AI is no longer a distant frontier — it is already reshaping our world. Once seen as a niche technology, AI is now a general purpose force, driving profound transformations across industries, services and everyday life. Globally, the computational power required to train AI models has increased by a staggering factor of 1-trillion. This growth is not just technical; it is infrastructural, economic and geopolitical.
In countries such as Brazil, India, Indonesia and the US, more than 40% of online users now use generative AI tools such as ChatGPT. China, a rising AI power, recently launched DeepSeek, a home-grown generative model that matches the capabilities of global leaders. These developments point to a surge in global AI adoption, and with it an urgent and growing demand for electricity.
AI models run on enormous data sets processed in energy-hungry data centres. As such, the rise of AI is pushing the limits of energy infrastructure worldwide. And SA, already facing energy supply shortfalls and uncompetitive pricing, must act decisively if it is to remain competitive in this fast-emerging landscape.
Electricity, the new foundation of AI
AI’s power consumption is no accident. Like electricity in the 20th century, AI is a general-purpose technology, one that underpins advances across all sectors, from healthcare and education to mining and finance. But unlike previous industrial revolutions AI doesn’t just depend on electricity in the background; it actively consumes it in vast quantities.
Globally, data centres consumed about 1.5% of total electricity produced in 2024, equivalent to France’s entire annual energy use. Projections show this figure doubling by 2030, reaching levels on par with Japan’s electricity consumption, about 3% of global demand. SA is a small player in this space, with only 49 data centres out of 11,000 worldwide. Yet each centre uses the same amount of electricity as about 100 households. And hyperscale, AI-optimised centres can consume as much power as 3-million homes.
SA’s urban centres are already feeling the strain. About 35% of the nation’s electricity is consumed in metropolitan areas, especially Johannesburg. With energy demand rising and data centres clustering in cities, pressure on the local grid is mounting. This concentration poses real risks to energy resilience.
SA’s energy challenge
SA electricity prices have risen sharply, by an average of 13% annually since 2012. The result is a hostile environment for energy-intensive industries. Ferrochrome smelters have shut down or relocated and manufacturers are struggling to stay afloat. Now AI is adding new layers of complexity and urgency.
PwC’s 2024 Global CEO Survey found that 92% of companies expect to implement AI across their operations by 2025. Eight in 10 CEOs say they will need to fundamentally change their business models to remain competitive. This wave of transformation will only accelerate electricity demand. Without a serious re-evaluation of energy policy SA risks being sidelined in the global AI economy.
At present, the country is struggling with occasional rolling blackouts, inadequate grid infrastructure and a heavy reliance on imported technology. Policymakers must recognise that AI competitiveness hinges not only on access to data or digital skills, but also on reliable, affordable energy. We cannot build a digital future on a collapsing grid.
Turning a crisis into opportunity
While the energy crisis is real, so too is the opportunity. AI infrastructure depends not just on electricity but on a range of inputs, including hardware such as electrical transformers. For example, connecting a data centre to the grid requires advanced transformers, and these are in high demand globally.
In 2024 SA imported R14.4bn worth of electrical transformers, making them the 13th most-imported product out of more than 1,200. The bulk of these came from China, followed by Brazil, France, Germany and the US. Meanwhile, exports of SA-made transformers totalled just R2.46bn. This imbalance reveals both a vulnerability and an opening: there is room to boost local manufacturing and become part of the global AI value chain.
Other opportunities lie in the critical minerals AI infrastructure demands. Data centres rely heavily on copper wiring to conduct electricity. Gallium, a rare earth mineral essential for energy efficiency, is also crucial. Global demand for gallium is expected to grow by 10% in the coming years, driven largely by AI-related infrastructure.
By investing in the production and refinement of these materials SA could create new jobs, support local industries and reduce its dependence on imports. More importantly, it could align its industrial policy with the demands of a digital economy.
A national strategy for the AI age
The International Energy Agency (IEA) has noted that Africa faces a paradox: growing aspirations to become digital leaders, but persistent struggles with basic energy access. In SA’s case this disconnect is not just a matter of development, it’s about competitiveness.
In the US energy consumption from data centres is forecast to surpass the combined electricity use of the iron, steel, cement, aluminium and chemical industries. That is a staggering transformation. And it’s a warning.
If SA hopes to be competitive in the AI age, both as a developer and as a user, it must start planning now. This means treating electricity not merely as a commodity, but as a foundational input for future economic growth. It means investing in smart grids, supporting transformer production, upgrading power stations and integrating AI’s power demands into national infrastructure plans.
Ultimately, SA must develop a coherent strategy that bridges the energy and digital divides. The AI revolution is coming and it will not wait for countries that fail to plan.
• Mabasa is executive manager in the office of the deputy mineral & petroleum resources minister and co-chair of the Brics Youth Council.
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