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The AI constraint in 2026 is not model quality. It is grid capacity.
PJM just printed an 833% jump in capacity prices for Virginia. That state now sends about 40% of its electricity to data centers and imports more power than California. Dublin is consuming close to 80% of Ireland’s national grid. Frankfurt is at 42% of regional supply.
The IEA thinks data center demand will roughly double again by 2030, while half of US projects under development are clustered in places that are already straining the grid.
We are getting better at squeezing joules per token and AI keeps getting more efficient on a per-task basis. But the geography of where we run it is not changing. And that geography is the constraint nobody can optimize away.