2. Power & Infrastructure

The single biggest constraint on the AI buildout: getting enough electricity to the right place.

Power Consumption

Global Totals

• 2025: 448 TWh worldwide (IEA Base Case). US utility power to hyperscale, leased, and crypto: 61.8 GW
• 2026: AI DCs alone expected to reach 90 TWh/year
• 2030: ~945 TWh globally (~3% of total global electricity). McKinsey estimates AI DC demand reaching 156 GW

AI Workload Share

• AI-optimized servers: 21% of total DC power in 2025, rising to 44% by 2030 (Gartner)
• AI server electricity usage set to rise 5x, from 93 TWh (2025) to 432 TWh (2030)
• US DCs used ~4.6% of total US electricity in 2024; could nearly triple by 2028

Power Per Rack Trends

PUE (Power Usage Effectiveness)

Industry average: ~1.5 (50% overhead for cooling/infrastructure). Best-in-class hyperscale: below 1.1. Silicon Carbide (SiC) UPS systems achieve up to 99% efficiency in eco-mode.

Power Sources

Grid Power

Primary source, but interconnection queues and substation capacity are the binding constraint. Average queue time: ~5 years (up from <2 years in 2008). Over 8.9 GW across 105 projects targeting operation by end 2026.

Behind-the-Meter Natural Gas

• New US natural gas facility proposals tripled in 2025
• At least 46 DCs with 56 GW combined using behind-the-meter
• Meta: 366 MW of modular gas generators for El Paso, TX (online 2027)
• 2026 could set a record for new gas power projects, potentially exceeding 100 GW

Renewable Energy

• Meta, Amazon, Google, Microsoft: 9.6 GW of US clean energy purchases in H1 2025 (40% of global total)
• Amazon: Claims 100% renewable by 2025
• Google: Committed to 24/7 Carbon-Free Energy by 2030
• Reality check: Total emissions rising — Google +50%, Amazon +33%, Microsoft +23%, Meta +60% over ~5 years

Nuclear Power (SMRs)

Trump signed four Executive Orders in May 2025 to speed SMR deployment. Major commitments: Amazon/Dominion/X-energy 5 GW; Microsoft exploring Three Mile Island restart; Meta 4 GW.

Cooling Technology

2025 is the year liquid cooling tipped from bleeding-edge to baseline. Common design: 70% liquid / 30% air. Liquid cooling is up to 3,000x more efficient than air.

Direct-to-Chip (D2C)

Fastest-growing segment. Cold plates attached directly to processors. Preserves standard server form factor. Preferred by most hyperscalers for current GPU deployments.

Immersion Cooling

Full immersion in dielectric fluid. Requires component changes. Key players: Iceotope (rack-compatible), Vertiv, GRC (partnered with LG/SK Enmove).

Rear-Door Heat Exchangers (RDHx)

Schneider Electric promotes as upgrade path for legacy DCs. Captures heat from server exhaust before it enters the room.

Key Cooling Companies

Power Distribution Evolution

Hyperscalers deploying medium voltage distribution up to 13.8 kV and DC voltage architectures at 400 VDC and 800 VDC. Schneider Electric: "The 1 MW AI IT rack is coming and it needs 800 VDC power."

Grid Constraints

The Core Problem

Grid access, not land, is the primary bottleneck. Demand-side interconnection queues contain hundreds of GW of DC projects in the US alone.

Queue Backlogs

• Average queue time: ~5 years (up from <2 years in 2008)
• Some California projects stretch beyond 9 years
• ERCOT's large-load queue has nearly quadrupled in a single year

Regional Hotspots

• PJM (Mid-Atlantic/Virginia): Most constrained. DCs responsible for 63% of capacity price increase, translating to $9.3 billion in costs passed to ratepayers
• Northern Virginia: Already consuming massive share of regional electricity
• Ireland/Dublin: DCs consuming substantial portion of national supply
• FLAP-D Europe: Grid congestion, high prices, and long queues

Location Strategy

The industry has shifted from connectivity-first to power-first site selection. AI introduces power-availability zones optimized for scale compute.

Top US Markets (by power)

Why the Nordics Win

• 90%+ renewable electricity (hydro, wind)
• Power costs 40-50% less than most of Europe
• Wind power below $0.03/kWh
• Finland: DC electricity tax EUR 0.0006/kWh (vs standard EUR 0.0225)
• Naturally cool climate reduces cooling costs
• Faster grid connections than continental Europe

Location Decision Factors (Ranked)

1. Power availability ("speed to power")
2. Fiber connectivity / submarine cable access
3. Land cost and availability
4. Tax incentives and regulatory environment
5. Climate (cool = lower cooling costs)
6. Water access
7. Proximity to end users (latency for inference)

Upcoming Power Technologies

Enhanced Geothermal (EGS)

Fervo Energy Cape Station (Utah): first commercial-scale EGS. First 100 MW phase expected to deliver first power in 2026, with 400 MW more by 2028.

Fusion

Google signed a 200 MW PPA with Commonwealth Fusion Systems. Planned 400 MW from inaugural ARC plant, projected first power to Virginia grid in early 2030s. This is the first major commercial fusion PPA for data centers.

Long-Duration Energy Storage

Google's $4.75B Intersect acquisition includes advanced geothermal, LDES, and gas with CCS. Multiple DC companies signed LDES deals in 2025.

Cost of Power

US Electricity Prices

• Average US price by end 2025: 19 cents/kWh (~$190/MWh retail), up ~27% from 2019
• Prices expected to increase up to 40% by 2030
• Wholesale costs 267% higher near DCs vs five years ago

PPA Pricing

Overall renewable PPA prices up 9% in 2025, continuing to rise with demand.

Behind-the-Meter Economics

Faster path to power (12-18 months vs 5+ years for grid) but at higher $/MWh and with emissions tradeoffs. Power is the single largest ongoing operating expense. See Economics & Financing for full cost analysis.