Elon Musk Says AI Needs More Power Than the Grid Can Handle. Is He Right?

When Elon Musk, the CEO of Tesla (NASDAQ: TSLA) and Space Exploration Corporation (NASDAQ: SPCX), talks astir a problem, it gets attention. Right now, he's arguing that artificial quality (AI) requires much powerfulness than the U.S. powerfulness grid tin provide. This is some a imaginable menace and an accidental if you recognize the issue.

Here's the speedy outline of Elon Musk's concern, what helium is doing astir it, and what different companies are doing astir it.

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What is AI?

AI is incredibly powerful, arsenic quality headlines often constituent out. But erstwhile you measurement backmost and look astatine it objectively, AI is conscionable a fancy machine program. It can't beryllium without power. And the magnitude of powerfulness AI uses is huge. The U.S. powerfulness grid is struggling to support up.

The impervious of that comes from New York and Texas. Both states person moved to dilatory the operation of AI information centers. A large portion of that is the electrical request from AI, though h2o usage is besides concerning. Greg Abbott, the Governor of Texas, precocious noted that caller transportation requests, mostly from AI information centers, were much than 5 times highest request successful the state.

This is an illustration of wherefore Elon Musk had to crook to off-grid powerfulness erstwhile helium built Colossus I and II. Along with these elephantine information centers, the CEO besides built his ain earthy gas-fueled powerfulness works successful Mississippi. Musk is besides talking astir utilizing star power, arsenic well. Power progressively appears to beryllium the limiting origin successful artificial intelligence.

The accidental Musk's informing highlights

There's an accidental successful this warning. For example, Bloom Energy (NYSE: BE) builds hydrogen substance cells. These are factory-built items that tin beryllium easy delivered to wherever they are needed to supply off-grid power. The institution entered 2026 with a $6 cardinal substance compartment backlog, up a shocking 140% twelvemonth implicit year. The institution provides backlog figures lone erstwhile a year, noting connected its second-quarter telephone that it has ample customers not yet successful the backlog. Its backlog is presently increasing faster than its revenue. That suggests the adjacent backlog update successful aboriginal 2027 should amusement much growth.

Caterpillar (NYSE: CAT) is besides benefiting. While astir investors cognize the concern elephantine for its earth-moving equipment, it besides makes off-grid powerfulness generators. The company's backlog astatine the extremity of the 2nd 4th grew 92% twelvemonth implicit year, totaling $72 billion. That's not each powerfulness equipment, but that information could really marque the banal adjacent much attractive. Indeed, you can't physique a information halfway without the earth-moving instrumentality that CAT makes. In different words, it has 2 ways to payment from AI's growth.