Barron's Streetwise
Nuclear, Crypto, and the A.I. Power Shortage
Sep 13, 2024
Stephen Byrd, the Global Head of Sustainability Research at Morgan Stanley, dives into the pressing energy demands of AI and data centers. He discusses the clash between rising energy needs and the limited power supply. Byrd also shares insights on the partnership between nuclear power and crypto mining, spotlighting Talon Energy's innovative approach with Amazon. The conversation highlights emerging investment opportunities in sustainable energy and the exciting intersection of AI, sustainability, and job innovation in the sector.
34:03
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Quick takeaways
- The rapid expansion of AI and cloud services necessitates over 10 gigawatts of new data center power in the coming year.
- Investors are turning to utility stocks for stability amid high tech valuations, showing a strategic shift towards quality and income investments.
Deep dives
Data Center Power Demand Surge
There is a significant and growing demand for data center power, driven largely by the rise of artificial intelligence and the expansion of cloud services by major players such as AWS, Google, and Microsoft. A forecast indicates that over 10 gigawatts of new data centers will need to be constructed next year, yet only about 5 gigawatts are currently being built. The primary constraint on this growth is the limited availability of power and the challenges associated with connecting new data centers to the electrical grid. In particular, some markets, like Virginia, are reporting connection timelines that could stretch up to seven years, which presents a major hurdle for timely data center expansion.
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