Microsoft's Power Problem: AI Chips Are Sitting in Inventory

In 2025, access to power appears to be limitless for major companies. But that’s not the entire truth.

According to Microsoft CEO, Satya Nadella, the company has an unusual problem. AI GPUs are sitting, waiting to be deployed because Microsoft is struggling to build data centres at a fast enough pace.

Speaking on the Bg2 Pod, Satya says: “The biggest issue we are now having is not a compute glut, but it’s power – it's sort of the ability to get the builds done fast enough close to power.

“So, if you can’t do that, you may actually have a bunch of chips sitting in inventory that I can't plug in. In fact, that is my problem today. It’s not a supply issue of chips; it's actually the fact that I don't have warm shells to plug into.”

Recognising the lack of power marks a dramatic U-turn for the industry which has previously managed semiconductor shortages.

Microsoft’s massive expansion plans meet reality

In September 2025, Microsoft announced plans to invest US$80bn in AI data centres for fiscal year 2025. The company’s AI platform transformation is also supported by its growing network of over 400 facilities in 70 regions.

However, despite on-going investments, earlier in the year Microsoft had a 1.5GW self-build slowdown, shifting strategy from self-building to spend US$11.1bn in Q1 2026 leasing ready-available capacity to grow flexibility.

Microsoft’s deployment schedule is being impacted by factors outside its direct control, such as power procurement timelines, grid connection queues and construction delays.

Microsoft AI investments

In September 2025, Microsoft announced a US$30bn investment in AI infrastructure and operations across the UK between 2025 and 2028.

The investment formed one of the biggest financial commitments the company has made in the UK and includes US$15bn in capital expenditure to develop the country’s cloud and AI infrastructure.

As a result, the milestone investment will allow Microsoft, in partnership with Nscale, to build the UK’s largest supercomputer, utilising more than 23,000 Nvidia GPUs.

Prime Minister Keir Starmer said at the time: “Microsoft’s landmark investment is a powerful vote of confidence in the UK’s leadership in AI and cutting-edge technology.

“This commitment will not only strengthen our digital infrastructure and support thousands of highly skilled jobs, but also ensure Britain remains at the forefront of global innovation as we deliver on our Plan for Change.

“We are proud to partner with world-leading companies like Microsoft to build a future powered by British ingenuity and ambition.”

The power procurement crisis

Research from Bain & Company highlights that electric utility connection delays of up to five years are causing the most significant obstacle for data centre growth, signifying an explanation behind Microsoft's deployment schedules. 

The research goes on to claim that by 2030, the world will require twice as much data centre power as is required in 2025. It forecasts that the world will see a demand increase of 163GW, driven mostly by AI. 

Bain & Company state that the US data centre electricity demand could double to 409TWh.

Last month TD Cowen published a report stating that US data centre capacity leased by hyperscalers in Q3 2025 had reached the total capacity leased in 2025. Microsoft was noted to have had a significant increase in activity.

So, with data centres demanding more energy than companies like Microsoft can generate, where will the energy come from?

“Significant power users are working with major producers to secure long-term guaranteed sources of power independent of other grid demands,” Bob Johnson, VP Analyst at Gartner said last year in response to a report suggesting power shortages will restrict 40% of AI data centres by 2027. “In the meantime, the cost of power to operate data centres will increase significantly as operators use economic leverage to secure needed power. These costs will be passed on to AI/Gen AI product and service providers as well.”