DeepSeek’s impact on power demand remains uncertain in Japan

Japan’s industry ministry acknowledges concerns that expanding data centres could drive up electricity consumption but finds it difficult to predict how demand may shift due to a single technology such as DeepSeek. The government’s latest draft energy plan, released in December, projects a 10-20% rise in electricity generation by 2040, citing increased AI-driven consumption.

DeepSeek, a Chinese AI startup, has raised questions about whether power demand will decline due to its potentially lower energy usage or increase as AI technology becomes more widespread and affordable. Analysts remain divided on the overall effect, highlighting the complexity of forecasting long-term energy trends.

Japan’s Ministry of Economy, Trade and Industry (METI) noted that AI-related energy demand depends on multiple factors, including improvements in performance, cost reductions, and energy-efficient innovations. The ministry emphasised that a single example cannot determine the future impact on electricity needs.

Economic growth and industrial competitiveness will rely on securing adequate decarbonised power sources to meet future demand. METI underscored the importance of balancing AI expansion with sustainable energy policies to maintain stability in Japan’s energy landscape.