With the rapid advancement of digitalisation and expansion in global internet users, digital-driven technologies and services such as artificial intelligence (AI), e-commerce, cloud computing, and cryptocurrencies have significantly boosted the demand for data centres.

The exponential growth in data centres has resulted in substantial energy consumption challenges. The International Energy Agency (IEA) reports that data centres consumed around 1-2% of global electricity in 2022, even without including the vast amounts of energy needed to build related physical infrastructure. The trend is expected to intensify over the next decade, not least due to the increase in use of AI-driven solutions, raising concerns on global carbon emissions, energy security and the environmental footprint of digitalisation at large.

In accordance with the G20’s mandate to promote responsible AI for global public good and the UN’s global roadmap to achieve net-zero emissions by 2050, it is imperative for the G20 to address the energy consumption challenges posed by data centres. Importantly, as one of the world’s leading economic entities, nearly 90% of global data centres are located in G20 countries.

There are, however, significant disparities in data centre distribution between and within Global North and Global South nations. To illustrate, the number of data centres in the Global North is at least sixfold that of the Global South within the G20, highlighting the predominant role of Global North (Table 1). This imbalance is likely to widen the gap in data distribution, data utilisation and the ability to materialise the potentials of digitalisation for economic and social development in the future. Among all Global North members in the G20, the US hosts 46% of global data centres, which is approximately 100 times more than South Korea. On the other hand, China is standing out among the Global South countries with 449 data centres. Despite this significance, it is far less (10x less) than in the US. Such high concentration of data centres in a few countries may raise concerns on the increasing energy consumption.

This policy brief analyses the paradoxical relationship between digitalisation and energy consumption from the perspectives of data centres within the G20. Moreover, it underscores the significant disparities in distribution and concentration, energy consumption of data centres, revealing the substantial imbalances in data power and energy resources among the G20. The policy brief proposes recommendations for the G20 to achieve climate- and resource-friendly digitalisation by balancing the increasing demand of data centres and energy requirements.