From AI to Air-Conditioning: The Power Boom in Asia

Mayank Maheshwari · Morgan Stanley

Global electricity demand could reach about 36 trillion units by 2030, 15% above consensus, with Asia growing faster than the US.

The electrification super cycle is much broader than AI, and consensus underestimates how much power the world will need by 2030. Mayank's estimate is that global electricity use could reach nearly 36 trillion units, 15% above current market estimates. Outside China that figure is about 23 trillion units, and Asia's demand grows 20% faster than in the US. He concludes that investors may be underestimating Asia's electricity needs and how widely the demand will spread beyond data centers.

“We think global electricity use could reach nearly 36,000,000,000,000 units by 2030, 15% above current market estimates.”at 0:30

Mayank Maheshwari · Morgan Stanley

AI is only about a quarter of incremental power demand; industrial projects and air conditioning add the rest.

Power demand has been framed mainly around data centers and semiconductor factories, and that need is still rising. Mayank argues AI-related demand accounts for only about a quarter of incremental power demand. New industrial projects and air conditioning are now adding meaningful pressure, so the power story extends beyond AI.

“AI related demand is only about a quarter of incremental power demand. New industrial projects and air conditioning are now adding to the pressure.”at 0:55

Mayank Maheshwari · Morgan Stanley

Air conditioning could need as much electricity as data centers by 2030; cooling is up to 40% of India's summer peak.

Cooling is another major source of electricity demand beyond AI. Mayank estimates air conditioning could require as much electricity as data centers by 2030. In India, cooling can account for up to 40% of peak power use during the summer, which shows how acute the demand is in hot markets.

“Air conditioning could require as much electricity as data centers by 2030.”at 2:30

Mayank Maheshwari · Morgan Stanley

Asia could need about $1 trillion of new grid investment through 2030 as renewables and batteries alone are insufficient.

Renewables and batteries will be part of meeting Asia's new power demand, but the grid also needs to expand. Mayank estimates Asia could require about a trillion dollars of new grid investment through 2030. In some markets, data centers are being encouraged to build their own power because a central grid cannot connect them quickly enough.

“Asia could require about a trillion dollars of new grid investments through 2030.”at 3:14

Mayank Maheshwari · Morgan Stanley

Global power prices rose about 20% in 2026; the gap between prices and generation costs will widen about 15% by 2028.

The supply strain is already showing up in power prices, which rose about 20% year on year in 2026. Mayank expects the gap between electricity prices and generation costs to widen by around 15% by 2028. This signals that demand growth is outpacing the ability of supply to keep prices in line with costs.

“Global power prices rose about 20% year on year in 2026, and we expect the gap between electricity prices and generation costs to widen by around 15% by 2028.”at 3:27

Mayank Maheshwari · Morgan Stanley

Owners of reliable power generation and grid infrastructure should capture more value than equipment suppliers.

Because investors may be underestimating how much electricity Asia will need and how broadly demand will spread beyond data centers, the value from this build-out should accrue unevenly. Mayank argues the owners of reliable generation companies and grid infrastructure are better positioned to capture that value than companies that simply supply equipment.

“That could create more value for the owners of reliable power generation companies as well as grid infrastructure than for companies that simply supply equipment.”at 3:49

Mayank Maheshwari · Morgan Stanley

India, Malaysia, Australia and the US are the most attractive power markets.

This is a market call drawn from the demand picture Mayank describes: strong data center and hyperscaler power demand in Asia, cooling-driven peak demand in India, and the grid and gas build-out needed across the region. The episode gives little detailed reasoning for each market, so the conviction is limited.

“We believe the most attractive power markets are India, Malaysia, Australia, and The US.”at 4:00

Mayank Maheshwari · Morgan Stanley

AI agents could raise global power consumption 1.6-fold by 2030 because each task needs far more computing.

A conventional chatbot answers a question with one request, while an AI agent works through a task by searching for information, using software and checking its results. That process needs more computing power, even as the cost of each unit of computing falls. Mayank estimates AI agents could drive a 1.6-fold increase in global power consumption by 2030, which makes data center power demand especially acute.

“AI agents could drive a 1.6 fold increase in global power consumption by 2030.”at 1:29

Mayank Maheshwari · Morgan Stanley

Asia could absorb about 15 GW of extra data center and chip-factory demand from US-linked projects.

New data centers and semiconductor factories must be sited somewhere and get power. Mayank argues some of that investment may shift to Asia because the US cannot add power capacity quickly enough. He estimates Asia could absorb around 15 GW of additional demand from US-linked projects, which he describes as a sizable shift.

“We estimate that Asia could absorb around 15 gigawatts of additional demand from projects linked to The US.”at 1:55

Mayank Maheshwari · Morgan Stanley

Asia may need about 84 GW of data center capacity by 2030, roughly four times 2025 levels.

Asia's data center build-out is a major source of new power demand. Mayank estimates Asia may need 84 GW of data center capacity by 2030, about four times 2025 levels. He points to Thailand's $25 billion of data center investment commitments and to stronger power demand from US hyperscalers in Singapore, India and Japan as evidence the build-out is underway.

“Asia may need 84 gigawatts of data center capacity by 2030, roughly four times that of twenty twenty five levels.”at 2:01

Mayank Maheshwari · Morgan Stanley

Grid connection delays are pushing some data centers to build their own power generation.

Data centers need reliable power quickly, and the central grid in some markets cannot connect them fast enough. As a result, data centers are being encouraged to build their own power. Mayank cites this as a sign of the strain on the grid from AI-related demand.

“In some markets, data centers are being encouraged to build their own power because a central grid cannot connect them quickly enough.”at 3:19

Mayank Maheshwari · Morgan Stanley

Rising gas-fired generation outside China will support about 20 million tons a year of extra LNG imports into Asia by 2030.

Asia's data centers run largely on coal and natural gas today, and Mayank expects gas generation outside China to rise by around 19 GW between 2025 and 2030. That growth supports roughly 20 million tons a year of LNG imports into Asia. Renewables and batteries will contribute, but gas is part of the near-term answer to the power gap.

“We expect gas generation outside China to increase by around 19 GW between 2025 and 2030, supporting roughly 20,000,000 tons a year of LNG imports into Asia.”at 2:53