Morgan Stanley raises its US data center power gap to the mid-30s gigawatts through 2028
As seen on the 24/7 Wall St. homepage on November 13, 2026.
Can AI Chip Demand Outrun the Power Crunch?
- Morgan Stanley lifts its US data center power shortfall from 30 gigawatts to the mid-30s through 2028 after Texas and Ohio governor races
- Stephen Byrd calls it a delay, not a cancellation, with 2029 deployment much larger and grid optimization dismissed as hype
- Offsets cited: off-grid builds, Louisiana, and Asia, including Google's recent Malaysia deal
- Joe Moore says 2027 chip supply is tightening, memory is hyperscalers' top bottleneck, and stocks wrongly price a 2028 slowdown
The power bottleneck that spooked AI investors is being reframed as a timing issue: delayed gigawatts push deployment into 2029 and stretch the cycle, while Alphabet's Malaysia deal gets named as exactly the workaround that keeps chip demand intact. Moore's call is that the market has already priced a 2028 rollover that he does not see coming.
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The US power shortfall now gates the AI buildout: Morgan Stanley analyst Stephen Byrd raised his estimated US data center power gap through 2028 from 30 gigawatts into the mid-30s after gubernatorial outcomes in Texas and Ohio added approval steps for developers.
Byrd frames the gap as a delay that pushes deployment into a much larger 2029, elongating the AI buildout cycle. He dismisses grid optimization as more hype than reality, since utilities manage for worst-case scenarios like a six-day winter storm and cannot hand average spare capacity to data center tenants.
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Byrd counts off-grid builds, Louisiana, and Asian markets including Malaysia as credible offsets, but they do not fully close the US shortfall as things stand. Norway, Australia, and the UK are each hitting their own data center constraints.
Joe Moore sees the 2027 semiconductor supply picture tightening, with multiple hyperscaler CEOs naming memory as their biggest near-term bottleneck ahead of land, power, and physical shell. He argues stocks are pricing in a 2028 slowdown he does not see coming, making the power crunch a duration trade rather than a reason to sell chips.
