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Investing.com -- Morgan Stanley analysts warned in a note this week that surging artificial intelligence demand could leave the United States facing a “power shortfall totaling as much as 20%” for data centers through 2028.
The bank said the deficit could amount to roughly 13 gigawatts (GW) of capacity.
“We project a U.S. power shortfall through 2028 of 44 gigawatts (GW), before considering innovative time-to-power solutions that do not rely on the typical grid interconnection process,” analysts led by Stephen Byrd wrote.
They added that “time to power solutions could surprise to the upside,” potentially reducing the gap.
Morgan Stanley attributed the potential shortfall to the rapid buildout of AI infrastructure, calling AI computing demand “the most important technological shift in modern history.”
The bank added that “AI infrastructure stocks are at the center” of that transition, with the “non-linear rate of AI improvement” creating broader asset valuation impacts.
To meet demand, Byrd believes a range of “time to power” alternatives could come online, including “natural gas turbine transactions” that might add 15–20 GW of supply, 5–8 GW from Bloom Energy fuel cells, and 5–15 GW from nuclear-powered data center deals.
The bank also highlighted a trend of Bitcoin miners converting existing facilities into high-performance computing centers.
It identified two models, the “new neocloud,” typified by IREN’s five-year lease with Microsoft, and the “REIT endgame,” involving long-term powered-shell leases such as APLD’s 15-year deal with a hyperscaler.
Morgan Stanley concluded that both models “offer compelling value creation,” especially as power constraints become a defining challenge for AI expansion.