Reuters reports that surging electricity demand from AI data centers is worsening shortages of high-voltage transformers.
Delivery times for this critical equipment now stretch to multiple years. This represents a significant increase from the one-year wait times recorded in 2020-2021.
The supply strain creates a major bottleneck for utility companies and developers building infrastructure for the AI boom. These delays threaten the growth of the utilities sector and the performance of ETFs like XLU and IFRA.
Rising costs and extended timelines may inflate capital expenditures and cap sector growth rates. Federal regulators are now exploring new protocols to expedite grid connections for large energy users.