Goldman Sachs warns power shortage is biggest obstacle to AI growth

Data center power demand to surge 170% by 2030; grid connections take 5 years

Goldman Sachs has warned that a shortage of power infrastructure could become the single biggest obstacle to AI industry growth, even as astronomical sums of money pour into the sector.

In a report released Monday (local time), the investment bank said the pace of power infrastructure expansion is failing to keep up with the AI industry's rapid growth.

Global data center power demand is projected to surge 170 percent between 2025 and 2030, according to the report. More than 60 percent of that increase is expected to come from the United States.

About 2,600 GW worth of power generation and energy storage projects are currently awaiting grid connections in the US — more than double the country's existing generation capacity.

However, the median time from grid connection application to actual commercial operation stands at around five years. Local community opposition has also emerged as a significant obstacle to infrastructure expansion.

Since January, 86 related projects have been canceled or significantly delayed, with 76 of them directly linked to opposition from local residents, Goldman Sachs said. Residents have cited concerns including noise and traffic congestion from data center construction, increased water consumption and the possibility of higher electricity bills.

Such delays in power infrastructure development could push back data center construction schedules and disrupt the return on investment for companies that have committed enormous sums of capital.

Goldman Sachs estimated that approximately $7.6 trillion will be invested in AI computing, data centers and power infrastructure between 2026 and 2031. The bank also projected that major technology companies — including Amazon, Google parent Alphabet and Microsoft — will issue around $420 billion in bonds next year, more than 60 percent above this year's estimated figure.

Jason Topsky, Goldman Sachs' head of global digital infrastructure investment banking, said that while there are dozens of challenges to building data centers — including financing — "power availability is likely to remain the most persistent bottleneck."

yckim6452@heraldcorp.com