Renewable Energy Demand Set to Rise Due to AI Data Centres, Despite Trump Administration

Kevin Cronin, the CEO of the Americas division of Mitsubishi UFJ Financial Group (MUFG), Japan's largest banking group, has stated that the large-scale transition to renewable energy in the U.S. will continue to progress even with Trump's impending inauguration. Despite Trump's numerous anti-renewable energy remarks during his campaign, these have not shaken MUFG's established strategy. Cronin noted that energy projects typically take several years, often spanning multiple election cycles, to plan, finance, and construct. Therefore, MUFG does not adjust its strategic layout based on factors beyond its control.

Cronin further explained that while the bank has benefited from the infrastructure and renewable energy projects in President Biden's Inflation Reduction Act, the real driver of business growth is the increasing energy demand from artificial intelligence data centers. He emphasized that although artificial intelligence is currently in a period of intense public attention, its impact is genuine and far-reaching. It is predicted that by 2030, data center capacity will double, and ensuring reliable power supply will become increasingly crucial in data center location strategies.

Masatoshi Komoriya, Chairman of the Board of MUFG's Americas subsidiary, revealed that due to the varying financing rules for renewable and non-renewable energy projects across different states, the bank has adopted a flexible strategy that combines renewable energy with fossil fuels to meet the energy demands of data centers. Financing renewable energy projects has been key to MUFG's leading position in project finance loan volume in the U.S. for 14 consecutive years. In 2022, MUFG sold its U.S. retail banking arm and focused exclusively on wholesale banking and markets. However, in the fiscal year ending March 2024, the U.S. business still contributed nearly 30% to the group's total profits. Currently, the U.S. business is strengthening its competitive mid-market offerings in areas such as technology and actively expanding its workforce, having hired about 30 people from Silicon Valley Bank, which collapsed in 2023.