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11h ago

Power Constraints Threaten Data-Center Expansion for AI

Goldman Sachs warns that slow permitting and multi‑year grid-connection timelines could prevent roughly half of planned data-center and power capacity from being completed.

Loretta Thornton, 66, looks at a massive artificial intelligence data center behind her home on Scaife Road on August 19 in Memphis. Colossus 2 is owned by SpaceXAI in the Whitehaven neighborhood.
Data center-related construction takes place near the Whitehaven neighborhood outside of Memphis in April 2026.
Saline, Michigan, Construction of a $16 billion data center, developed by Related Digital for Oracle and OpenAI.
Audience members in favor of a data center moratorium erupted when the Memphis City Council voted to postpone a vote on a temporary moratorium on October 6 in Memphis.

Overview

  • Goldman projects global data-center electricity demand will rise 170% from 2025 to 2030 with more than 60% of that growth in the United States.
  • The bank estimates about $7.6 trillion in capital spending on computing, data centers and power from 2026 through 2031 and says roughly half of planned capacity may not materialize in the near term.
  • The U.S. currently has about 2,600 gigawatts of proposed generation and storage in grid-connection queues, and the median time from a connection application to commercial operation is around five years.
  • Since January, at least 86 projects have been canceled or delayed—76 tied to local opposition—with high-profile examples including Oracle’s Project Jupiter, paused Google sites in Finland, and permitting hold-ups for Microsoft in Michigan.
  • Tech companies and utilities are turning to heavier debt and direct financing of power infrastructure, with Goldman projecting $420 billion in hyperscaler debt issuance in 2027 and larger utility capital plans, which raises execution risk and wider financial exposure.