Data centers are going to be starved for power in as little as two years, according to DigitalBridge CEO Marc Ganzi, who offered a warning for the industry during the company's first-quarter earnings call last week.

“Power is really the constraining factor” for industry growth, Ganzi said. “And that's going to become more evident to you and to the rest of the investor community over the next two years.”

Ganzi said he told investors two years ago that data centers would run out of power in five years.

“Well, I was wrong about that,” he said. “We're running out of power in the next 18 to 24 months.”

Power generation itself isn't the issue, Ganzi said. Rather, the constraint is power transmission and distribution, with transmission grids' capacity challenged.

Power was already a concern for the industry two years ago. In 2022, Dominion Energy, the utility serving data centers in the industry’s global nexus of Loudoun County, Virginia, revealed that it wouldn't be able to deliver power to as many data center projects as developers had expected.

Other markets are stressed as well. Atlanta, a data center growth market since the onset of the pandemic, is now facing the headwind of power limits, among others, according to participants at Bisnow’s DICE Southeast event in Atlanta in March.

Ganzi said his company has over 2 gigawatts of data center capacity under construction at $10M per megawatt, representing over $20B in capital expenditures over the next few years. DigitalBridge already has the power lined up for that capacity.

Getting the necessary power for future growth is going to be the challenge, he said, with another 5 GW in the pipeline for the company.

“To turn that pipeline into bookings, you've got to be able to deliver the power, power density at scale,” Ganzi said.

Dealing with the problem will be no simple matter, but part of the answer will be the location of future data centers closer to sources of power, especially renewable sources.

“We're going to have to get more creative,” Ganzi said. “We try to colocate those opportunities closer to renewable energy, and we try to create energy independence or grid independence.”