The Great AI Infrastructure Buildout: Impact on Power and Commodity Markets

This academic paper was produced by the Oxford Smith School of Enterprise and the Environment, a member of IPFA. 

A new white paper from the Oxford Smith School and Marex points to a significant “delivery gap” for planned AI data centres, with up to 50% running behind schedule. A key finding of the paper is that markets appear to be pricing in the announcement curve, not the delivery curve. Commodity and equipment markets (copper, transformers, electrical steel) are responding to lofty buildout claims that may materialise years late or not at all, risking short term overpricing followed by oversupply.

The white paper details how execution challenges are reshaping energy markets by raising local power costs and driving increased natural gas usage. While power grids struggle to catch up, operators are increasingly turning to 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.