NEW YORK, August 4 (Reuters) - Google has

signed agreements with two U.S. electric utilities to reduce its

AI data center power consumption during times of surging demand

on the grid, the company said on Monday, as energy-intensive AI

use outpaces power supplies.

Utilities in the country have been inundated with requests

for electricity for Big Tech's AI data centers, with demand

eclipsing total available power supplies in some areas.

That power crunch has led to concerns about spiking bills

for everyday homes and business and blackouts.

It has also complicated the technology industry's expansion

of AI, which requires massive amounts of electricity - fast.

Google's agreements with Indiana Michigan Power and

Tennessee Power Authority would involve scaling back power use

at the technology giant's data centers when called upon by the

electric utilities to free up space on the grid.

They are the first formal agreements by Google in

demand-response programs with utilities to temporarily curtail

its machine learning workloads, a subset of artificial

intelligence.

"It allows large electricity loads like data centers to be

interconnected more quickly, helps reduce the need to build new

transmission and power plants, and helps grid operators more

effectively and efficiently manage power grids," Google said in

a blog post.

Demand-response programs have typically been used by other

energy-intensive industries like heavy manufacturing or

cryptocurrency mining. In exchange, the businesses generally

receive payments or reduced power bills.

The programs involving AI activity in data centers is

generally new, and details of the commercial arrangements

between Google and the utilities were not clear.

While demand-response agreements apply only to a small

portion of demand on the grid, the arrangements might become

more common as U.S. electricity supply tightens.