In Ireland, data centers consume nearly a quarter of the country’s electricity. New grid connections around Dublin were effectively frozen for three years. Under revised rules, new projects must provide generation or storage capacity onsite or nearby. Amsterdam previously imposed a moratorium on new facilities, while Frankfurt regulates their location through zoning.

In July 2026, New York State introduced a moratorium of up to one year on certain environmental permits for new large data centers. State officials said the pause would allow them to assess the facilities’ impact on the power grid and the environment. As of May 2026, data center projects representing nearly 12 GW of potential demand were in the state’s grid interconnection queue.

Should governments restrict data centers when power grids cannot keep pace? I believe they should expand power supply and grid capacity instead.

As co-founder and general partner of Roosh Investment Group, I have been investing in technology companies for over five years. Our portfolio includes AI infrastructure, and energy is now a key focus. This experience has shown me how access to energy infrastructure influences investment decisions. Reliable power is increasingly becoming a decisive factor in a company’s ability to scale and attract capital.

As businesses rely more on AI, control over its models and infrastructure matters more. A foreign provider’s decision to change terms, raise prices, or restrict access could affect entire industries. Domestic computing capacity gives countries more control over the infrastructure their businesses depend on.

Control over AI is becoming a source of economic power

This helps explain the intensity of U.S.–China competition in AI. American companies hold leading positions across the AI stack, from advanced models and chips to major cloud platforms. Washington views the power supply for data center infrastructure as a national security issue.

Beijing is pursuing a state-led strategy. Its “Eastern Data, Western Computing” program directs the development of computing capacity toward western China, where energy and land resources are more readily available. At the same time, the country is expanding power generation at scale. According to the International Energy Agency, China added nearly 500 GW of renewable capacity in 2025—more than 60% of the global increase.

Europe, meanwhile, risks falling further behind. Brussels plans up to seven AI gigafactories and at least a tripling of EU data center capacity within five to seven years. Yet some countries are slowing construction, while European businesses still rely primarily on American cloud providers. Restrictions do not remove demand for AI; they risk pushing investment abroad and reinforcing that dependence.

The bottleneck is local

Data centers’ hunger for power should be understood in the context of wider electricity demand. According to the International Energy Agency, they accounted for only around 70 TWh of the 800 TWh increase in global electricity consumption in 2025. Industry, air conditioning, heat pumps, and electric vehicles contributed far more.

The challenge is rapidly growing demand concentrated in a handful of locations. Power must reach new computing capacity in time.

What is holding up connections?

In the U.S., lead times for large transformers now exceed two years, compared with roughly 50 weeks before the pandemic. Morgan Stanley estimates that U.S. data centers could face a power shortfall of around 49 GW by 2028. Microsoft CEO Satya Nadella has acknowledged that power has become the company’s binding constraint. Some of its GPUs are sitting in inventory with nowhere to plug them in.

Dedicated gas-fired plants offer no quick fix. GE Vernova, Siemens Energy, and Mitsubishi Power produce around two-thirds of the world’s gas turbines, and their factories are booked years ahead. GE Vernova reported 116 GW in gas power equipment orders and slot reservations, while targeting annual turbine output of 20 GW in the third quarter of 2026.

The hardware itself adds another challenge. A server rack once required 7–12 kW. Systems built around NVIDIA’s GB200 consume 120–132 kW per rack. Conventional air cooling is no longer sufficient at that power density, so new facilities must be designed for liquid cooling from the outset.

Tech giants are securing power themselves. Microsoft agreed to buy electricity from the 835 MW Three Mile Island reactor, which is being restarted to serve its needs. Google’s agreement with Kairos Power calls for small modular reactors, with the first expected online by 2030.

Governments cannot rely on corporate initiative alone. They must plan energy and digital infrastructure together: expand grids, accelerate transformer production, streamline connections, and encourage long-term power purchase agreements, generation near data centers, and storage.

How war accelerated distributed generation in Ukraine

Ukraine’s experience shows how a crisis can accelerate the deployment of local generation. War and repeated attacks forced the country to rapidly deploy local power sources where the centralized grid could no longer guarantee a reliable supply.

My experience investing in technology companies has shown me that reliable infrastructure is essential for business growth. In Ukraine, companies have long had to manage energy risks. They need reliable electricity, backup power, and plans for potential outages. This also matters to investors. A company’s ability to operate during power outages affects how they assess its potential for growth.

Ukraine already has around 1.8 GW of distributed gas-fired generation, with more than 500 MW under construction. It is also streamlining grid connection and permitting procedures.

Ukraine’s experience cannot be directly applied to large AI data centers. But it illustrates how making energy resilience a priority can accelerate investment in additional generation and changes to connection procedures, even under extreme conditions.

How to power the data center build-out

Powering new data centers will require coordinated action by governments, grid operators, and businesses. Governments can plan sites for new facilities. Grid operators can reserve capacity for them in advance. Businesses can invest in their own power plants, storage, and cooling, and reduce electricity use during peak hours in exchange for faster grid connections. A combination of grid supply, gas-fired plants, nuclear power, and renewables can help meet demand where no single source is sufficient.

The ability to build and power data centers quickly is likely to become an increasingly important factor in investment decisions. An advantage in the AI race will depend not only on access to models and chips, but also on a country’s ability to expand computing capacity, generation, and grids together. Restricting data center development may temporarily ease grid pressure, but it can also deepen dependence on foreign infrastructure and technology.

Serhiy Tokarev is co-founder and general partner at Roosh, a Ukrainian investment group whose portfolio includes AI infrastructure and energy companies.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.