Difficult yet to predict DeepSeek’s potential impact on power demand, Japan’s METI says #JapanFinance

TOKYO (Reuters) – Japan’s industry ministry is aware of a view that expansion of data centres may increase demand for electricity, however, it is difficult yet to predict how demand may change with the appearance of one technology such as DeepSeek, it said by email.

In late December, the government released a draft of its basic energy plan, a major policy document reviewed about every three years, projecting electricity generation would rise between 10-20% by 2040 and citing higher AI-driven usage.

However, the recent emergence of Chinese startup AI DeepSeek, which may use less power compared to competitors, saw analysts splitting on whether the demand for electricity will fall as a result – or increase as technology may become more affordable and widespread.

In emailed comments, Japan’s Ministry of Economy, Trade and Industry, or METI, said that energy demand related to AI involves complex factors such as the expansion of the use of AI by improving performance and reducing costs, and the development of energy-saving technologies.

“For this reason, it is difficult to describe the impact on future energy demand with a single example,” it said, noting that Japan’s economic growth and industrial competitiveness will depend on whether it is possible to secure sufficient decarbonised power sources to address the demand.

(Reporting by Katya Golubkova; Editing by Michael Perry)