# AC Electricity Surge Outpaces AI Data Centers, Favors Solar in Developing Nations > Source: > Published: 2026-07-21 07:39:24+00:00 **July 21, 2026, (Inside AI) —** Air conditioning is set to drive far more electricity demand than artificial intelligence over the next decade, yet its power needs align better with cheap solar energy and carry fewer social costs, according to a new Reuters Breakingviews analysis. Global electricity use for cooling has expanded by **4% annually** since **2000**, reaching about **2,900 terawatt-hours** last year, or roughly **10%** of world consumption, the **International Energy Agency** reports. If that pace continues, cooling will add some **1,400 terawatt-hours** by **2035** — nearly double the **700 terawatt-hours** the IEA projects for data centers in the same period. This surge is fueled by two unstoppable forces: rising global temperatures and growing wealth in developing nations. **June 2026** was the second warmest on record, and scientists expect the full year to be the hottest ever due to a rare **Super El Niño**. In **India**, per capita income has nearly quadrupled in two decades, driving AC adoption even as temperatures hit **48 degrees Celsius** in **Uttar Pradesh**, a state with nearly **250 million** people. "While India is hot and getting hotter its per capita income is shooting up, nearly quadrupling over two decades. Hence a lot more people are installing air conditioning," the analysis notes. The IEA says only about a fifth of European homes had AC in **2022**, while India's penetration is perhaps half that — leaving decades of growth ahead. Yet unlike AI's round-the-clock data center loads, cooling demand peaks during sunny hours, making it a natural match for solar power. **NextEra Energy** estimates solar firmed with batteries will cost **$35 to $75 per megawatt-hour** by **2030**, compared to **$90 to $111** for a new gas plant. Solar already met three-quarters of new electricity demand last year, per think tank **Ember**. "Air conditioning use mostly synchronizes with sunshine, with a few extra hours after the sun sets. That makes it a natural match for solar, the cheapest and most rapidly constructed source of generation," the report states. This is critical for developing countries that lack financial heft. By contrast, AI's data centers need **24/7** power, pushing tech giants toward gas turbines and even nuclear. **Lazard** estimates new nuclear's all-in cost is about twice that of solar-plus-batteries. Meanwhile, green power grows cheaper as conventional generation costs rise. The social calculus also favors AC. The **World Health Organization** estimated in June that over **200,000** people in Europe died from heat in the past four years, with nearly all cases preventable, and **500,000** annual deaths globally between **2000** and **2019**. AI power demand, meanwhile, has stoked electricity price hikes, pollution fears, and job loss anxiety in developed nations. Efficiency gains are possible too. About half of new U.S. units are air-source heat pumps that also provide winter warmth, often cutting net energy use since heating typically guzzles more power. The financial picture diverges sharply. Mature AC technology spreads gains widely: **Lennox International** trades at **20 times** forward earnings, while peer **Trane Technologies**, with a data center cooling business, commands a **50% premium**. In power generation, **GE Vernova**, a gas turbine giant, fetches over **50 times** estimated EBITDA; Chinese solar leader **JinkoSolar** sits at just **6 times**. "Perhaps the financial play is to simply make broader bets," the analysis concludes. "It's safer to bet that cooling helps developing nations get richer than to assume the data center boom continues."