Microsoft CEO Satya Nadella has warned that the AI sector’s biggest bottleneck is now electricity, with data-centre power shortages leaving advanced chips sitting idle.
Microsoft CEO Satya Nadella has said there isn’t enough power to keep its AI data centres running.
Speaking on the BG2Pod podcast alongside OpenAI boss Sam Altman, Nadella said the AI bottleneck is no longer chips or compute capacity, but electricity itself.
He said: “The biggest issue we are now having is not a compute glut, but it’s power.
“It’s not a supply issue of chips. It’s actually the fact that I don’t have warm shells to plug into.”
To cope, Microsoft has slowed or paused several early-stage data centre builds, part of what the company has called the largest infrastructure scaling effort in its history.
And it’s not alone, as Google has begun signing demand-response agreements with U.S. utilities, promising to throttle data centre usage during grid strain and shift non-urgent AI workloads to off-peak hours.
Meanwhile, Amazon has outlined similar measures, pledging to improve efficiency and support power-grid reliability as its AI footprint grows.
Altman echoed Nadella’s concerns, warning that companies locked into long-term energy contracts could face serious risk if cheaper power sources emerge suddenly.
Lower energy prices, he noted, tend to push compute demand even higher – and today’s infrastructure is already stretched thin.
He explained: “If a very cheap form of energy comes online soon at mass scale, a lot of people are going to be extremely burned with existing contracts they’ve signed.”
Power is quickly becoming AI’s defining competitive edge.
Microsoft, which owns 27 per cent of OpenAI and holds exclusive Azure rights to its models through 2030, is aggressively securing energy partnerships.
Utilities such as Constellation, Vistra and Brookfield Renewable have all inked major supply deals with tech giants racing to secure stable electricity.
The International Energy Agency expects global data centre consumption to nearly double by 2030, hitting around 945 terawatt-hours — just under three per cent of all electricity used worldwide.
Microsoft CEO says there isn’t enough power to fuel AI data centres
