The Outlook for Data Center Power Demand as AI Token Use Grows

The Outlook for Data Center Power Demand as AI Token Use Grows – Goldman Sachs Exchanges

Market views

Bullish

POWER— AI is driving massive power demand growth equivalent to adding Japan's entire consumption by 2030. US power demand forecast raised to 3.5% CAGR through 2030, with data center demand increasing from 83 to 108 gigawatts, creating significant infrastructure investment opportunities.
NATGAS— Natural gas is expected to meet 60% of data center power demand through an 'all of the above' approach, with significant capacity additions planned. Behind-the-meter gas solutions expected to reach 30 gigawatts by 2030.
VST— Vistra was recently upgraded to investment grade and independent power producers are in healthy financial positions with clear paths to target leverage ratios, positioning them well to capitalize on data center power demand.
CEG— Constellation maintains investment grade status and is well-positioned to benefit from nuclear power demand for data centers. Nuclear contracting by hyperscalers is viewed as an indicator of long-term demand confidence.
UTILITIES— Regulated utilities are seeing 60% increase in capital investment over next five years driven by data center demand, while maintaining healthy balance sheets with 100 basis points cushion on credit downgrade thresholds through proactive equity issuance.
RENEWABLES— Renewables expected to meet 40% of data center power demand as part of 'all of the above' approach to meeting massive infrastructure requirements.

Bearish

TURBINES— Major turbine manufacturers are already halfway sold out through 2031, creating a significant supply constraint that will limit power generation capacity additions and force reliance on less efficient alternatives.
DATACENTER— Data centers face mounting constraints including populist pushback, regulatory moratoriums, interconnect queue delays of 2-7 years, and community opposition. Popular sentiment is so negative that Americans would prefer nuclear plants over data centers in their neighborhoods.

Not investment advice.