Who benefits from the AI power bottleneck?

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Dec 4, 2025

In this discussion, Shanu Mathew, a senior vice president at Lazard with expertise in sustainable equity and energy markets, dives into the complex narratives surrounding AI's power bottleneck. He explores how different players—hyperscalers, chip manufacturers, and utilities—each have unique incentives that shape their messaging about energy scarcity. The conversation reveals why equipment makers thrive on promoting bottlenecks and how the dynamics of power pricing impact various sectors. The insights illuminate the intricate balance of interests in this rapidly evolving landscape.

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INSIGHT

Incentives Shape The Power Narrative

Incentives shape narratives about AI power constraints across the whole supply chain.
Shanu Mathew argues we must read each actor's statements through their economic incentives.

INSIGHT

Hyperscalers Play A Strategic Game

Hyperscalers prefer to build optionality but may also lean on market overbuild to avoid long-term underwriting.
That dual incentive makes their public narrative about power constraints strategically ambiguous.

ADVICE

Use Long‑Lead Orders To Preserve Optionality

Locking long-lead equipment contracts preserves optionality while avoiding full CapEx commitment.
Expect hyperscalers to pre-order turbines, switchgear, and other long-lead items to secure future builds.

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The bottleneck holding back AI is a scarcity of power, or so goes the story. That may be true — and plenty of reporting backs it up — but different actors in the space face varying incentives to play up or play down that narrative.

So what incentives are at play, and how do they shape each player's story?

In this episode, Shayle talks to Shanu Mathew, senior vice president and portfolio manager-analyst for U.S, sustainable equity at Lazard. Last month on X, he posted a breakdown of the actors — including hyperscalers, chip makers, utilities, and others – and how the different incentives they face shape how they talk about energy and AI. They cover topics like:

Hyperscalers’ mixed incentives: the benefits of building their own capacity vs encouraging others to overbuild
Why equipment makers, chipmakers, and land developers benefit from talking up the bottleneck to boost demand for their services
How independent power producers and gas players benefit from high prices
How the power-bottleneck narrative has shifted over time

Resources:

Latitude Media: ERCOT’s large load queue has nearly quadrupled in a single year
Latitude Media: The power bottleneck is changing data center financing
Latitude Media: Early-stage data centers are driving up US power demand forecasts

Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.

Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com.

Catalyst is brought to you by Bloom Energy. AI data centers can’t wait years for grid power—and with Bloom Energy’s fuel cells, they don’t have to. Bloom Energy delivers affordable, always-on, ultra-reliable onsite power, built for chipmakers, hyperscalers, and data center leaders looking to power their operations at AI speed. Learn more by visiting BloomEnergy.com.

Catalyst is supported by Third Way. Third Way’s new PACE study surveyed over 200 clean energy professionals to pinpoint the non-cost barriers delaying clean energy deployment today and offers practical solutions to help get projects over the finish line. Read Third Way's full report, and learn more about their PACE initiative, at ⁠www.thirdway.org/pace⁠.