By Laila Kearney

NEW YORK, August 4 (Reuters) - Google GOOGL.O 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.

(Reporting by Laila KearneyEditing by Bernadette Baum)

((Laila.kearney@thomsonreuters.com; (917) 809-0054;))