The best investment for AI may be in electronic technology

Venture capitalists have placed huge bets on AI startups, investing more than half a trillion dollars in this sector over the past five years.

But today, the smartest AI money can be powerful, according to to the Sightline Climate report. Researchers found that up to 50% of announced data center projects could be delayed. One of the main reasons is to gain power.

Of the 190 gigawatts of data space the company is tracking, only 5 gigawatts are under construction. About 6 gigawatts of data center projects in Sightline’s database came online last year. An even larger number – about 36% – saw their time down in 2025. The delay could go down and affect large enterprises and other companies that use AI in their business.

That demand squeeze is an opportunity for investors. That is why.

Major technology companies such as Google and Meta have dedicated a large portion of their websites to solar, wind, and nuclear power projects. These companies are also supporting emerging technologies like 100-hour battery for Form Energy through direct business and working with organizations to improve their implementation.

Many startups are pursuing technologies that can solve the energy crisis. For example, Amperesand, DG Matrix, and Heron Power are producing new energy conversion technologieswhile companies like Camus, GridBeyond, and Texture are construction software which can conduct electrons.

Energy remains one of the biggest constraints in the data center, a shortage that won’t change anytime soon. AI is expected to drive data center efficiency up to 175% by 2030, according to at Goldman Sachs.

This power shortage is unprecedented in modern times, and has caused electricity prices to rise across the country. This has forced many technology companies to look for other ways to process their data. (The Trump administration, in view of the looming political crisis, is promoting technology companies to build their own power source, pay higher rates, or both. Many had already made arrangements to do so, of course.)

Other grid options

Amazon, Google, Oracle, and other major technology companies have been working to reduce reliance on this group. Several data centers are being planned using on-site power or a hybrid solution that combines on-site power with grid connection.

Big data centers are leading the way. Less than one-third of the projects that have found a source of electricity will use it on-site or hybrid; together they represent 44% of the total energy.

The change has been driven in part by the shortage of power generation equipment – ie gas generators – it’s the old team. This has opened the way for other energy production.

Google’s recent move to build a new data center in Minnesota shows one way to deal with this problem. The company will combine wind and solar with a large battery 30 gigawatt hours from Form Energy. Google has also partnered with Xcel Energy to develop a new strategy that it says will help encourage the adoption of new technologies in the planning process.

The Form Energy battery is not the only example. On-grid batteries are poised to dominate the electricity market. By the end of this year, the U.S. should have about 65 percent of battery storage capacity, according to at the US Energy Information Administration. Like many of its peers, Form Energy is looking to turn a profit raising $500 million in advance of the final IPO.

Low technology

Empowerment is only part of the story. When power hits the grid or data center, it must be monitored, a task that often falls to the humble transformer.

Most transformers today use large coils of copper wire, a technology that has been around for about 140 years. It’s reliable, but it’s becoming more and more common as data center power needs to rise. By the time server racks hit 1 megawatt in electrical power, the electronics needed to run them will take up twice as much space as the rack itself, one analyst told TechCrunch.

That’s why investors have been reverse flow solid-state transformer basics in the near future, who hope that silicon-based electronic devices can replace the old metal and copper technology. It’s more expensive than existing transformers, but it’s flexible enough to switch multiple devices in a data center, which should make it competitive.

Overall, the amount of investment in the battery and transformer industry has been smaller than the blockbusters we’ve seen in the AI ​​industry.

That’s not a bad thing – these cycles are easy for investors. Additionally, as the world turns on everything from transportation to the rich industry, the demand for energy is growing, giving investors a hedge against the AI ​​explosion. Perhaps the best investment in AI is not in AI at all.