Chamath Palihapitiya Weighs In On Meta's AI Ambitions As Energy Bottlenecks Emerge As The True Limiter

Benzinga
2025.07.31 08:10
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Venture capitalist Chamath Palihapitiya emphasized that energy constraints are the main barrier to AI expansion, particularly for Meta Platforms Inc., which is facing infrastructure bottlenecks despite significant capital expenditures. He advocates for solar energy as a solution. Meta CFO Susan Li indicated the company may seek external financing for AI infrastructure as capital expenditures approach $100 billion. Industry-wide, companies are struggling with equipment constraints, and Goldman Sachs projects a 50% increase in global data center demand by 2027, with AI workloads significantly contributing to this growth.

Venture capitalist Chamath Palihapitiya highlighted energy constraints as the primary barrier to artificial intelligence expansion, responding to concerns about Meta Platforms Inc. META facing infrastructure bottlenecks despite massive capital expenditure plans.

Energy Emerges as AI’s Greatest Challenge

Palihapitiya wrote on X Wednesday that “Energy is the big bottle neck for AI,” outlining systemic constraints facing the industry. The venture capitalist detailed how physical and software AI require fundamental recipe changes beyond ingredient modifications.

“We need infinite and marginally costless energy,” Palihapitiya stated, emphasizing solar plus storage as the only viable near-term solution given 12-17 month deployment timelines.

Meta’s Infrastructure Financing Strategy

Meta CFO Susan Li revealed the company may seek external financing for 2026 AI infrastructure as capital expenditures approach $100 billion. During the second quarter of 2025 earnings, Li said Meta is “exploring ways to work with financial partners to co-develop data centers.”

The company posted $47.52 billion in the second-quarter revenue, beating analyst expectations of $44.58 billion. Capital expenditures reached $17.01 billion with full-year guidance of $66-72 billion.

Industry-Wide Infrastructure Race Intensifies

New Era Funds Chief Investment Officer Rihard Jarc highlighted that even with $100-150 billion budgets, companies cannot spend due to equipment constraints. “Schneider Electric is completely booked until 2030,” Jarc wrote, highlighting supply chain bottlenecks.

Microsoft Corp. MSFT projected $30 billion in first-quarter capex, while Alphabet Inc. GOOG GOOGL raised 2025 spending to $85 billion.

Power Demand Projections Signal Crisis

Goldman Sachs projects global data center demand growing 50% by 2027, from 62 GW to 92 GW. AI workloads will account for 28% of usage by then.

By 2030, data center power demand could climb 165%, making the sector among the world’s top 10 electricity consumers.

  • Google Plans $6 Billion Data Center In India, Its Largest In Asia, With Massive Renewable Energy Investment: Report

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