Banking giant Morgan Stanley says AI’s energy appetite is accelerating faster than the grid can keep up, raising the stakes for companies racing to build the next generation of data centers.
In a new note to clients, Morgan Stanley says surging AI demand could create a power shortfall across US facilities by 2028, reports the Economic Times.
Led by Stephen Byrd, the bank’s analysts say the gap is a potential deficit large enough to match the electricity needs of 33 million American households. While Byrd and his team say AI is the “most important technological shift in modern history,” they warn that power constraints could stifle the sector’s growth.
According to the analysts, the AI data center buildout could create as much as a 20% power shortfall, roughly 13 to 44 gigawatts, in a couple of years. The team suggests the US could lean on energy fuel cells, natural gas turbines and small nuclear deals to collectively add about 40 gigawatts to the power supply.
The bank also says the US could repurpose Bitcoin mining facilities to help overcome supply constraints.
Last month, JPMorgan CEO Jamie Dimon warned that energy is a potential choke point for the AI sector.
“Someone won’t get the power they need.”
In the same month, ex-Google CEO Eric Schmidt sounded the alarm about the country’s energy bottleneck. According to Schmidt, the US needs to construct the equivalent of over 60 large nuclear reactors by 2030 to power AI workloads.
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