As Mass. positions itself on energy and AI, report cites surge in demand
STATE HOUSE, BOSTON, Dec. 3, 2025…..Power demand from U.S. data centers is expected to surge to 106 gigawatts by 2035, according to a new forecast, a spike that’s driven by growth in artificial intelligence and that may influence the state’s decarbonization and AI leadership goals.
The projected demand is up from the just 40 gigawatts of energy U.S. data centers currently need and a 36% rise over what Bloomberg projected in April, according to a BloombergNEF report released Tuesday. The rise in demand is bolstered by an influx of early-stage data center projects Bloomberg has identified.
The report also concluded that U.S. data centers will use 391 terawatt-hours annually by 2030. But these estimates are still conservative compared to others. Other firms like Goldman Sachs and Boston Consulting Group have projected U.S. data centers will use more than 1,000 terawatt-hours each year by 2030.
AI inference and training are expected to reach almost 40% of the market by 2035, according to the report. AI training workloads usually have higher utilization rates, leading data center utilization rates to rise from 59% to 69% by 2035 as the market shifts toward AI and “hyperscale” centers.
Beacon Hill leaders are positioning the state as a major player in artificial intelligence. Last year, Gov. Maura Healey and lawmakers agreed to a $100 million investment to create a Massachusetts AI Hub, which Healey’s office said would “facilitate the application of artificial intelligence across the state’s ecosystem.”
New England makes up a sliver of the projected energy demand from data centers while almost half comes from regions like PJM Interconnection, which includes Pennsylvania, Virginia and Ohio, according to the report.
Northern Virginia is known as “Data Center Alley” with the highest density of centers in the world. The region is home to 397 data centers that are operational or in development, according to the website Data Center Map.
Massachusetts has 49 data centers and 31 are located in Boston, according to Data Center Map. Marlborough is the next largest market in the state with six centers, followed by Worcester and Springfield with two each. The remaining data centers are located in Andover, Fitchburg, Cambridge, Acton-Boxborough and Fall River.
But with established technology and research bases, as well as new tax incentives, Massachusetts is poised to welcome more.
Plans for a “hyperscale” data center are in the works in Westfield. The $4 billion project was approved by local officials in 2021. In August, Jeff Daley, CEO of Westmass Area Development Corporation, said pre-development work could start in the “next six months or so.” Progress on the data center was not immediately clear and Daley did not respond to a request for comment from the News Service Tuesday.
A sales and use tax exemption for qualified data centers included in a 2024 economic development law was “critical” for supporting the proposal, Daley previously said.
Rep. Mike Finn, who sponsored the tax exemption, noted the policy is a way to boost his district’s economy after noticing a drop in jobs.
“Hampden County is starving for private sector jobs right now,” the West Springfield Democrat said Tuesday, adding the Westfield data center will be the county’s top tax payer when it goes live.
Others are not convinced that Massachusetts will see a wave of additional data centers.
Sen. Michael Barrett said he’s not aware of proposed AI data supercenters in the state.
“That should tell you something,” the Senate Chair of the Joint Committee on Telecommunications, Utilities and Energy said. “The AI data construction boom is well underway. It’s a genuine phenomenon in certain parts of the United States. It is not materializing yet in Massachusetts and New England.”
And it’s unclear whether the boom will hit Massachusetts, he said.
“I think that we have to accept the trend that we’re already seeing and that’s that for a whole bunch of reasons including the cost of land and the availability of surplus water needed to cool these centers, Massachusetts has not been identified as prime real estate for the build up,” Barrett said.
The state will need its fair share of centers, but “the market is sending us a message,” he said.
This could be a silver-lining for the Bay State as it won’t be as stressed from an energy use standpoint as the states in the West and Mid-Atlantic that are seeing a surge in data centers, he said.
Mary Cate Colapietro, spokesperson for ISO New England, said the grid operators has learned that some utilities have seen a “number of inquiries” for data centers but are not aware of any large-scale projects currently under “material development.”
“However, the ISO is closely monitoring this trend and would evaluate proposed projects on a case by case basis. It’s also important to note the impact of a data center would depend on many factors including whether it connects directly to the transmission grid or operates behind the meter, and whether it is collocated with its own power generation or storage,” Colapietro said in a statement to the News Service.
Advocates have raised concerns about data centers’ potential environmental effects. These are especially pressing as President Donald Trump has hampered progress on regional renewable energy projects, potentially leading data center operators to turn to less clean sources like diesel generators, said Noah Berman, senior policy advocate at the Acadia Center.
“It’s literal local pollution that has pretty significant health impacts,” Berman said. “…The impacts are real, and they are being felt in real communities all around and unless these facilities are really monitored closely, there’s also not a lot of transparency when it comes to data center development.”
Along with this, data centers strain water supplies and can cause noise or aesthetic concerns in neighborhoods where they are built, he said.
In Virginia, pushback over light and noise concerns regarding a proposed 1.1 gigawatt data center led Amazon Web Services to withdraw its application less than a year after announcing the project, according to the report.
