Issue Weak incentives and the cost of AI downtime have kept data centres inflexible

Summary

Data centres have rarely adjusted their power use for the grid, mainly because of economics rather than technical barriers. CB Insights explains that incentives to offer flexibility have historically been weak. At the same time, pausing or slowing AI workloads is expensive, since idle computing means lost value. Operators have therefore had little reason to modulate their demand in response to grid or price signals. The firm argues that this trade-off is now starting to shift as grids come under strain and regulators push for participation. Demand flexibility refers to the software, hardware and services that let data centres change electricity use on request.