US AI data centers face 32 GW power shortfall by 2028, Morgan Stanley warns

What happened

The prolonged timelines for grid interconnections and transmission upgrades, typically spanning four to seven years, clash with the shorter demands of new AI data center (a building full of computers that runs online services) developments. The anticipated power shortfall could significantly hinder AI data center growth, prompting potential regulatory actions and moratoriums in key states.

Share AI data centers face increasing challenges due to power shortages, as utilities and grid operators struggle to meet the rapid construction timelines of hyperscale projects. This situation underscores electricity availability as a critical constraint on AI computing capacity expansion.

Observers should monitor for legislative sessions addressing energy constraints and any executive orders from Abbott. Landry or the Louisiana Legislature that could suggest a moratorium is being considered.