IMF, The International Monetary Fund is championing artificial intelligence (AI) as a driver of unprecedented economic growth. But in doing so, is it overlooking the deeper costs of progress? In its new report, “Power Hungry: How AI Will Drive Energy Demand,” the IMF predicts a strong AI-fueled GDP boost by 2030, but this optimism is shadowed by surging energy demands, carbon emissions, and a troubling question: Are we being fooled into mistaking more output for real prosperity?
Economic Gains: AI’s Projected Contribution to GDP Between 2025 and 2030, AI is expected to add around 0.5 percentage points annually to global GDP growth, an optimistic claim that some may view as economic hype or “bull.” This projection suggests trillions of dollars in added value across industries like healthcare, finance, logistics, and research. AI’s appeal lies in its ability to automate complex processes, extract insights from vast datasets, and enhance real-time decision-making. While benefits may be unevenly distributed, the IMF anticipates a net positive impact, particularly for emerging economies that are proactively investing in AI infrastructure.
However, nations that fail to adopt AI risk falling further behind, widening the global technological divide. This underscores the IMF’s call for inclusive policies and “international support.” But what exactly does that entail? Who provides this support, who receives it, and under what conditions? Without clear definitions and equitable frameworks, “international support” risks becoming a vague, feel-good phrase, well-meaning in tone but possibly reinforcing dependency rather than enabling true self-determined progress. If we’re to bridge the divide, the world must move beyond slogans and toward shared, accountable action..
Environmental Risks: Energy Demands on the Rise The report underscores a critical concern: AI’s exponential growth will fuel skyrocketing demand for electricity. Data centers powering AI models require constant high-performance computing, cooling, and maintenance. By 2030, AI could consume up to 1,500 terawatt-hours (TWh) annually, equivalent to India’s total current electricity usage. This spike could drive a 1.2% cumulative rise in global greenhouse gas emissions over five years, potentially costing the environment over $60 billion.
The Human Cost: Who Are We Working For? Amid the buzz around AI’s transformative potential, a deeper philosophical and societal question emerges: Why are we racing to deploy AI so aggressively if the cost is accelerating harm to the planet and, in turn, ourselves? In our (read it “theirs”) pursuit to automate and enhance everything, are we not creating a future where we must labor even more intensely to power the very tools designed to liberate us?
This contradiction is becoming increasingly difficult to ignore. As AI workloads demand more electricity, communities worldwide are being asked, directly or indirectly, to ramp up energy production. This often means more industrial output, more extraction of finite resources, and more emissions. In short, we may be trading short-term efficiency gains for long-term sustainability, risking the health of our ecosystems, societies, and our own well-being.
The irony is poignant: technology designed to ease our burdens may, without responsible guidance, end up amplifying them. If the future of work demands that we run faster merely to sustain the machines we’ve created, then it’s worth questioning whether our trajectory serves humanity’s best interests. Rather than enabling a future with shorter workweeks and more leisure, we risk being pushed toward six- or seven-day work schedules just to fuel the relentless demands of AI systems. Is this truly the progress we envisioned?
The Sustainability Challenge Despite these projections, the IMF maintains that AI’s economic benefits can outweigh its environmental costs, if stakeholders act responsibly. A transition to renewable energy, investments in green computing, and rigorous energy transparency standards are critical. Companies like Google and Microsoft are already leading with renewable-powered data centers and energy-efficient models, but broader global adoption is needed.
AI itself could also become part of the solution. Its applications in smart grid management, EV battery optimization, manufacturing efficiency, and climate modeling can help reduce emissions across sectors. If deployed wisely, AI could become a powerful ally in the climate fight.
Policy Imperatives: Steering AI Towards Sustainable Development The IMF urges governments to adopt proactive policies that align AI development with environmental and social goals. These include:
- Funding sustainable AI R&D
- Implementing carbon pricing for data center emissions
- Mandating AI energy use disclosures
- Promoting international cooperation on AI governance
Experts stress that without these frameworks, market incentives alone won’t guarantee climate-conscious innovation.
