ADNOC/Microsoft report highlights acceleration of AI transformation

The AI transformation is well and truly underway, with interest and pilots shifting to actual deployments, according to the second edition of the Powering Possible report released by ADNOC and Microsoft

More than 850 global experts across energy, technology, AI, academia and finance – including leaders from OpenAI, TotalEnergies and the International Energy Agency – contributed to the report, which highlights the opportunities and challenges of AI adoption in the energy sector.

With 88% of companies surveyed agreeing that scaling AI is essential to achieving energy transformation, the 2025 report data shows that the energy sector is both powering AI and being transformed by it. AI is expected to have its greatest impact on energy distribution and emerging energy solutions, with applications ranging from predictive maintenance and smart grid management to real-time demand forecasting and energy optimisation. AI is helping to optimise grids, reduce energy usage and emissions, and unlock new efficiencies across the energy value chain.

Nearly nine in ten companies surveyed have increased investment in AI and digital infrastructure since 2024, with 73% of companies deploying AI across multiple business functions. One in five are already using agentic AI to automate complex decision-making. At the same time there is a widespread view that investments in grid modernization (55%) are key to keeping up with AI’s growing demands, followed by energy storage (38%) and advanced materials like high-efficiency conductors (33%).

However, realising AI’s full potential is not without challenges. Cybersecurity has overtaken cost as the top consideration for adoption (49%), followed closely by data quality and consistency (45%) and a shortage of skilled talent (39%). These challenges are compounded by the sector’s slower innovation cycles and the complexity of integrating AI into legacy systems.

As AI adoption continues to scale, access to reliable and sustainable energy is becoming a strategic priority. The challenge, and opportunity, is to align AI for energy and energy for AI so that each accelerates the other, delivering a more sustainable, secure, and inclusive energy future.

His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, and ADNOC managing director and Group CEO said: “AI is no longer a future promise for the energy sector; it’s delivering real impact today from predictive maintenance to AI-optimised grids. At ADNOC, we’re embedding AI as a core capability across our operations, driving transformation at scale with measurable gains in reliability, efficiency, and sustainability. This report reflects the sector’s progress and provides a roadmap for what comes next — investing in talent, scaling proven solutions, and aligning policy with innovation. The next step is clear: move faster, together.”

Brad Smith, vice chair and president, Microsoft said, “Meeting the demands of both the AI era and energy transition will require more than ambition — it will take strong partnerships and innovation. That’s why Microsoft is working closely with energy leaders to reimagine power systems, develop talent, and build responsible AI practices.”

The report is available for download here.