Analysts at U.S. investment bank Morgan Stanley (MS) say data centre power capacity in America is likely to double by the end of 2027.
According to Morgan Stanley, rising demand for high-performance computing used to support generative artificial intelligence (A.I.) is fueling exponential growth in data centre power needs.
The investment bank forecasts that U.S. data centre power will increase from 40 gigawatts this year to 79 gigawatts at the end 2027.
It is also predicted that global power usage for A.I. applications and models will grow from 68 terawatt-hours in 2024 to 378 terawatt-hours by 2027.
Morgan Stanley notes that the rapid growth of the data centre market will be reflected in the asset-backed securities market.
The bank’s analysts say that asset-backed securities issuance is on track to reach an all-time high of $8 billion U.S. this year, a 37% year-over-year rise.
Morgan Stanley anticipates that much of the growth in data centres will involve new builds, which could cost between $30 million U.S. and $34 million U.S. per megawatt (MW).
However, on a down note, the bank noted that the time required to bring new data centres online is lengthening, particularly in states such as California where new projects can take up to 125 months to be finalized.
The stock of Morgan Stanley has risen 9% so far this year to trade at $101.99 U.S. per share.
