The global data center boom driven by generative AI is expected to be powered in part by renewable energy, though the exact share remains uncertain. According to a new International Energy Agency report, the world will spend $580 billion on data centers this year—$40 billion more than the amount allocated to discovering new oil supplies. This shift underscores a major transformation in energy demand and investment priorities. While data centers are energy-intensive and could strain already overburdened electrical grids, especially in high-demand areas like the U.S., Europe, and China, there’s growing momentum toward renewable energy solutions. Many data center developers are turning to solar power not just for environmental reasons but because it’s often faster and easier to secure permits for solar installations than for other infrastructure projects. Kirsten Korosec highlighted that renewables are becoming a practical choice for developers due to regulatory advantages and cost efficiency. She pointed to Redwood Materials’ new venture, Redwood Energy, which repurposes used electric vehicle batteries to build microgrids tailored for AI data centers. This approach could help stabilize energy supply and reduce reliance on traditional grid infrastructure—particularly valuable during peak demand periods like summer heatwaves in places such as Texas. Other startups may follow suit, creating opportunities for innovation in energy storage, grid resilience, and localized renewable systems. However, it remains to be seen how widespread such solutions will become. The scale of planned investments is staggering. OpenAI has committed $1.4 trillion over the next decade for data center development, Meta has pledged $600 billion, and Anthropic has announced a $50 billion plan. These figures raise questions about whether all these projects will be fully realized, given the immense capital requirements and logistical challenges. There’s also growing scrutiny over how these projects will be funded. OpenAI’s CFO sparked controversy by suggesting the government should backstop loans for data center construction—later clarifying the comment was poorly worded. Still, the company has pushed for expanded tax credits under the CHIPS Act, signaling that government support may be essential. Beyond funding, the physical footprint of data centers is also transforming landscapes. Even if not located directly in cities, their construction will reshape regional environments. And with many facilities planned near urban centers—around populations of one million—the challenge of connecting to existing power grids is intensifying. Ultimately, while renewable energy is emerging as a key component of the data center strategy, the extent to which it will power the boom depends on innovation, policy, and investment. The coming years will reveal whether the AI-driven infrastructure wave can be built sustainably—or if it will further strain global energy systems.