AI’s voracious appetite is straining energy grids, prompting new power strategies and longer planning horizons
In sum — what to know:
The gating factor: Power is now the biggest gating factor for AI infrastructure, with water to follow next.
Bring your own power: To avoid grid struggles, businesses must consider adopting the bring your own power (BYOP) strategy, which involves owning independent micro-grids and tapping into multiple energy sources.
Nuclear power, a distant solution: Nuclear power as an alternative energy source for AI remains years away.
AI infrastructure is at a crossroads. While on one hand demand for infrastructure is growing at a manic speed, power constraint is choking structural expansion plans.
That was the message from Marc Ganzi, CEO of DigitalBridge — an asset management firm in the digital infrastructure space soon to be acquired by SoftBank — at Metro Connect USA in Fort Lauderdale.
Speaking at the keynote, Ganzi said, “To enable AI, we all know the cliche is, power availability becomes the currency. That’s really the currency that’s driving critical workloads, that’s driving new data centers, and ultimately drives an ecosystem that feeds off of those data centers.”
The power crunch is here to stay
While there is abundant free land, land without power is of no value to data centers, nor is a “will-serve” letter from an utility provider promising capacity and intent to supply.
“A will-cert letter does not mean you have a connection date,” he reminded, noting that developers today are looking at connection dates starting 2030 to 2032.
He said that gaining access to energy is now a power play which really comes down to how politically connected one is in that state, arguing that companies in digital infrastructure business are essentially in power enablement business.
In order to sidestep state-level politics and long grid queues, developers must own grid-independent power, micro-grids, and multi-source energy strategies as a core part of their business model. Also known as bring your own power (BYOP), the strategy promotes onsite power generation over reliance on public grids. Large-scale data centers are increasingly adopting BYOP solutions like temporary generators and micro-grids to get around the capacity crunch and obtain supply in a timeline manner.
This is all the more essential as the power problem is here to stay, Ganzi said. The industry currently leases 12 gigawatts of power every year, while adding four gigawatts of incremental capacity.
“You guys can do the math. We have a deficit of power,” he said, adding that the gap will only widen in the coming years.
And as the energy discourse is turning towards nuclear power as an alternative source for meeting AI’s appetite for baseload power, Ganzi’s message was blunt and clear: “We don’t believe that magically 40 to 60 gigawatts of nuclear power is going to show up in eight years. It’s not.” He predicted that it will take well over a decade for nuclear to become adequately available.
“If we’re all hoping for some magic bullet to save the power problem, I’m here to tell you it’s not going to happen,” he repeated.
More water for cooling
With the data center industry already facing public backlash from local communities for building projects in their backyards, Ganzi predicted that the next challenge will be to face the water controversy.
Large data centers consume up to 5 million gallons of water daily. That’s equivalent to water consumed by a big town of 10,000 to 50,000 people. That amounts to an alarming amount of water wasted yearly. As an example, during a legal battle, it was found that Google data centers in the Oregon region consumed over 355 million gal. in 2021.
With many watersheds already moderately to highly stressed, companies are now looking to tapp reclaimed or recycled water for data center cooling.
“We’ll have to defend our water usage,” Ganzi said. He noted that it is pressing on the industry to design sustainable water cooling systems that call for zero waste.
Already work is underway. Many companies are designing cooling systems that can check water consumption through prevention of evaporation. In 2024, Microsoft launched a green data center design that it says “consumes zero water for cooling”. The design leverages chi-level cooling to achieve the right temperature without water evaporation — an effort to preserve local watersheds.
As a potential solution to the ongoing energy struggle, Ganzi urged the industry to think in longer timelines and planning horizons. He recommended a 36 to 48 month build cycle as opposed to a shorter five-year model, and advised companies to start planning for tomorrow’s supply issues today, with several years of time on hand.
“That’s the mentality you have to have for success,” he said. “The opportunity is huge. The challenges are different. Every year the chessboard changes, and it’s a lot of fun.”
Facts Only
Marc Ganzi, CEO of DigitalBridge, spoke at Metro Connect USA in Fort Lauderdale about AI infrastructure challenges.
Power availability is now the biggest constraint for AI infrastructure expansion.
The industry leases 12 gigawatts of power annually but adds only 4 gigawatts of new capacity.
Data center developers are facing connection dates as far out as 2030-2032.
Companies are adopting "bring your own power" (BYOP) strategies, including micro-grids and multi-source energy solutions.
Nuclear power is not expected to become a viable solution for at least a decade.
