Asia’s Race to Power AI

**Mayank Maheshwari** (0:01)
Welcome to Thoughts on the Market. I am Mayank Maheshwari, Morgan Stanley, Asia Energy Analyst. Today, how AI's rapid growth is forcing Asia into a massive energy buildout across power grids, fuels, storage, and dependable energy and power generation. It's Tuesday, June 9th at 8 a.m. in Singapore.
Every time you ask AI to draft a note, summarize a file, plan a trip, or generate an image, the response feels instant and easy. But behind it sits a very physical system, data centers, electricity, cooling, fuel, metals, power lines, storage tanks, and ships. There is no AI without energy. And in Asia, the power and energy needs could get much bigger. And right now, we are at a critical inflection point where energy, AI, and security converge into once-in-a-generation investment cycle. We see a super cycle with $5 trillion plus in new investments in energy over the next five years, almost double of what we have seen in the past decade. And this has global implications as Asia consumes almost half of the world's energy needs. But it produces only a third at home. Energy markets may be global, but energy insecurity is local. It shows up in electricity prices, fuel shortages, factory delays, food supply pressure and household budgets. By 2030, Asia's energy use could rise by about 38 exajoules. That increase is roughly equal to all the energy the Middle East consumes today. Power demand alone could reach about 19 trillion units a year when expressed in kilowatt hours. This is around 4 trillion more units of electricity usage than in 2025, driven by data centers, industries and on-shoring of businesses.
AI is now part of that demand story. By 2030, data centers could use roughly one-sixth of all new power units in Asia. That makes AI a major new load on the power system.
Meeting this demand requires a major investment cycle. Asia's annual energy investment could rise to roughly 1.1 trillion dollars a year over the next five years. Much of that spending goes into the power system itself, generation, grids, storage, and the equipment needed to connect everything. Grids may be a biggest bottleneck. Think of grid as the highway system for electricity. You can build more power plants, but if the roads clog up, the power does not reach homes, factories, or data centers. Asia's grid investment needs could reach close to about a trillion dollars by 2030 Transformer lead times have stretched to years in some cases, which shows how tight the equipment supply chains have become.
The hardest part is keeping the lights on every hour of the day. Base load power means electricity that can run around the clock. Asia is adding a large amount of renewable power to its energy infrastructure, but that source depends on when the sun shines or the wind blows. That is why coal, gas and nuclear remain part of the conversation.
Storage also moves from useful to essential. Batteries help smooth out renewable power demand when supply rises and falls during the day. Global energy storage installations could rise from about 500 gigawatt hours in 2025 to around 3000 gigawatt hours in 2030 Powering AI also reaches beyond electricity. Data centers need power, but the system around them needs dependable fuels, grids, batteries, metals, refining, storage and shipping. Electricity has to be generated, moved, backed up and supplied through physical infrastructure. That is why this story pulls in copper and aluminum for grids, fuel refining for transport and petrochemical supply chains, and fertilizer because energy security also connects to food security.
The future may look digital, but it will be powered by something far more physical. The largest energy build out Asia has seen in decades.
Thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or a colleague today.

**SPEAKER_2** (4:39)
The preceding content is informational only and based on information available when created. It is not an offer or solicitation, nor is it tax or legal advice. It does not consider your financial circumstances and objectives and may not be suitable for you.