A new report from Goodbody says we are in the middle of the greatest investment period in the history of Big Tech.
This year tech giants like Microsoft, Meta and Google's owner Alphabet are planning to deploy close to $650 billion on AI - most of it on new data centres.
Speaking on RTÉ's Morning Ireland, Goodbody's tech analyst Patrick O'Donnell argued that Ireland needs to compete with other nations over that "unprecedented" capital expenditure.
This will include the new generation of data centres specifically designed for processing artificial intelligence, compared to traditional facilities used for cloud computing and streaming services.
"We're in a very different era now. AI data centers are powering large language models, which process vast amounts of information," Mr O'Donnell explained, adding that they have much larger energy requirements.
The analyst believes that Ireland needs to look into "a significant modernisation of the grid network and infrastructure to house modern data centres."
"We've seen what ByteDance have said in terms of they are choosing Nordics over Ireland, citing capacity advantage and the energy positioning."
Data centres accounted for 22% of electricity usage in Ireland in 2024, up from just 5% in 2015.
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The energy demand from data centres is expected to rise to 30% by 2030, as the Government is warned that the rapid growth is adding to the risks around energy costs and climate targets.
Friends of the Earth has called for a moratorium on new data centres in the country.
Mr O'Donnell argued that, to address the grid issued, tech giants are working towards developing off-grid facilities.
"They'll bring their own solutions from an energy point of view. It's likely we'll see lots more renewables co-location alongside data centres as this AI wave plays out," he said.
In December, the Commission for the Regulation of Utilities announced that data centres could be built where they meet at least 80% of their annual energy demand through new renewable electricity sources.
