The AI Buildout Has a Physical Speed Limit

About this episode

Most of the AI timeline debate happens in software. Benchmark scores, model releases, the shape of the capability curve. Jon Billow watches a different number for a living: lead times.

Billow is on the leadership team at BNS, a firm that manufactures and installs electrical and communication infrastructure. The same critical power equipment his teams put into data centers also goes onto Navy and Coast Guard ships, more than 150 of them. He emailed John Sherman because he thinks the people forecasting AI’s arrival are missing what he sees on the construction side every week. The buildout can only move as fast as its slowest part, and right now almost every part is backed up for years.

That email is what got him on the show. Here is the heart of what he laid out.

The constraint nobody prices in

To bring a large data center online, Billow says, a long list of things has to land at the same time: permitting, grid interconnect, critical power, cooling, and the compute itself. Miss one and the whole project waits. And nearly every item on that list carries a backlog measured in many months, sometimes years.

The pinch point he keeps returning to is critical power equipment. According to Billow, the orders all funnel back to roughly five manufacturers, Eaton, ABB, Schneider, GE Vernova among them, and all of them are slammed. He notes that even the US government is having a hard time getting its allocation for ship programs, because it is standing in the same line as every hyperscaler. On top of that, more municipalities are now requiring data centers to bring their own behind-the-meter power generation, which adds another category of equipment backlog and a skill most operators have never needed before. Hooking up to the grid is one thing. Building gas turbines and finding electricians who can parallel generators is another, and the skilled trades are already stretched thin.

A factor of five to seven

Sherman pushed him to put a number on the gap. If a company says a project lands in a year, how far off is that really?

Billow’s read: the US has roughly 50 gigawatts of total data center capacity today, with about a quarter of it allocated to AI. Around five gigawatts are under active construction and another seven to twelve sit in backlog. Set that against the order-of-magnitude jumps the labs are talking about and his estimate is blunt. “If I was to be a betting man I would say it’s in the order of five to seven years.” Whatever timeline you have been handed, in other words, multiply it.

The tells from inside the labs

He pointed to two recent signals that the infrastructure is already the limiting factor. OpenAI walking back a large commitment tied to its Sora video product, which Billow reads as a company looking at finite compute and deciding where to spend it. And Anthropic delaying a model, which he attributes partly to security concerns and partly to the reality of constrained compute ca