Morgan Stanley Says AI Data Centers Face a 38-Gigawatt Power Gap. These Industrial Stocks Fill It.
AI's biggest bottleneck could be an industrial opportunity.
Morgan Stanley projects that U.S. data centers will require around 68 gigawatts of power from 2026 to 2028. Currently, 15 gigawatts of this demand can be met through existing construction projects and the existing or contracted grid capacity. This leaves a potential 38-gigawatt power shortage, which is significant.
In some regions, obtaining a new connection to the electrical grid can take up to five to seven years, making it unfeasible for fast-growing AI companies. As a result, data center developers are exploring alternative methods to secure power more quickly, such as on-site natural gas turbines, fuel cells, and behind-the-meter generation options like wind and solar.
The solution to this 38 GW power gap lies in generating, distributing, and managing the electricity to keep the thousands of power-hungry graphics processing units (GPUs) cool. This necessitates the involvement of companies specializing in power generation, distribution, and management, such as GE Vernova (NYSE: GEV), Eaton (NYSE: ETN), and Vertiv (NYSE: VRT).
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
