Microsoft CEO Satya Nadella has said the company has AI GPUs sitting idle because it doesn’t have enough power to install them.

In an interview on the Bg2 Pod, where he was answering questions alongside OpenAI CEO Sam Altman, Nadella said that the biggest issue facing the AI industry was not an excess of compute, but the lack of power to support AI data center deployments.

“The biggest issue we are now having is not a compute glut, but it’s power – it’s sort of the ability to get the builds done fast enough close to power,” Nadella said. “So, if you can’t do that, you may actually have a bunch of chips sitting in inventory that I can’t plug in. In fact, that is my problem today. It’s not a supply issue of chips; it’s actually the fact that I don’t have warm shells to plug into.”

His comments echo those made by Microsoft’s CFO Amy Hood on the company’s Q1 2026 earnings call last week, where she told analysts that access to compute hardware has not been a constraint for the hyperscaler, but rather that Microsoft has been short of space or power.

“We are, and have been, short now for many quarters. I thought we were going to catch up. We are not. Demand is increasing,” she said.

In Q1 2026, Microsoft spent $11.1 billion leasing data center space, with the company having stood up around 2GW of data center capacity in 2025 alone, bringing its total number of facilities to more than 400.

A report from TD Cowen last month said that US data center capacity leased by hyperscalers in Q3 2025 had exceeded the total capacity leased in 2024. While most of the capacity was driven by Oracle and OpenAI, the report noted that there was also a significant increase in activity from Google, Meta, Microsoft, Amazon, and Anthropic.

A separate report from S&P Global, also published last month, stated that data centers across the US will require 22 percent more grid-based power by the end of 2025 and three times as much grid-based power by 2030, compared to 2024.