Power Crunch: Morgan Stanley Slashes US Global Computing Share Forecast
Morgan Stanley lowers US computing share forecast to 55% as a massive power shortfall looms between 2026 and 2028.
The United States is facing a looming energy crisis that could stifle its dominance in the digital age. In a recent report, Morgan Stanley has revised its estimate of the US global computing share downward, cutting it from 60 per cent to 55 per cent. This adjustment comes as the financial giant warns that a severe power shortfall is expected to hit the US between 2026 and 2028.
The 32 Gigawatt Gap
The core of the issue is a projected power deficit of 32 gigawatts (GW) within the US. Despite the aggressive push for AI and high-performance computing, the existing energy infrastructure is struggling to keep pace. Morgan Stanley suggests that while US companies are looking for alternatives abroad, these international efforts are unlikely to fully plug the massive energy hole at home.
The Hunger of Next-Gen GPUs
Why is the power demand spiking so drastically? The report points toward the evolution of hardware. Advanced graphics processing unit (GPU) architectures are becoming increasingly power-hungry. Specifically, systems like Nvidia's NVL72 and NVL144 rack-scale systems consume significantly more electricity compared to the older eight-rack-unit (8U) systems, putting an unprecedented strain on the grid.
Looking Beyond Borders: Can the World Absorb the Demand?
As the US struggles with electricity, tech giants are eyeing the "Rest of World" (ROW) for expansion. However, Morgan Stanley argues that there simply isn't enough global capacity to absorb the US shortfall.
- Australia: Nvidia is already planning to establish 2 GW of capacity in Australia by 2027, targeting a market described as having "excess energy."
- Europe: Expansion here is hindered by strict power constraints and agonizingly slow planning approval processes, leaving little room for additional demand.
- Middle East: While there is potential for growth, the report warns that geopolitical instability makes the region a risky destination for massive data centre investments.
- Asia: Projections already include 14 GW of demand from US hyperscalers shifting to Asia through 2030. Yet, even with this shift, the US deficit remains.
The Hard Truth About Energy
The report is blunt about the limitations of shifting operations overseas. Morgan Stanley explicitly stated that international expansion is not a "solution to the US power problem."
"Any incremental spillover would require tapping into energy sources like coal... we don't believe there's enough capacity available to absorb the US power shortfall."
Ultimately, while the world is seeing a surge in data centre construction, the sheer scale of the US's projected 32 GW deficit means the country may have to accept a smaller slice of the global computing pie unless radical energy solutions are implemented.