Power is now the binding constraint on the AI buildout — ahead of chips. The bottleneck has migrated from the server rack to the substation, with interconnection queues and heavy electrical gear taking years.
Tightness
+4 this quarter — Tightened as high-voltage transformer lead times stretched to ~5 years and gigawatts of announced 2026 capacity stalled on power — even with GPUs in hand.
A data center can't run without a grid interconnect and the heavy electrical gear to deliver power — and both take years. Land without power is worthless to a hyperscaler, so power has become the first input in site selection, not the last. Even with accelerators in hand, projects stall waiting on transformers, switchgear, and interconnection — electrical equipment is under 10% of project cost but effectively 100% of the bottleneck.
FERC interconnection reform, a wave of on-site generation (Bloom fuel cells, gas, nuclear PPAs) that sidesteps the grid entirely, and new electrical-equipment capacity. But transformer and turbine lead times stretch years, so most expect power to remain the gating constraint well beyond 2026.
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