Asia’s AI boom has a dirty secret: the coal that powers it

Asia's artificial intelligence revolution is being fueled by a paradoxical reliance on one of the dirtiest forms of energy, coal. As countries across the continent race to build cutting-edge AI infrastructure, they are increasingly turning to coal, which provides cheap and stable power but comes at a steep environmental cost. This trend highlights a growing tension between technological advancement and climate commitments, particularly in nations striving to meet international emissions targets while simultaneously investing heavily in digital innovation. The region holds nearly three-fifths of the world’s known coal reserves, according to some estimates, making it a readily available resource for countries looking to power their expanding data centers and AI operations. Coal is favored over imported oil and gas due to its lower vulnerability to geopolitical tensions and supply chain disruptions. However, its use raises serious concerns about air quality, greenhouse gas emissions, and long-term sustainability. Alexander Kheder, a market research analyst at BMI specializing in global AI infrastructure spending and data center expansion, noted that the demand for AI is growing so rapidly that it is outpacing the deployment of clean energy solutions. “AI demand is materialising faster than clean energy generation can be commissioned,” Kheder explained. He pointed out that despite advancements in solar and wind technologies, these renewable sources have yet to provide the continuous, around-the-clock power required by data centers running artificial intelligence systems. This challenge is particularly evident in Malaysia, where the government has been promoting Cyberjaya, a smart city in the southern state of Johor, as a hub for technology and innovation. The area is already home to numerous operational data centers, with plans for even more in the coming years. Local residents, however, are beginning to feel the effects of this rapid growth. Adit Rahim, a 49-year-old communications executive living in Cyberjaya, expressed concern about the increasing pressure on local utility services. “The impact is going to be very, very visible,” he said, highlighting the potential strain on electricity grids and water resources. The reliance on coal is not limited to Malaysia alone. Across Asia, governments and private sector players are grappling with how to balance the need for reliable power with the imperative to reduce carbon footprints. In many cases, the immediate economic benefits of using coal outweigh the long-term environmental risks, especially given the high costs associated with transitioning to renewable energy sources. This dynamic is further complicated by the varying levels of investment in green technology among different countries, leading to disparities in the pace of decarbonization efforts. Experts warn that continued dependence on coal could undermine global climate goals, including those set forth in the Paris Agreement. While some nations have made strides in developing renewable energy capacity, the scale and speed of AI-driven infrastructure demands are testing the limits of current capabilities. The situation underscores the urgent need for innovative solutions that can bridge the gap between energy requirements and environmental responsibility. As the AI industry continues to expand, the question of how to power it sustainably becomes ever more pressing. Policymakers, business leaders, and environmental advocates are increasingly calling for accelerated investments in grid modernization, energy storage, and alternative power sources. Meanwhile, the push for smarter, more efficient data center designs and cooling systems offers potential avenues for reducing overall energy consumption. These developments will play a crucial role in determining whether Asia’s AI boom can be powered cleanly or will continue to rely on the coal that fuels its rise.