Up to 49 Gigawatts of 2028 AI Data-Center Capacity Now at Risk

As much as 49 gigawatts of AI data-center capacity planned for 2028 may face an outright pause or onerous conditions, according to Michael Cembalest, chairman of market and investment strategy at JPMorgan Asset Management.

That's the real fault line in the AI buildout — not this year, not next year, but 2028. And the midterm elections just redrew the map.

"About 37 gigawatts supposed to be delivered in 2028 may be subject to an outright pause, with another 12 gigawatts subject to various conditions that can be pretty onerous," Cembalest told clients in a strategy note and podcast published Wednesday.

One gigawatt equals 1 billion watts of power — enough to electrify more than 800,000 homes, according to various estimates. We're talking about the scale of entire cities.

What do the midterms change?

Democratic gubernatorial winners who pledged to restrict data centers include Gina Hinojosa in Texas, Rob Sand in Iowa and Keisha Lance Bottoms in Georgia. Voters in various local initiatives also overwhelmingly backed data-center restrictions or pauses.

The biggest question after the midterms isn't whether data-center construction is at risk — it's how much it will be curtailed.

But Cembalest draws a sharp line between what's already in the pipeline and what hasn't broken ground.

"Almost 75% to 80% of all of the AI data centers that are expected to be delivered in 2027 are already under construction, so these are going to be completed," he said.

In plain words: 2027 is largely locked in. 2028 is where the fight happens.

Cembalest, who gave investors a timely warning on semiconductor stocks this summer a day before the sector imploded, said builders now face the prospect of paying their own grid costs, water limits, labor mandates and the end of tax incentives.

How big is the exposure?

The scale of these projects is hard to overstate. Meta Platforms this summer expanded the power capacity of its northeast Louisiana data-center project to five gigawatts — more than three times the electricity the city of New Orleans uses on a given day, according to the Institute on Taxation and Economic Policy, a left-leaning think tank.

Analysts at research and consulting firm SemiAnalysis, led by Maya Barkin, reached conclusions that mirror Cembalest's. Ahead of the midterms, they estimated that around three-quarters of an expected 33.8 gigawatts due for 2027 across the top 20 states was already under construction.

Like Cembalest, they're looking past 2027.

"The fight is over 2028. Our model has 62.2 [gigawatts] of U.S. net additions that year, most of which hasn't started construction. Much of it sits in states electing a governor on Nov. 3," said Barkin and her team.

The SemiAnalysis team flagged one specific danger: a prolonged permitting freeze by the Texas Commission on Environmental Quality. Their worst-case scenario puts 30.3 gigawatts of planned 2028 capacity at risk from that single regulator.

That's the takeaway: most 2028 capacity hasn't started construction, and state-level politics now controls the gate.

How are markets reacting?

Investors questioning what's next for the AI buildout sold energy companies with exposure to that game on Wednesday. The worries stretched Thursday to Korea's Kospi index, which has become a leading indicator for the AI trade.

The index slumped more than 5%. AI chip makers SK Hynix and Samsung each tumbled 7%.

The selling shows how the AI trade now runs through energy markets in Texas and chipmakers in Seoul alike.

What is OpenAI doing about it?

Possibly trying to get ahead of the pressure, OpenAI on Thursday published a policy blueprint. It reaffirmed promises to:

• pay for energy and infrastructure costs
• protect local resources
• create local job and business opportunities

What's the so-what?

The 2027 pipeline is physically locked in — concrete poured, capital spent. The 2028 pipeline of roughly 62.2 gigawatts depends on permits from governors who just ran against data centers, and markets from Houston to Seoul are already repricing that gap.