Lack of Electricity is Limiting Russia's Ambition to Achieve AI Supremacy

Widespread electricity shortages are straining economies globally, and Russia is no exception.

These challenges are jeopardising its ambitions to become an AI powerhouse, despite efforts to curtail energy-intensive crypto mining in select regions.

Both crypto mining and AI data centers demand significant energy and water resources for server cooling, exacerbating the strain on power infrastructure.

This issue is not unique to Russia; many nations have struggled to meet growing energy demands in the 2020s, leading to political, social, and economic disruptions.

As a result, enthusiasm for economic growth and global trade expansion has waned, raising questions about how nations can balance innovation with sustainability.

Russia Suffers from Energy Problems Despite Crypto Mining Ban

As part of its efforts to advance AI development, Russia has been hosting BRICS-related events, touting progress in fields like entertainment.

During the Cultural Media Digital Forum on 13 to 14 November, Moscow's Mayor Sergey Sobyanin highlighted that the city's creative industries have grown by 35% over the past two years, largely due to AI.

However, Russia's AI ambitions are being stifled by severe energy shortages.

According to the national grid operator, AI-related electricity consumption reached approximately 2.5 GW in 2024 and is projected to climb to 10 GW in the coming years.

Despite these demands, Russia has only been expanding its national grid capacity by 2–3 GW annually, far below what is needed.

The ongoing war in Ukraine further complicates efforts to accelerate energy infrastructure development.

On 19 November, Russia announced a ban on cryptocurrency mining in Ukrainian territories under its control and other energy-stressed regions.

Cryptocurrency mining, an energy-intensive process used to validate transactions on blockchain networks like Bitcoin, has been identified as a significant drain on resources.

Whether this ban will alleviate energy shortages and bolster AI-related initiatives remains uncertain, leaving questions about Russia's ability to balance its technological aspirations with its constrained energy capacity.

Power Shortages Plague Other Countries Besides Russia

In 2023, South Africa grappled with rolling blackouts, but the crisis eased in 2024 after state-owned power provider Eskom proposed significant tariff hikes to the National Energy Regulator of South Africa (NERSA), including a 36.15% increase for 2025 and additional rises for 2027 and 2028.

Meanwhile, Iran faces its own energy struggles, with rolling blackouts enforced by the ruling Islamic leadership due to fuel shortages.

These outages are particularly devastating in regions with harsh winters, exacerbating hardships for citizens.

Russia, despite enduring two winters amidst its war with Ukraine, may face even greater energy challenges in the coming cold season.

Power shortages are projected to have lasting negative effects, particularly on AI development, which heavily relies on stable energy and internet infrastructure.

As the BRICS bloc—comprising Brazil, Russia, India, China, South Africa, and recent additions like Iran, Egypt, Ethiopia, and the UAE—positions itself to counter Western technological dominance, Russia has taken a leading role in promoting an "anticolonial AI and digital cooperation agenda."

This initiative aims to establish alternatives to Western-controlled digital infrastructures, potentially including an independent internet system.

However, progress within Russia has been disappointing, hindered by energy crises and infrastructural limitations.

Can Russia surmount these obstacles to realise its AI aspirations, or will its ambitions falter under the weight of these persistent challenges?