Tech Industry’s Role: Leading the Transition Tech giants are uniquely positioned to shape AI’s trajectory. From energy-efficient chips to better server utilization and transparent carbon reporting, firms like Nvidia, Intel, and Amazon Web Services are already pushing the boundaries. The growing trend of “green AI”, which emphasizes performance per watt over brute force is another hopeful sign.
AI developers can also adopt techniques like model pruning and federated learning to reduce the energy footprint of training large models, further supporting sustainable innovation.
Inequality and Inclusion: The Other AI Divide While AI promises economic gains, its benefits will not be evenly shared. High-income nations are better positioned to lead due to stronger digital infrastructure and skilled labor markets. In contrast, developing countries risk being left behind. The IMF calls for cross-border cooperation, digital education, and inclusive policies to bridge the gap and prepare workers for the AI era.
Rethinking ‘International Support’: Aid or Illusion?
The IMF’s call for “international support” to help developing countries catch up in AI adoption sounds reasonable, but what does it actually mean in practice?
Too often, such phrases are used as diplomatic placeholders, masking asymmetries in power, agency, and benefit. Who defines the terms of this support? Who funds it and who truly controls the flow of technology and knowledge and infrastructure?
Without transparent, equitable frameworks, “support” risks becoming a form of dependency disguised as partnership. True international cooperation must mean more than extending platforms or tools to the Global South; it must involve fair technology transfer, inclusive governance, debt-free financing, and capacity-building that empowers local decision-making.
In other words, real support enables sovereignty, not reliance.
Reframing Progress: From Power to Purpose The growing tension between AI-driven growth and environmental preservation invites a deeper societal reflection: What kind of progress are we pursuing? Is technological advancement truly meaningful if it demands deeper extraction from the planet and increasingly unequal labor from humanity?
Some critics argue that without a fundamental shift in our development models, AI risks becoming another tool of exploitation, not just of nature, but of time, dignity, and community. To ensure AI uplifts rather than burdens us, ethical deployment must go beyond compliance and market performance. It must ask: How do we want to live?
What Would a Balanced Outcome Look Like? To navigate the dual promise and peril of AI, the global community must pursue a balanced outcome, one that aligns innovation with integrity. This involves not only technological foresight but also a shift in values and societal priorities.
A balanced outcome means:
- Equitable access to AI benefits, ensuring that all nations and communities, regardless of income level, can harness AI for local development.
- Sustainable energy integration, where AI operations are powered by clean, renewable sources, minimizing their carbon footprint.
- Transparent industry practices, with clear reporting on AI’s environmental and social impacts.
- Global education and workforce transformation, preparing people for meaningful, adaptive roles in an AI-enhanced world.
- AI for good: prioritizing projects that target climate resilience, health equity, and human rights over commercial maximization.
Ultimately, it means putting human and planetary well-being at the heart of every AI deployment. Progress must not be defined solely by GDP growth or algorithmic power, but by how technology enhances the human experience and preserves the Earth for future generations.
Looking Ahead: Responsible Growth in the Age of AI The next five years will be crucial. Will the world embrace AI in a way that boosts prosperity while preserving the planet? The IMF report provides a roadmap, but it’s up to governments, industry leaders, and civil society to choose the path forward.
If successful, the world could enter a new era of intelligent, sustainable growth, but only with foresight, collaboration, and global responsibility at the core.
In the end, our challenge isn’t just to build smarter machines, it’s to avoid being misled by the illusion of growth. AI must serve people and planet alike, or else we risk celebrating progress while accelerating decline. The future of intelligence must be measured not only by what we build, but by what we protect.
Your Turn: Two Questions That Demand an Answer:
If AI is truly our greatest invention, why does it demand so much and give so little to those who need it most?
What if AI isn’t our future, but our distraction from building a future worth living in?
