JIL's Take on AI: Big AI Companies Have Become Power Companies
Microsoft, Google, Amazon, and Meta have effectively become power companies. The Trump administration is urging PJM Interconnection to auction power access to data centres. US data centres already consume 4% of national electricity.
Microsoft, Google, Amazon, and Meta have effectively become power companies. Their data centre expansion programmes are constrained not by capital or compute, but by megawatts.
The Trump administration is urging PJM Interconnection — the largest grid operator in the US — to auction power access priority to data centres. US data centres consumed 4% of national electricity in 2024, a figure projected to rise sharply.
Elon Musk has proposed orbital data centres as a long-run solution to terrestrial grid constraints. The proposal is not as speculative as it sounds: low-earth orbit provides persistent solar exposure and eliminates cooling costs.
For investors, the critical insight is that energy infrastructure has become the binding constraint on AI scaling. The companies that solve power — whether through grid priority, nuclear partnerships, or novel generation — will compound at the rate of AI growth. Those that cannot secure power will be constrained regardless of software capability.
