The intelligence may be artificial, but the growing electricity needs are very real. Just ask Willdan Group, Anaheim’s most valuable publicly traded company.
The environmental engineering services firm on Aug. 1 reported second-quarter results that surpassed analysts’ estimates, boosting the share price by 12%.
“The electric load growth macrotrend strengthened over the quarter, fueled by growth in electricity demand at data centers from artificial intelligence,” Chief Executive Mike Bieber said in a statement announcing the results.
The increased demand for AI has benefited companies with local ties like Broadcom, whose co-founder Henry Samueli is now the second richest man in Orange County (see the July 29 issue for more details).
160% Increase
While AI’s electric thirst may come as a surprise to some, experts have had their eyes on it for a long time.
“On average, a ChatGPT query needs nearly 10 times as much electricity to process as a Google search. In that difference lies a coming sea change in how the U.S., Europe and the world at large will consume power —and how much that will cost,” Goldman Sachs said in a report in May.
The financial giant added: “Now, as the pace of efficiency gains in electricity use slows and the AI revolution gathers steam, Goldman Sachs Research estimates that data center power demand will grow 160% by 2030.”
CNBC reported in late July that “concerns are mounting about whether the U.S. can generate enough electricity for the widespread adoption of AI, and whether our aging grid will be able to handle the load.”
As the demand grows, Willdan’s goal is to help companies, utilities and government agencies control their electricity use, including “efficiency and sustainability.”
For example, Willdan said in July it had reduced the energy used annually at a large data center in the Pacific Northwest by more than 4.1 million kilowatt hours.
For perspective, the average American home buys about 899 kilowatt hours of energy per month, according to the U.S. Energy Information Administration.
Energy Efficiency
“Artificial intelligence and other new technologies have the potential to significantly increase energy consumed by data centers,” CEO Bieber said last month. “By using energy efficiency strategies, data center owners can reduce cooling loads and increase reliability.”
Recent contract wins for Willdan include Meta (Facebook) to study emissions related to voluntary clean energy procurement; the State of Virginia to perform analysis on grid impact from increased energy demand and the City of Paramount for solar, storage and EV charging infrastructure.
Willdan Group’s shares have gained more than 80% in the past year, as companies increasingly seek ways to hold down energy costs. The shares were trading at $36.42 apiece as of Aug. 7, for a market cap of $509.6 million.
The company has boosted its annual forecast to a profit of $2 to $2.10 a share on sales of $280 million to $290 million. Analysts had expected $1.85 a share in sales of $280.1 million.
