ERCOT's 438,595 MW, Big Tech's $800B: The Power-and-Cooling Bottleneck

Investment Implications

ERCOT's 438,595 MW Queue Pulls Big Tech Capex Toward Power and Cooling

Large interconnection requests at ERCOT, the Texas grid operator, jumped from 24 in the prior year to 519 over the past two years, pushing projected power demand to 438,595 megawatts — roughly a third of total US generation — with 90% of it earmarked for data centers. With the USD 800 billion that Morgan Stanley estimates US Big Tech will spend on capex in 2026 heading straight into the generation-and-cooling bottleneck, investors should watch the capital being pulled toward the power and water supply side first, rather than the data centers themselves.

ERCOT, the Texas grid operator, fielded 519 large interconnection requests over the past two years — a sharp break from 24 the year before. Those projects carry projected power demand of 438,595 megawatts, about a third of all US generation, and 90% of it is for data centers. Morgan Stanley estimates US Big Tech will spend more than USD 800 billion on capex in 2026 alone, a sum on par with total 2025 capital spending by every non-tech company in the S&P 500.

The reason this capital is unlikely to flow into data-center buildings alone is that the bottleneck sits on the generation-and-cooling side. A June report from the United Nations University Institute for Water, Environment and Health (UNU-INWEH) found that when an AI model is in use, the continuous operation driven by everyday user prompts accounts for 80% of total energy consumption. By one estimate, data centers could account for 3% to 9% of all Texas water use by 2040, up from less than 1% today. The EIA likewise projects US electricity consumption rising from 4.097 trillion kWh in 2024 to 4.283 trillion kWh in 2026, headed for an all-time high. Just early this month, the same Big Tech capex read as a supply-side windfall for South Korean power-equipment and memory orders; today the interconnection queue and the water footprint reveal the infrastructure bottleneck itself as a demand-side signal pulling capital in.

The same pressure is building in Korea, too, as Naver's plan with Nvidia shows: a Sejong data center starting at 55 megawatts in the first half of 2027 and scaling to gigawatt class abroad.

Here's how today's facts sort out across what's already in asset prices and what isn't.

• Already priced in — Data-center construction and AI-chip demand are largely pre-reflected in Big Tech's $800B capex.
• Newly coming into view — The power-and-cooling bottleneck (ERCOT's 438,595 MW interconnection queue, about a third of all US generation) is emerging as the destination for capital.
• Still underpriced — Water-supply constraints (3-9% of Texas water use by 2040) remain the last to make it into prices.

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Key Developments

Technology

ERCOT's Large-Project Power Demand Hits 438,595 MW, 90% for Data Centers

Projected power demand from large projects filed with ERCOT reaches 438,595 megawatts, about a third of total US generation. Ninety percent of it is for data centers, most targeting a start of operations by 2030. (Source: Texas Tribune)

Naver and Nvidia to Launch Sejong Data Center at 55 MW in H1 2027

South Korea's Naver has teamed up with Nvidia to build large-scale global AI infrastructure. It plans to launch a Sejong data center at 55 megawatts in the first half of 2027 and gradually scale to gigawatt class overseas. (Source: Yonhap News)

Uber Partners With 30-Plus Companies Worldwide on Autonomous Driving

Uber has made autonomous driving a strategic priority, partnering with more than 30 companies worldwide on self-driving freight, delivery, and taxi services. Millions of autonomous trips have already been completed. (Source: Economic Times India)

GM Pursues $900M Push for LMR Batteries and a New Cell Development Center

General Motors (GM) is pursuing a USD 900 million effort centered on LMR (lithium manganese-rich) batteries and a new battery-cell development center to cut costs for its next-generation EVs. (Source: TechCrunch)

Avride Completes 60,000 Uber Rides in Dallas

Avride, an autonomous-driving startup, has completed 60,000 rides for Uber passengers in Dallas since its December launch. (Source: TechCrunch)

South Korea Asks Nvidia for Smooth Supply of Some 260,000 Advanced Chips

South Korea's science minister asked Nvidia to ensure the smooth supply of some 260,000 advanced chips agreed on around APEC, along with support for building an AI factory based on the Vera Rubin platform. (Source: Yonhap News)

Australia: One in Three Households Has Rooftop Solar, 420,000 Batteries Installed

In Australia, one in three households has rooftop solar, and more than 420,000 batteries have been installed in homes. (Source: RenewEconomy)

