Elon Musk has been sounding the alarm on what he sees as the next great bottleneck for artificial intelligence: not chips, not talent, but plain old electricity. During a CNBC interview on May 20, 2025, Musk predicted that AI’s appetite for power would outstrip available generation capacity by mid-to-late 2026, even after the current transformer shortage gets sorted out.
The grid gap and Musk’s fix
Musk doubled down on the thesis at the World Economic Forum in January 2026, arguing that the US would soon be manufacturing more AI chips than it could actually power. The constraint, he said, isn’t silicon. It’s watts.
Rather than wait for utilities to catch up, his AI venture xAI has taken matters into its own hands. The company’s Colossus data center cluster in Memphis, Tennessee, has begun sourcing electricity from on-site gas turbines relocated from a decommissioned power plant in Southaven, Mississippi.
Reports indicate the project could eventually involve as many as 59 gas turbines. An initial deployment of 27 units is capable of generating roughly 495 megawatts, enough to power a small city.
