Microsoft CEO Satya Nadella emphasized the critical role of energy costs in determining which nations will excel in the artificial intelligence (AI) sector during a discussion at the World Economic Forum (WEF) in Davos. Speaking on January 20, 2026, Nadella outlined a direct correlation between a country’s economic growth and its energy expenses associated with AI development.
As nations increasingly invest in AI infrastructure, Nadella highlighted the emergence of a new global market involving “tokens,” which serve as essential units of processing for users engaging with AI models. He stressed that economic expansion hinges on translating these tokens into tangible growth, meaning that nations with lower energy costs stand to gain a competitive edge.
In a relevant context, hyperscale tech companies like Microsoft have allocated billions towards constructing data centers essential for AI operations. Microsoft projected a staggering $80 billion investment in these facilities by the beginning of 2025, with half of this expenditure occurring outside the United States, according to Nadella.
Nadella also pointed out that the societal implications of energy usage in AI must be considered, warning that public support could wane if energy, a limited resource, is primarily utilized without demonstrating improvements in critical areas such as healthcare, education, and overall economic competitiveness.
Amid European energy challenges, marked by rising costs following Russia’s invasion of Ukraine in 2022, Nadella noted the complexity of total cost ownership, addressing factors such as energy production efficiency and the cost of silicon technology necessary for data centers.
As the AI landscape evolves, the discussion around energy costs serves as a reminder of the intertwined nature of technology and economics, highlighting the need for strategic investments in both energy and infrastructure to ensure sustainable growth in this transformative sector. As countries navigate these challenges, the focus on efficiency and innovation could lead to promising advancements that bolster economic outcomes globally.