Economy

Data Centers Could Reach 3-9% of Texas Water Use by 2040

By one estimate, data centers could account for 3% to 9% of all Texas water use by 2040, up from less than 1% today. (Source: Texas Tribune)

OPEC+ Agrees to Raise Output Target by 188,000 b/d From July

OPEC+ agreed to raise its production target by 188,000 barrels per day starting in July. It is the fourth output increase approved since the closure of the Strait of Hormuz. (Source: CNBC)

KAIST Spawns 574 Companies in Five Years, With a 92% Five-Year Survival Rate

Over the past five years, 574 companies have been founded out of KAIST, with a five-year survival rate of 92%. (Source: Nikkei Asia)

US Cattle Inventory Falls to 86.2 Million Head, a 74-Year Low

The US cattle inventory has fallen to 86.2 million head, the lowest in 74 years. (Source: Nikkei Asia)

Brent Up 33% and WTI Up 40% Since the Conflict Began

Brent crude has risen 33% since the conflict began about 100 days ago, while WTI has gained 40%. (Source: Economic Times India)

KOSPI Margin Loan Balance Jumps 60% Year-to-Date to KRW 28 Trillion

Margin loan balances on the KOSPI have surged 60% year-to-date, reaching KRW 28 trillion (USD 18 billion) as of June 4. (Source: Nikkei Asia)

Six Funds With Over $1B in AUM Hold About 26% of Early-Stage Capital

According to an analysis by S2G Investments, just six funds with more than USD 1 billion in assets under management accounted for about 26% of new early-stage capital raised in 2021-2025. (Source: Financial Post)

Environment

China Captured Most of $43B in Low-Carbon Funding Over the Past Six Months

According to a Mission Possible Partnership report, China captured most of the low-carbon projects that secured a combined USD 43 billion in funding over the past six months. (Source: OilPrice)

US Low-Carbon Projects Fall From 92 to 72

Across low-carbon energy projects, the US lagged at 72, with the number of funded projects over the past 12 months falling from 92 to 72. (Source: OilPrice)

Politics

Trump Administration Opens New Probe Into 16 Major Trading Partners' Unfair Practices

The Trump administration has opened a new probe into the "unfair trade practices" of 16 major trading partners, including India, China, and Bangladesh. The move seeks to reapply tariff pressure after a US Supreme Court ruling that struck down the existing tariffs as unlawful. (Source: LiveMint)

USTR Proposes Additional 12.5% Tariff on Countries Lacking Forced-Labor Safeguards

The US Trade Representative (USTR) has proposed, under Section 301, an additional 12.5% tariff on goods from countries that have failed to put in place effective safeguards against imports made with forced labor. (Source: GMA Network)

US-Israel War on Iran Hits Day 101 as Air Strikes Are Traded

Monday marked day 101 of the US-Israel war on Iran, with Iran and Israel trading air strikes. (Source: Al Jazeera)

Australia Sets 48% Anti-Dumping Duty on Hollow Steel Sections

Australia's industry minister announced a decision to impose a 48% anti-dumping duty on hollow steel sections from China, Taiwan, Malaysia, and South Korea. The duty also applies to torque tubes used to mount solar modules. (Source: RenewEconomy)

Indian Air Force Orders 180 LCA Mk1A Fighters From HAL

The Indian Air Force (IAF) has ordered 180 LCA Mk1A fighters from Hindustan Aeronautics Limited (HAL) across two batches. HAL currently maintains an annual production capacity of 24 aircraft. (Source: Economic Times India)

India to Invest INR 130 Billion in Great Nicobar Island Airport and Runway

As part of its Great Nicobar Island development program, India plans to invest INR 130 billion in building an airport and runway to be shared by the Indian Navy and civilian users. (Source: Economic Times India)

SIPRI Counts 12,187 Nuclear Warheads Worldwide

The Stockholm International Peace Research Institute (SIPRI) reported that nuclear-armed states hold a combined 12,187 nuclear warheads worldwide, of which about 9,745 are in usable stockpiles. (Source: France 24)

Society

About 70% of US College Students See AI as a Threat to Future Jobs

In a 2025 survey by the Harvard Kennedy School Institute of Politics, about 70% of college students said they view AI as a threat to future jobs. (Source: Euronews)

China's Gaokao Test-Takers at 12.9 Million, Down for a Second Year

China's gaokao college entrance exam drew 12.9 million test-takers this year, declining for a second straight year. (Source: South China Morning Post)