Data Centers

Power availability, not capital, is the binding sector constraint.

Grid interconnection delays of 2-4 years are explicitly named by Legrand management as deferring data center openings from 2026-2027 into 2028, while Oracle's repeated invocation of 'establish data centers in new geographic locations' in consecutive filing sections signals that existing grid hubs are saturated. Vertiv's $1.45 billion acquisition of UtilityInnovation Group to add microgrid controls and behind-the-meter power architecture, and CoreWeave's target to double active power capacity to 1.7 GW by year-end 2026, confirm that power availability is the variable limiting AI infrastructure deployment speed across every layer of the supply chain.

AI compute demand is contracted years forward, not anticipated.

CoreWeave's $66.8 billion contracted backlog, up more than $50 billion year-over-year, with average contract duration extending from four to five years and the company described as 'virtually sold out' of 2026 capacity, is the clearest single data point that AI infrastructure demand is booked, not speculative. Microsoft's commercial remaining performance obligation surged 84% to $678 billion with the long-duration tranche (beyond 12 months) up 112%, while Schneider Electric exited 2025 with a record EUR 25 billion backlog and management explicitly stated that a large portion of Q4 bookings will execute in 2027. The forward demand indicator to watch next cycle is whether CoreWeave's $12 billion-$13 billion 2026 revenue guide and $17 billion-$19 billion exit run-rate prove conservative, which would signal that even contracted backlog is understating realized demand.

Vertical integration into power supply chain is the defining M&A theme.

Vertiv acquired UtilityInnovation Group for $1.45 billion to extend its portfolio from rack-level power to grid interconnect, while Eaton acquired Boyd Thermal for $9.55 billion, net of cash acquired, adding thermal management at scale and Fibrebond for $1.43 billion, net of cash acquired, adding modular construction. Quanta Services is investing $500 million-$700 million to build proprietary high-voltage transformer and breaker manufacturing, crossing from EPC contractor into infrastructure supply. These moves collectively compress the white space between power generation and rack-level delivery, raising barriers to entry for companies that remain pure-play in any single layer.

Nuclear baseload is being locked into multi-decade hyperscaler contracts.

Constellation Energy signed 20-year power purchase agreements with both Microsoft (Crane Clean Energy Center) and Meta (Clinton Clean Energy Center), committing around-the-clock, emissions-free nuclear output to data center loads under contracts that extend through the mid-2040s. This crosses the language threshold from exploratory clean energy procurement to contracted baseload, and Constellation's nuclear fleet extensions to 80-year operational lives at Peach Bottom and Dresden confirm that these assets are being managed as perpetual infrastructure, not retiring generation. The FERC co-location ruling in December 2025, which found PJM's behind-the-meter netting rules unjust and unreasonable, introduces the primary regulatory risk to this commercial model before it can be replicated further.