AI runs on power. But power isn’t moving fast enough

Artificial intelligence is booming — and America’s power grid is struggling to keep up.

At the World Economic Forum, President Trump recently warned that “We need double the energy we currently have in the United States for AI to be as big as we want to have it.” Elon Musk has echoed similar concerns, predicting that AI data centers could overwhelm the electricity supply next year. The Department of Energy predicts that AI-driven electricity demand could increase sixfold by 2030.

They’re right about the scale of AI’s electricity needs. But they’re wrong about the diagnosis.

America doesn’t suffer from a lack of energy resources. We have vast oil and gas reserves, plus growing solar and wind energy capacity. The real problem is getting the electricity that’s already, or soon could be, generated from these energy sources to the data centers where it’s needed.

Solving this coordination challenge will require a new approach to energy infrastructure — one with an eye toward future needs.

This distinction between coordination and total capacity matters. If the problem were simply about generating more electricity overall, the solution would be straightforward: build more power plants and transmission lines to bring power to all the new data centers. But that would — and will — take years, if not decades. New transmission lines alone often take years to complete.

Instead, we need to build new data centers next to existing energy deposits — such as natural gas fields in places like West Texas, Oklahoma, North Dakota, and elsewhere — so that power-hungry data centers can build on-site generating plants and obtain the electricity they need, without having to connect to the broader grid. Using standardized data center designs and prefabricated components could further accelerate construction timelines and get data centers up and running years faster than previous generations of data centers built in traditional hubs like Northern Virginia or Silicon Valley.

Data center developers already recognize the advantages of this coordinated approach. A recent KPMG survey revealed that 77% of data center stakeholders consider it key to build alongside energy generation.

But in practice, data center developers often struggle to understand and vet energy producers. And in turn, those producers often misunderstand the needs of data center operators.

This is a challenge even for the largest AI developers. The Stargate project, a $500 billion AI data center investment backed by OpenAI and SoftBank, chose Abilene, Texas, as its flagship site after fielding interest from sixteen different states — largely for Abilene’s energy availability, alongside other land and regulatory advantages. Despite the initial fanfare, practical challenges quickly tempered aspirations, and the initiative has mostly stalled. As a result, Stargate has quietly scaled back its 2025 ambitions to building a single data center — in Ohio.

To lead in the AI age, America will need more than chips and capital. It needs clearer rules, faster transactions between energy producers and AI developers, and a system that rewards coordination just as much as production.

If we solve this coordination challenge, America can lead the AI revolution and improve everything from health care to education to national security. But if we fail, we’ll be left with plenty of power — just not where it matters.