How Google plans to reduce US AI data centre power consumption

The technology giant has partnered with Indiana Michigan Power (I&M, an American Electric Power company) and Tennessee Power Authority in the US. These alliances will involve scaling back power use at Google’s data centres when called upon by the electric utilities to free up space on the grid.

First reported by Reuters, this news comes at a significant time for the industry, particularly as the grid continues to experience surging demand. As AI continues to use significant amounts of power, energy and water to run, data centres are now having to reckon with the continued challenge of sustainability and power constraints.

The offering will help to reduce I&M’s peak load in times of high energy demand, American Electric Power says, which is like programmes currently available to residential and commercial and industrial customers.

Google’s goal is to boost I&M’s ability to manage electricity demand during peak times, which should contribute to power overall energy costs.

“I&M is excited to partner with Google to enable demand response capabilities at their new data center in Fort Wayne, IN,” says Steve Baker, president and chief operating officer of I&M.

“As we add new large loads to our system, it is critical that we partner with our customers to effectively manage the generation and transmission resources necessary to serve them. Google’s ability to leverage load flexibility will be a highly valuable tool to meet their future energy needs.”

These are the first formal agreements by Google in demand-response programmes with utilities to reduce its machine learning workloads. Google says this strategy should enable data centres to be interconnected faster and reduce the need to build new transmission and power plants. It can also help grid operators manage power grids more effectively.

This news comes in the wake of Google’s 2025 Environmental Report, which revealed that – even though the company was able to reduce its data centre energy emissions by 12% in 2024, it still has plenty of work to do to tackle its overall sustainability and curb its data centre energy consumption.

Speaking upon the report’s release, Google chief sustainability officer Kate Brandt said: “We know there is much more work to be done, but I remain hopeful given the positive impact enabled by AI – from transforming how people engage with information, to enhancing business and economic growth, to enabling scientific breakthroughs and driving sustainable innovation for society.”

Google announced plans in 2024 to build a US$2 billion data centre in Fort Wayne, Indiana – one of the largest economic development projects in the state to date.

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