UBS believes there is enough electricity in the pipeline to power the AI chips the market expects to ship by 2030, but only if most planned power plants are completed on time.
The broker's semiconductor team worked backwards from chip sales forecasts to estimate how much data centre capacity they imply.
It calculated that chips shipped between 2026 and 2030 will need about 380 gigawatts (GW) of data centre capacity, including overheads such as cooling.
Against that, UBS can see about 415GW of new power potentially available, 307GW from national grids and 108GW generated on site at data centres.
Thin margin
The cushion relies on a lot going right.
Around 150GW of the grid supply comes from early-stage power projects that still need regulatory approval.
Most of the on-site generation depends on equipment makers Caterpillar and Innio expanding capacity and steering more of it towards data centres.
The squeeze is tighter in the near term.
UBS expects chips shipped in 2027 to need about 57GW of capacity, but it can only see 38GW of confirmed powered sites.
In 2028 the gap widens, with 76GW needed against 50GW visible.
Closing it would require 40% to 50% of early-stage power projects to be connected in time, which UBS described as not impossible but dependent on friendly legislation and limited supply chain delays.
Risks building
Local opposition is growing.
New York has passed a one-year moratorium on new data centres above 20 megawatts, and several other states are pushing developers to pay for grid upgrades.
Equipment is another bottleneck, with large power transformers taking up to 210 weeks to arrive and grid connections now taking more than four years.
The data centre pipeline tracked by UBS stands at about 276GW, though it jumped 75GW in the second quarter alone.
Nvidia upside
The analysis points to upside for Nvidia, according to UBS.
Converting its capacity estimates into revenue implies Nvidia data centre sales of about $876 billion in 2027 and $1.05 trillion in 2028, ahead of the broker's current forecasts of $714 billion and $953 billion.
UBS expects custom chips designed by the likes of Google and Amazon to take about 45% of new capacity by 2030, up from around 35% this year.
However, Nvidia and AMD graphics processors earn more revenue per gigawatt, so custom chips should capture only about 30% of spending.
The broker expects more focus on how Nvidia and Broadcom help customers finance capacity.
UBS rates Nvidia, AMD, Broadcom and Marvell as Buy.
The chips are ready; the power stations are still filling in the paperwork.