Large data centers consume up to 5 million gallons of water daily for cooling.
Google's data centers in Oregon consumed over 355 million gallons of water in 2021.
Microsoft has developed a water-free cooling system for data centers.
Ganzi recommends a 36-48 month build cycle for future infrastructure projects.
Political connections are increasingly important for securing power access.
Public backlash over data center water usage is growing.
Executive Summary
The AI industry is facing a critical bottleneck as power availability becomes the primary constraint for infrastructure expansion. Marc Ganzi, CEO of DigitalBridge, highlighted this issue at Metro Connect USA, emphasizing that power is now the "currency" driving data center development. The industry currently leases 12 gigawatts of power annually while adding only 4 gigawatts of new capacity, creating a growing deficit. To mitigate grid constraints, companies are adopting "bring your own power" (BYOP) strategies, including micro-grids and multi-source energy solutions. However, nuclear power, often cited as a potential long-term solution, remains years away from viability. Beyond energy, water usage for cooling is emerging as the next major challenge, with data centers consuming millions of gallons daily. Companies like Microsoft are exploring water-free cooling technologies, but public backlash over resource consumption is intensifying. Ganzi advises the industry to adopt longer planning horizons, suggesting 36-48 month build cycles to address future supply issues proactively.
The situation underscores a broader shift in how digital infrastructure is developed, with political and logistical hurdles complicating traditional grid reliance. While innovative solutions like BYOP and water recycling are being pursued, the industry must navigate both technical and societal pressures. The power crunch is expected to persist, with connection dates for new projects stretching into the 2030s, forcing companies to rethink their energy strategies entirely.
Full Take
The strongest version of this narrative is that the AI industry is at an inflection point where power and water constraints are forcing a fundamental rethink of infrastructure strategies. The analysis rightly highlights the structural mismatch between demand and supply, with power deficits and water consumption becoming existential risks. The call for longer planning horizons and BYOP solutions reflects a pragmatic response to grid limitations, while the skepticism about nuclear power as a near-term fix is well-founded. The piece also effectively frames water usage as the next battleground, with companies like Microsoft innovating to mitigate environmental impact.
However, the narrative leans heavily on industry perspectives without sufficiently interrogating the systemic drivers of this crisis. For example, the focus on "political connections" as a solution to power access risks normalizing a system where influence trumps merit. The piece also assumes that technological fixes (like water-free cooling) will suffice without addressing broader questions of resource equity—who decides where data centers are built, and who bears the cost of their environmental footprint? The framing of power as "currency" is apt but could be extended to critique the commodification of essential resources.
Root cause: This situation echoes historical patterns of industrial expansion outpacing infrastructure, from 19th-century railroads to 20th-century urban sprawl. The assumption that growth must continue unchecked—without questioning whether AI's current trajectory is sustainable or even desirable—goes unchallenged. The narrative also reflects a broader trend of privatizing solutions (BYOP) to public problems (grid capacity), which may exacerbate inequality if only well-resourced firms can adapt.
Implications: Human agency is constrained by the sheer scale of these challenges. Local communities face displacement or resource depletion, while companies scramble for workarounds that may not scale. The second-order consequences include potential energy market distortions (e.g., micro-grids favoring the wealthy) and geopolitical tensions over water rights. Who benefits? Tech giants with the capital to invest in BYOP and cooling innovations. Who bears the cost? Taxpayers, local ecosystems, and smaller firms priced out of the market.
Bridge questions: What if the solution isn’t just more power but *less* AI? How might decentralized computing models (e.g., edge computing) reduce reliance on mega-data centers? What would a "right to water" framework look like for digital infrastructure?
Counterstrike scan: A coordinated influence campaign would amplify the "power crisis" to justify deregulation, privatization, and fast-tracked energy projects with minimal oversight. The actual content aligns with this pattern in its emphasis on industry-led solutions (BYOP) and dismissal of nuclear power without exploring policy alternatives. However, it stops short of outright advocacy, instead presenting the challenges as neutral facts. The lack of critical voices (e.g., environmental groups, local communities) is notable but not necessarily manipulative—it may simply reflect the source’s industry focus.
Patterns detected: ARC-0024 Ambiguity (implied inevitability of AI growth without questioning its necessity), ARC-0043 Motte-and-Bailey (framing power as a "currency" to naturalize market-based solutions while sidestepping equity concerns).
Sentinel — Human
The article shows strong human signals, including direct quotes, specific examples, and a clear narrative voice, with minimal stylometric or coordination red flags.