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The entire AI bubble is built on a vague sense of inevitability — that if everybody just believes hard enough that none of this can ever, ever go wrong that at some point all of the very obvious problems will just go away.
Sadly, one cannot beat physics.
Last week, economist Paul Kedrosky put out an excellent piece centered around a chart that showed new data center capacity additions (as in additions to the pipeline, not brought online) halved in the fourth quarter of 2025 (per data from Wood Mackenzie ):
Wood Mackenzie’s report framed it in harsh terms:
US data-centre capacity additions halved from Q3 to Q4 2025 as load-queue challenges persisted. The decline underscores the difficulties of the current development environment and signals a resulting focus on existing pipeline projects. While Texas extended its pipeline capacity lead in Q4 2025 , New Mexico, Indiana and Wyoming saw greater relative growth. Planned capacity continues to be weighted by new developers with a small number of massive, speculative projects, targeting in particular the South and Southwest. New Mexico owes its growth to a single, massive, speculative project by New Era Energy & Digital in Lea County.
As I said above, this refers only to capacity that’s been announced rather than stuff that’s actually been brought online, and Kedrosky missed arguably the craziest chart — that of the 241GW of disclosed data center capacity, only 33% of it is actually under active development:
The report also adds that the majority of committed power (58%) is for “wires-only utilities,” which means the utility provider is only responsible for getting power to the facility, not generating the power itself, which is a big problem when you’re building entire campuses made up of power-hungry AI servers.
WoodMac also adds that PJM, one of the largest utility providers in America, “...remains in trouble, with utility large load commitments three times as large as the accredited capacity in PJM’s risked generation queue,” which is a complex way of saying “it doesn’t have enough power.”
This means that fifty eight god damn percent of data centers need to work out their own power somehow. WoodMac also adds there is around $948 billion in capex being spent in totality on US-based data centers, but capex growth decelerated for the first time since 2023. Kedrosky adds:
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