Asia needs deeper energy markets if it’s going to achieve its AI ambitions

Asia’s energy security depends on the Strait of Hormuz, a waterway it doesn’t control, and the fallout from the return of conflict would extend well past fuel pumps.

If Asia doesn’t build deeper, more liquid electricity networks now, it risks losing its slice of the AI value chain. Nearly every major Asian economy now has a formal national AI masterplan. Japan recently announced a 370 trillion yen ($2.3 trillion) budget, with more than a quarter of that sum earmarked for spending on artificial intelligence and chips alone over the next 15 years.

Training a frontier AI model concentrates enormous computing power into a handful of locations, while inferencing pushes low-latency facilities into dense urban hubs. Data center power demand across Asia-Pacific is expected to increase by an estimated 165% in 2023-30.

Much of the region’s headline megawatt figures, though, are “bragawatts”—announcements that look impressive on paper but are far slower to turn into real energy.

Why? Despite the ...