Power and borrowing costs, not chips, may now limit the AI boom, two bank reports say

US data-centre power shortfall to 2028

32 GW

Morgan Stanley estimates US data-centre developers face a 32-gigawatt power shortfall through 2028, about 34 per cent of what they will need.

The bank says the gap could widen to 68 gigawatts by 2029, and that large, well-financed companies are getting power first.

Oracle, Sep 11

186 basis points

Oracle, now

288 basis points

Jefferies says the cost of insuring debt of AI builders has jumped: Oracle's five-year credit default swap spread rose from 186 to 288 basis points since Sep 11.

CoreWeave's spread climbed from 749 to 1,118 basis points, the highest levels since the AI spending cycle began in early 2023.

What's next

Jefferies still sees AI funding flowing, but expects earnings growth for AI stocks to slow from about 100 per cent in 2026 to 30 per cent in 2027.

Economy · 15 d ago

Power and borrowing costs, not chips, may now limit the AI boom, two bank reports say

Morgan Stanley estimates US data-centre developers face a 32-gigawatt power shortfall through 2028, about 34 per cent of what they will need.

The bank says the gap could widen to 68 gigawatts by 2029, and that large, well-financed companies are getting power first.

Jefferies says the cost of insuring debt of AI builders has jumped: Oracle's five-year credit default swap spread rose from 186 to 288 basis points since Sep 11.

CoreWeave's spread climbed from 749 to 1,118 basis points, the highest levels since the AI spending cycle began in early 2023.

Jefferies still sees AI funding flowing, but expects earnings growth for AI stocks to slow from about 100 per cent in 2026 to 30 per cent in 2027.

Power and borrowing costs, not chips, may now limit the AI boom, two bank reports say

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