AI, Power Consumption, Tariffs: 3 Market Themes for 2025

As we approach 2025, several market themes are emerging that will shape the investment landscape. Among them, AI, power consumption, and tariffs stand out as prominent factors that will influence tech companies and their valuations. In this article, we will delve into these themes and explore their potential impacts on the market.



1. AI: The rise of artificial intelligence is undeniable, with AI-driven workloads expected to account for 19% of data center power consumption by 2028 (Goldman Sachs Research). This surge in demand, coupled with the slowdown in efficiency gains, will lead to a 160% increase in data center power demand by 2030. To address this challenge, the US Department of Energy (DOE) recommends the creation of a data center AI testbed, collaboration between stakeholders, and the development of clean energy technologies. As AI becomes more prevalent, data centers are facing escalating power demands, which will significantly impact data center infrastructure in 2025.
2. Power Consumption: The escalating energy needs of AI and digital infrastructure are putting a strain on local grids. Hyperscale facilities now request 300-1,000 MW of power, with lead times of just one to three years. This rapid expansion is outpacing the ability of local grids to keep pace, raising concerns about grid reliability and environmental sustainability. The DOE report highlights the need for data centers to transition from passive power consumers to active participants in grid management, reducing their carbon footprint and ensuring sustainable growth.
3. Tariffs: As AI and data center infrastructure grow, so does the potential for tariffs to impact the cost of AI adoption for businesses and consumers. A 25% tariff on AI hardware could increase the cost of data centers by $10 billion annually by 2030, slowing down AI adoption and making it less affordable for small and medium-sized businesses. Additionally, consumers may face higher prices for AI-powered products and services. Countries like China and the U.S. have already imposed restrictions on AI imports, which may slow global AI competition and innovation but could also stimulate domestic AI development and investment in alternative technologies.



In conclusion, AI, power consumption, and tariffs are three market themes that will shape the investment landscape in 2025. As AI continues to grow, data centers will face escalating power demands, and tariffs may impact the cost of AI adoption. To navigate these challenges, investors should focus on companies that are actively addressing these issues and developing innovative solutions. By staying informed about these market trends and making strategic investments, investors can position themselves to capitalize on the opportunities that lie ahead.