Power availability has emerged as the binding constraint for the AI infrastructure buildout.
The buildout continues to gather pace, yet rapid growth in demand for the computing power provided by data centres is driving an energy bottleneck.
Estimates suggest that AI-related assets could use 15-20% of current US power by 2030, a level which would test the limits of the power grid without significant energy investment. Not only that, but there also remains a large backlog of data centre and other projects awaiting grid-connection – hence, energy investment is key to unlocking further AI infrastructure.
Data centre specialists see power demand forecasts as materially understated and think that the AI-related energy demand will see these forecasts re-rated much higher. This could put pressure on energy developers to explore pairing new renewable energy (increasingly nuclear energy) with long-duration storage solutions, and contractual flexibility.
2026 has opened with a clearer regulatory backdrop for small modular nuclear reactors (SMRs), a rising area of interest and renewable energy investment in relation to powering datacentres. These SMRs offer procurement optionality for datacentres and AI Hyperscalers like Microsoft and Amazon, particularly where baseload power and industrial decarbonisation are strategic business decisions.
Capital spending is expected to favour not only energy development but also investment in grid upgrades in transmission and energy storage solutions. Investment in these areas is expected to reach USD$148 billion annually and cumulatively exceed USD$1 trillion by 2030 (driven by datacentre and electrification.
As we’ve discussed in previous articles, the AI investment narrative has matured beyond pure speculation and market participants are now beginning to ask serious questions about how realistic the level of spending is.
Clearly, the bottleneck in energy supply is a major constraint that will require heavy investment, which is why we see this as another one of our key themes with strong tailwinds.
What we’re reading: Horizons Top Trends 2026 | S&P Global