Every major technology company is racing to build AI infrastructure. Behind that race lies an often-overlooked challenge: electricity. Training and operating large AI models requires significant computing power, driving a surge in data center development, and creating new pressures on electric grids around the world. According to the Electric Power Research Institute, data centers consume approximately 4% of total electricity generation and could account for as much as 9% by 2030.
AI is Reshaping Energy Infrastructure Investment
Meeting the power needs of AI infrastructure requires coordination among utilities, independent power producers, renewable energy developers, transmission operators, technology companies, investors, and governments. As projects grow in scale and complexity, contractual arrangements are becoming more sophisticated and increasingly interconnected.
To meet this growing demand, utilities, developers, independent power producers, and large energy consumers are entering into increasingly complex commercial arrangements. These include Power Purchase Agreements (PPAs), generation development projects, fuel supply agreements, interconnection arrangements, and other energy-related contracts involving substantial capital investment and long-term commitments. Internationally, many projects involve foreign investors partnering with local utilities, governments, or developers to finance and operate energy infrastructure, creating additional cross-border, regulatory, and sovereign-risk considerations.
Where Disputes May Arise
With increased contractual activity comes greater dispute risk. As the energy sector responds to AI-driven demand growth, issues involving pricing volatility, delivery obligations, project delays, capacity commitments, regulatory changes, resource availability, and performance expectations are likely to become more common.
Potential disputes may stem from delays in bringing new generation facilities online, disagreements over interconnection timelines and costs, failures to meet power delivery commitments, cost overruns in transmission and grid expansion projects, or regulatory changes that affect project economics. The deployment of new energy technologies may also give rise to performance-related claims, as well as force majeure disputes resulting from fuel supply constraints or extreme weather events.
Building Resilience into Energy Agreements
Given the scale of investment involved, parties may benefit from addressing dispute prevention during contract negotiations. Clearly defined performance standards, risk-allocation provisions, escalation procedures, and dispute-resolution clauses can help reduce uncertainty and provide pathways to resolve disagreements before they disrupt projects.
For energy companies, developers, investors, utilities, and data center operators, carefully drafted dispute resolution provisions are just as important as the underlying business terms. Arbitration can provide an efficient process for resolving complex commercial, technical, regulatory, and cross-border disputes. At the same time, mediation offers parties an opportunity to preserve valuable business relationships and explore flexible solutions.
Mediation is often attempted after an arbitration has been filed, typically after the parties have exchanged information and developed a clearer understanding of the issues in dispute. The AAA's 2025 Energy Industry Infographic highlights the effectiveness of negotiated resolution in the energy sector: approximately 40% of energy cases settled before an arbitration award was issued, and 27% of settled cases closed before any arbitrator compensation was incurred.
These figures demonstrate that many energy disputes can be resolved without proceeding through a full arbitration process. Early resolution can reduce costs, preserve commercial relationships, and help critical infrastructure projects stay on track.
Looking Ahead
As AI continues to reshape electricity demand, the energy sector will increasingly rely on sophisticated contractual relationships to develop, finance, and deliver power. With those relationships comes a corresponding need for effective dispute prevention and resolution strategies.
Understanding the evolving risks associated with AI-driven energy demand—and the tools available to manage them—will be increasingly important for industry participants. These developments and their implications for the future of energy contracts, disputes, and dispute resolution will be explored by leading practitioners at the 2026 AAA-ICDR Energy Conference.