The massive surge in energy demand from data centers is driving an all options on the table approach to energy security. The AI boom is pushing investments toward alternative energy sources that were previously overlooked and underfunded, including geothermal energy. While this carbon-free source currently makes up just 0.4% of the US energy mix, many experts believe it is poised for a breakout, supported by bipartisan backing, advancements in geothermal technologies, and rapidly shifting dynamics in energy markets.

Cindy Taff, CEO of geothermal company Sage Geosystems, told The Hill earlier this year: This will be the decade of geothermal energy. She added that investments are rising sharply, with a favorable political environment supporting strong RD in the sector. Although geothermal remains 10 to 15 years behind wind and solar, Taff and other industry insiders are optimistic about its emerging commercial potential.

The US Department of Energy projects that next-generation enhanced geothermal systems could provide about 90 gigawatts of clean energy by 2050 enough to power more than 65 million homes. Still, the sector faces major hurdles, primarily high upfront and operational costs that constrain expansion.

A 2019 DOE report titled GeoVision: Harnessing the Heat Beneath Our Feet noted: Growth as a national geothermal solution requires overcoming major technical and non-technical barriers to reduce costs and lower risks. Subsurface exploration remains the biggest obstacle due to its high costs, complexity, and risks.

But the investment landscape has shifted dramatically since 2019, especially with the tech sector stepping in to support geothermal development in response to soaring data center demand. Big players like Meta and Alphabet (Google and Facebooks parent) have partnered with geothermal startups. Breakthroughs in deep drilling to reach high underground temperatures have also accelerated in recent years, with startups borrowing tools and techniques from hydraulic fracturing and even nuclear fusion research. These companies are also innovating to address challenges like high water consumption, at a time when capital is flowing into the sector.

In Utah, one next-generation geothermal startup believes it has found a way around some of these costs. Rodatherm Energy Corp., which recently raised $38 million in Series A funding, announced plans for a pilot project using a closed-loop geothermal system that relies on refrigerants instead of water. According to Bloomberg: Building a sealed, closed system that uses refrigerants similar to those in heat pumps instead of water to generate electricity would allow the company to cut costs and improve financial viability. The components normally corroded by water would not need frequent replacement, while conserving water is critical in Utah, the project site.

Bloomberg added that Rodatherm is one of many geothermal firms benefitting from the AI-driven energy boom. Enhancing geothermals potential is seen as a possible game-changer for both the AI sector and US energy security, since geothermal can provide near-unlimited clean power without the variability tied to wind and solar.

A recent report by the independent New Yorkbased Rhodium Group noted: Geothermal energy could economically meet up to 64% of expected demand growth by the early 2030s, provided core assumptions about the sector and the political and economic environment hold.

The report concluded: Policymakers, tech companies, and geothermal developers must move quickly to achieve the speed and scale needed to seize this opportunity. Geothermal energy could be a key solution to meeting the rising electricity needs of data centers.