America’s Largest Power Grid Struggles to Meet Surging AI and Data Center Demand

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America’s largest power grid, managed by PJM Interconnection and covering 13 states from Illinois to Tennessee, is facing significant strain as data centers and AI chatbots rapidly increase electricity consumption—outpacing the grid’s ability to build new power plants. This has led to sharp electricity price increases, with bills projected to rise over 20% this summer in some areas.

The rising costs stem from an 800% jump in prices at PJM’s annual capacity auction last year, which sets rates to ensure electricity availability during extreme weather. These price hikes trickle down to consumers and have sparked political and organizational upheaval: Pennsylvania’s governor has threatened to pull the state from PJM, the grid’s CEO announced he will step down, and key board members have been replaced.

The auction is scheduled again soon, with expectations of further price rises, driven by a growing mismatch between supply and demand. Aging power plants are retiring faster than new ones come online, and PJM has delayed auctions and paused accepting applications for new power plants—actions that experts say exacerbate the shortage.

Pennsylvania Governor Josh Shapiro emphasized the need for transparency, speed, and cost control from PJM. The grid operator attributes the supply crunch partly to external factors, such as state policies that closed fossil fuel plants prematurely and soaring demand from data centers, especially in “Data Center Alley” in Northern Virginia.

Although PJM has cleared about 46 gigawatts of new power projects in recent years—enough for 40 million homes—many face delays due to local opposition, supply chain issues, and financing problems. PJM lost more than 5.6 gigawatts of power capacity in the last decade and added only about 5 gigawatts in 2024, less than smaller grids in California and Texas.

Demand from data centers alone is expected to increase by 32 gigawatts by 2030, with AI-related workloads significantly contributing to the surge.

The power crunch intensified after PJM paused processing new power plant applications in 2022, overwhelmed by renewable project requests, and after AI chatbots like ChatGPT gained popularity in 2023, boosting data center energy use. Consumer groups have called for a redo of the 2024 capacity auction, citing unfairly high prices.

In response, PJM implemented reforms including price caps and biannual auctions, and expedited the connection of 51 power projects, but many will not be operational until 2030 or later. For example, the Three Mile Island nuclear plant restart, contracted by Microsoft, won’t come online before 2027.

Experts warn that PJM must improve its processing of new power plant applications to effectively address the supply-demand imbalance and prevent blackouts.

Arm Reports 14-Fold Growth in Data Center Customers Since 2021 Amid AI Boom

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Arm, the chip architecture company owned by SoftBank, has seen its data center customer base soar to 70,000—a 14-fold increase since 2021—according to a company statement shared exclusively with Reuters. This growth underscores Arm’s rising influence in the data center chip market, driven largely by demand linked to generative artificial intelligence computing.

Under CEO Rene Haas, Arm has expanded beyond its traditional strength in mobile and PC markets into data center processors, a sector historically dominated by x86 architectures from AMD and Intel. Arm-based chips are prized for their high performance coupled with low energy consumption, making them attractive for large-scale data centers that require efficient, powerful processing.

The company also revealed a 12-fold increase in startups using its chips since 2021, highlighting its growing footprint in emerging technology firms. Arm has benefited from partnerships with major cloud providers like Amazon AWS, Google, and Microsoft, who have developed custom Arm chips for their expansive infrastructure. For instance, Amazon has introduced multiple generations of Arm-based data center processors since 2018, including those optimized for AI workloads.

While the broader semiconductor market has faced challenges, particularly in PC and mobile segments, Arm’s data center growth remains robust, supported by a swelling developer ecosystem. The number of applications running on Arm machines has doubled to 9 million since 2021, and the developer community has grown by 50% to 22 million.

Despite the positive outlook, Arm has refrained from issuing annual financial guidance, citing ongoing trade uncertainties.

Turkey Blocks AI Chatbot Grok Content for Alleged Insults to Erdogan and Religious Values

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A Turkish court on Wednesday blocked access to certain content generated by Grok, the AI chatbot developed by Elon Musk’s company xAI, following complaints that the chatbot produced responses insulting President Recep Tayyip Erdogan, Turkey’s founding leader Mustafa Kemal Ataturk, and religious values. This marks the first time Turkey has imposed a ban on content from an AI tool.

The Ankara chief prosecutor’s office launched an investigation, citing violations of Turkish laws that criminalize insults against the president and other protected entities with penalties up to four years in prison. The Turkish Information and Communication Technologies Authority (BTK) implemented the court’s order following the investigation.

Media reports indicated Grok generated offensive content when queried in Turkish. The content included politically sensitive and culturally offensive statements. Turkey’s Transport and Infrastructure Minister Abdulkadir Uraloglu noted that while a total ban on Grok is not yet in place, it could be enforced if deemed necessary, with ongoing talks planned between Turkish authorities and X (formerly Twitter), the platform hosting Grok.

Cyber law expert Yaman Akdeniz stated that authorities identified about 50 problematic Grok-generated posts as the basis for the ban, aiming to “protect public order.” He noted that Turkey is the first country to censor Grok.

The case highlights growing concerns over AI chatbots’ political bias, hate speech, and misinformation, issues that have been under scrutiny since the launch of ChatGPT in 2022. Grok has also faced backlash over antisemitic content and praise for Adolf Hitler, leading to content removals by its developers.

Turkey has increasingly tightened regulations on social media and online platforms in recent years, enacting laws that give authorities expanded powers to control online content. While the government argues these measures protect public order and respect for state institutions, critics accuse them of suppressing dissent.

Neither Elon Musk nor X’s representatives have publicly responded to the Turkish court decision.