AI gold rush comes with a catch: America could run out of power by 2028 as data centers drain the grid, Morgan Stanley says
Well, turns out the real AI arms race isn't about who can build the fanciest chatbot—it's about who can keep the lights on. Morgan Stanley's new report is basically a neon sign screaming that tech titans are about to hit a hard power limit, and spoiler alert: it's not pretty. While Microsoft, Google, Amazon, and Meta are collectively throwing nearly $400 billion at AI infrastructure in 2025, they're discovering that computational muscle means absolutely nothing when your data centers are sitting idle because there's literally no electricity to run them.
The numbers paint a sobering picture: the U.S. faces a potential power shortfall of up to 20% by 2028, with a projected deficit ranging from 13 to 44 gigawatts—equivalent to powering over 33 million American households. Today, data centers already consume 4% of U.S. electricity, a share expected to balloon to 12% by 2030. Morgan Stanley's analysis reveals that global data center capacity is projected to increase sixfold over the next five years, with $3 trillion in spending planned just for data centers and hardware through 2028. The bank suggests solutions including natural gas turbines, nuclear energy, fuel cells, and even converting Bitcoin mining operations into AI computing centers, while also advocating for regulatory reforms to fast-track permits and improve grid interconnection. However, experts warn that achieving these goals will require complex coordination across supply chains, labor markets, and financing—plus buy-in from Congress, since the President's ability to scale power capacity alone is fundamentally limited.
