The AI gold rush is underway — but the industry's multibillion-dollar profits come at a steep cost: the environment.

AI darling Nvidia (NVDA) reports earnings after market close on Wednesday, and how the numbers shake out could dictate the next big move for AI stocks.

Wall Street analysts are predicting another positive quarter of earnings growth, driven by demand from companies aggressively building out AI infrastructure. Yahoo Finance data shows about 87% of the analysts that cover Nvidia rate it a Strong Buy or Buy.

"Nvidia is the one chip player fueling the AI Revolution," Wedbush tech analyst Dan Ives told Yahoo Finance.

But while Wall Street pros are feeling bullish, environmentalists have concerns.

Nvidia, which designs GPUs that power everything from ChatGPT to autonomous cars, outsources the manufacturing to foundries, or "fabs." The company holds an estimated 80% of the AI chip market.

Read more: How does Nvidia make money?

The bulk of AI chipmaking happens in East Asia, where energy usage is surging. Fabs are energy-intensive, and they’re powered mostly by fossil fuels. For example, in Taiwan, over 80% of electricity still comes from coal, oil, and gas.

Electricity use from AI chipmaking jumped more than 350% between 2023 and 2024, according to a 2025 report from Greenpeace East Asia.

In Taiwan alone, the industry now consumes as much electricity as 93,000 Taiwanese households, per Greenpeace.

Global electricity demand for AI chipmaking is estimated to reach nearly 40,000 gigawatt-hours by 2030, notes Greenpeace. That’s more than the current total of Ireland’s electricity consumption.

And by 2027, AI electricity needs could be comparable to the current total of Argentina’s electricity consumption, according to a recent New York Times study.

And while data centers stacked with Nvidia's powerful chips are necessary to train and use large language models like OpenAI's (OPAI.PVT) ChatGPT or Meta's (META) Llama, they're also energy-intensive. Rival Alphabet (GOOG) has said it will likely miss its climate targets due to the increasing power demands of training AI.

The world’s AI future is being built chip by chip. But as the industry scales, so does its environmental footprint. Keep that in mind as you read Nvidia’s financial statements and listen to Nvidia co-founder and CEO Jensen Huang on the earnings call. Those profits have a cost, the World Economic Forum (WEF) pointed out.

"To minimize the environmental impact of AI, it is crucial that the rapid expansion in data centres is powered by sustainable and responsible energy sources," WEF warned in a white paper earlier this year. "The substantial financial investment in this infrastructure in some regions will not be affordable for most countries. Therefore, viable alternatives will be necessary, alongside strong collaboration among energy providers, environmental organizations, technology firms and governments."