New research by Marex and the University of Oxford’s Smith School finds a multi-year gap between announced data centre capacity and what’s actually being built, with significant implications for power prices, commodity demand, and market timing.
Key findings
- The delivery gap is structural, not temporary. Bottlenecks across grid connection, equipment supply and permitting mean the buildout will be lumpy and delayed, with wait times ranging from 2–3 years in favourable regions to 7+ years in constrained ones.
- Energy markets face volatility, not a smooth ramp. Data centres are not yet moving average wholesale power prices, but they are intensifying local price spikes and driving a shift to off-grid, self-supplied generation, creating a “shadow” gas demand invisible to standard utility reporting.
- Commodity markets may be front-running reality. Copper, transformer steel, and high-voltage equipment are pricing what has been announced, not what will actually be delivered, raising the risk of near-term overpricing and eventual correction.
Media and markets are expecting a rapid, exponential ramp-up of AI infrastructure. The evidence tells a different story: a rollout that is delayed, lumpy, and constrained by physical realities.
Hyperscale campuses face multi-year setbacks due to slow permitting, lengthy grid interconnection queues, equipment shortages, and labour bottlenecks. A significant share of announced capacity is inflated or postponed —”bragawatts,” not real assets.
These execution challenges are reshaping energy markets. In some regions, large data centres are straining grids and raising local power costs and volatility (although average wholesale prices remain mostly driven by traditional factors like fuel costs and weather). To cope, operators are increasingly turning to BYOG (‘Bring Your Own Generation’) — on-site gas turbines, fuel cells, and battery systems. By 2028, off-grid generation for data centres could account for a substantial uptick in natural gas usage not captured in official power sector statistics.
Commodity markets have responded to lofty announcements with rising prices and investments. But the timing of demand is misaligned, raising the risk that the “announcement curve” diverges from a much slower “delivery curve.”
Economic fundamentals are also under scrutiny. At the corporate level, individual hyperscalers are planning $100-$200 billion each in annual data centre spending. If enterprise AI adoption does not scale as expected, the result could be stranded assets or sharply lower utilization.
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About the white paper
The views expressed in this white paper represent those of the authors and do not necessarily represent those of the Oxford Smith School or any other institution or funder. The paper is intended to promote discussion and to provide public access to results emerging from our research. It may have been submitted for publication in academic journals. It has been reviewed by at least one internal referee before publication.
This report forms part of an ongoing research programme on the sustainable future of capital intensive industries and commodities funded by Marex.
About the Smith School of Enterprise and the Environment
The Smith School of Enterprise and the Environment at the University of Oxford equips enterprise to achieve net zero emissions and the sustainable development goals, through world-leading research, teaching and partnerships. Find out more here www.smithschool.ox.ac.uk.
About Marex
Marex Group pie (NASDAQ: MRX) provides market access, infrastructure services and essential liquidity to clients across global commodity and financial markets. The Group provides comprehensive breadth and depth of coverage across four services: Clearing, Agency and Execution, Market Making and Hedging and Investment Solutions. It has a leading franchise in many major metals, energy and agricultural products, with access to more than 60 exchanges. Marex has over 3,400 active clients, including some of the largest commodity producers, consumers and traders, banks, hedge funds and asset managers. With more than 50 offices worldwide, the Group has over 3000 employees across Europe, Asia and the Americas. For more information visit www.marex.com.
