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10 Themes - #4: Digitalization meets sustainability
13/10/2025
Our digital future is going to need a lot more energy than people think
Technological progress is advancing rapidly, particularly in the fields of artificial intelligence (AI) and cryptocurrencies. Generative models, real-time analytics and blockchain applications are transforming the economy and society. But this digital transformation has an often-overlooked side effect: the significant increase in global electricity demand. The infrastructure supporting AI and cryptocurrencies, such as data centers, storage solutions and specialized chips, is becoming one of the world's largest energy consumers.
Data centers and crypto mining farms operate 24/7 to perform complex calculations and process transactions. The demands placed on cooling, security, and grid stability have been rising. This puts increasing pressure on power grids, which not only have to cope with continuous loads, but also have to respond flexibly to peaks. Meanwhile, the strategic importance of hardware suppliers is growing, particularly those providing security solutions for critical infrastructure, such as nuclear power plants and turbines. The availability of critical raw materials is becoming a geopolitical factor that may influence investment decisions.
It is not just the digital world, however, that is increasing demand for energy. Electrification is also being shaped by the fact that generation and consumption are becoming modular and mobile. Electric vehicles, intelligent supply chains and automated production processes are just a few examples of this transformation. Germany is playing a pioneering role in technology and regulation. The ecological footprint of this development is complex. In addition to CO₂ emissions, factors such as water consumption for cooling and land use play a central role. Economic imperatives and political guidelines are behind the transformation, but social and environmental responsibility are also central to it. Sustainability has become an integral part of corporate planning globally and is also influencing how the electrification transformation is executed.
Global data center electricity consumption
Source: International Energy Agency as of April 2025
This information is subject to change at any time, based upon economic, market and other considerations and should not be construed as a recommendation. Past performance is not indicative of future returns. Forecasts are based on assumptions, estimates, opinions and hypo-thetical models that may prove to be incorrect. Alternative investments may be speculative and involve significant risks including illiquidity, heightened potential for loss and lack of transparency. Alternatives are not suitable for all clients. Source: DWS Investment GmbH.
Innovations are needed to meet rising energy demand. Key solutions include renewable energies, liquid cooling and energy-efficient chip designs. Power supply chips and new grid technologies are helping to shape electricity distribution and usage. Regulatory frameworks and ESG-driven investment strategies are becoming increasingly important, particularly for the security of critical infrastructure and sustainable resource use. Scalability and long-term supply security are also coming increasingly into focus.
“Europe, and Germany in particular, appear well positioned in this transformation,” says Olivier Souliac, Head Indexing at Xtrackers Products at DWS. “Large infrastructure programs and incentives for technological innovation are helping to lay the foundations for sustainable AI infrastructure, smart supply systems and the mobility of the future.”
The race against time already began quite some time ago. Whether AI, cryptocurrencies and the electrification of the economy can be made transformative and sustainable is of central importance to the future viability of our society. In business and in politics, smart strategies, bold investments and an awareness of the hidden costs of progress remain critically important.
CIO Special_Theme 4 - Electrification
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