Microsoft is not currently facing a shortage of AI chips, but rather a lack of power to connect them. CEO Satya Nadella says the company has GPUs in inventory that cannot be installed due to a lack of suitable data centers with sufficient power and water.
Nadella revealed this in the BG2 Pod podcast. The discussion arose when BG2 Pod host Brad Gerstner asked whether Nadella and OpenAI CEO Sam Altman agreed with Nvidia CEO Jensen Huang, who stated that there is no chance of a compute surplus in the next two to three years. Nadella’s answer was clear: the problem lies elsewhere.
Data center shells
“I think the cycles of demand and supply in this particular case, you can’t really predict, right? The point is: what’s the secular trend? The secular trend is what Sam (OpenAI CEO) said, which is, at the end of the day, because quite frankly, the biggest issue we are now having is not a compute glut, but it’s power,” Nadella said in the podcast.
He added: “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”
By “shells,” Nadella means data center shells —empty buildings with all the necessary infrastructure, such as power and water, to start production immediately.
The power shortage is forcing hyperscalers to adjust their strategy. Whereas the focus used to be on obtaining sufficient hardware, attention is now shifting to energy supply and cooling. Microsoft is therefore investing not only in chips and servers, but also in energy solutions and suitable data center locations.