Nvidia’s next-gen chips will guzzle electricity. Will the US have enough power?

Subscribe to enjoy similar stories. Nvidia just unveiled new AI chips that will be several times as powerful as anything on the market today, and use considerably more electricity. By 2027, a server rack stacked with its top-of-the-line chips will use five times the power of today’s machines, Nvidia CEO Jensen Huang told a jam-packed audience at a California conference this week.

Big tech companies, which are all betting heavily on AI, will undoubtedly buy those chips, even if the price skyrockets. But there’s growing evidence that there won’t be enough electricity to power all of their AI dreams. The virtual world is starting to hit a physical limit.

It all starts with gas turbines, the spinning machinery that transforms natural gas—the largest source of America’s electricity—into electric power. Power company executives say they’re building more big turbines but are unwilling to vastly boost capacity in a way that would satisfy every potential AI company, out of fear of overbuilding. The wait for new turbines now stretches more than three years.

And the costs to buy them are jumping faster than Taylor Swift concert tickets. The power crunch could come soon. Morgan Stanley estimated last year that data centers will need 57 gigawatts worth of new electricity capacity by 2028, or as much as 70 large-scale power plants produce.

There are three dominant turbine makers—GE Vernova, Mitsubishi Power and Siemens Energy. The boom in power demand associated with AI has been incredibly rewarding to their investors. GE Vernova stock is up 160% in the past year; Mitsubishi Heavy Industries, the parent of Mitsubishi Power, is up 60%; and Siemens Energy has rocketed 300%.