KKR’s Raj Agrawal warns AI growth may drive power demands far higher than expected

Here’s a number that should keep energy planners up at night: global electricity demand is projected to jump at least 40% over the next decade, and AI is one of the primary reasons why.

That’s the assessment from KKR, one of the world’s largest alternative asset managers, where Global Head of Real Assets Raj Agrawal has been sounding the alarm on what might be the most underappreciated bottleneck in the AI revolution. Not chips. Not talent. Electricity.

The gap between AI ambition and available power

KKR’s 2025 Infrastructure Outlook laid out the problem in stark terms: AI is driving a critical need for investment in both electricity generation and transmission. The firm’s follow-up 2026 Infrastructure Outlook went further, putting that 40% demand increase figure on the table as a baseline projection tied to AI, digitization, and related technologies.

The surge in data center construction is already outpacing the current power supply.

KKR is putting its money where its thesis is

The firm completed a $10.9 billion acquisition of STT GDC, a data center platform, specifically to address the infrastructure demands created by AI and to support hyperscale technology companies.

By June 2026, KKR executives had identified AI as a key driver reshaping North America’s power markets entirely. Natural gas infrastructure has seen renewed interest as a result, marking a shift in investment strategy toward energy sources that can deliver consistent baseload power.

Why this matters beyond the energy sector

A 40% increase in global electricity demand over a single decade would be extraordinary by historical standards. To put that in perspective, global electricity consumption grew by roughly 25% across the entire 2010s, a decade that included the smartphone explosion, the rise of cloud computing, and the early days of streaming video.

For the crypto industry, this dynamic cuts both ways. Bitcoin mining operations already compete with data centers for cheap electricity in favorable jurisdictions. As AI-driven demand pushes power prices higher and makes grid capacity scarcer, miners could face increasing pressure on their cost structures.

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