight up into the sky.