Surge in North American Data Center Pipeline; BTM Power Becomes Mainstream Trend
AI summary card
Surge in North American Data Center Pipeline; BTM Power Becomes Mainstream Trend
North American data center project pipeline increased by 29 GW to 324 GW in May, driven primarily by developers and crypto miners; a significant rise in Behind-The-Meter (BTM) power generation benefits electrical equipment manufacturers and miner companies with power resources.
- Total project pipeline reaches 324 GW, increasing by 29 GW month-over-month, driven mainly by real estate developers (22 GW) and crypto miners (6 GW).
- Construction capacity increases to 63 GW, with Meta and Amazon accounting for over 90% of the new additions from hyperscale cloud providers.
- Behind-The-Meter (BTM) power pipeline surges to 129 GW, representing nearly 50% of new pipelines, benefiting CAT, CMI, and electrical firms such as ETN and HUBB.
- Stranded capacity due to local opposition (NIMBY) rises to 34 GW, or 11% of the total pipeline, but growth rates are beginning to stabilize.
- Crypto miners have contracted 6 GW of power for AI-related clients, accounting for 20% of their pipeline capacity, giving them an advantage in solving 'time-to-compute' issues.
Report interpretation
Overview
This report updates Bernstein's North American data center capacity tracking series, providing a detailed analysis of the project pipeline, construction progress, stranded capacity, and Behind-The-Meter (BTM) power trends as of May 2026. The core conclusion indicates strong growth in the data center project pipeline, with a monthly increase of 29 GW to 324 GW, primarily driven by non-traditional participants (real estate developers and crypto miners). Simultaneously, to address grid connection bottlenecks, the BTM power model is accelerating its adoption, becoming a structural change in the industry. The report maintains a positive outlook on electrical equipment, select crypto miners, and hyperscale cloud providers.
Core views
Pipeline and Construction Dynamics: In May, the total data center project pipeline reached 324 GW, a 10% quarter-over-quarter increase (+29 GW). Growth came mainly from real estate developers (contributing 22 GW, e.g., O’Leary Ventures and Carlyle Group) and crypto miners (contributing 6 GW, e.g., Core Scientific, Riot, and TeraWulf). In contrast, the pipeline capacity for hyperscalers saw a slight decline this month. Regarding construction capacity, May saw an increase of 4.4 GW to 63 GW, with hyperscalers, developers, and neoclouds contributing approximately 80% of the new additions; Meta and Amazon were the primary drivers. Geographically, Texas and Utah are hotspots for new pipeline additions. Behind-The-Meter (BTM) Power Acceleration: Due to difficulties in grid connections, the BTM power model is rising rapidly. BTM project pipelines grew 12% quarter-over-quarter to 129 GW and 48% year-to-date. Currently, only 4% of installed data centers use BTM, but this proportion reaches 25% among projects under construction and as high as 40% in the pipeline. Nearly 50% of new pipelines added in May were BTM projects. This trend directly benefits large engine manufacturers (e.g., Caterpillar plans to triple large engine production capacity, Cummins entering the prime power market) and electrical equipment suppliers (e.g., Eaton, Hubbell), as on-site generation projects spend approximately 30% more on distribution equipment compared to grid-tied-only projects. Stranded Capacity and Regulatory Risks: Affected by local community opposition (NIMBYism), stranded capacity (cancelled, delayed, or unapproved) rose to 34 GW, accounting for 11% of the total pipeline, up from 7-9% last summer, though recent growth rates are stabilizing. Currently, 19 states are restricting or considering restrictions on new data center construction. Segment Views: Crypto miners, leveraging their existing 30 GW power pipeline and operational capabilities, can effectively address the 'time urgency' of AI computing; they have already contracted 6 GW of power for hyperscale cloud providers and AI chip manufacturers over the past two years. The total addressable market (TAM) for electrical equipment is huge, estimated at $4.4 trillion for Quanta Services and $1 trillion for Vertiv. The consensus expectation for hyperscale cloud provider capital expenditure in 2026 is approximately $640 billion, representing a 78% year-over-year increase.
Analysis framework
Institutions adopt a bottom-up data tracking approach, monitoring changes in capacity across North American data centers segmented by development stage, operator type, and geography to derive industry sentiment. The analytical logic revolves around 'supply and demand bottlenecks': first identifying the sources of pipeline growth (who is investing), then focusing on the actual implementation of construction progress (capacity under construction), next analyzing constraints (stranded capacity/NIMBY), and finally focusing on technical solutions to bottlenecks (BTM power) and the resulting investment opportunities in the supply chain (electrical equipment, engines, miners with power resources). This methodology emphasizes the transmission from macro-capacity data to micro-enterprise benefit logic.
Methodology notes
Supply and Demand Framework
The report evaluates industry balance by analyzing the supply side of data centers (pipeline, under construction, stranded capacity) and the demand side (computing power needs from hyperscalers, AI, and cryptocurrency), paying special attention to how grid bottlenecks alter the supply structure (e.g., shifting to BTM power).
Upstream/Midstream/Downstream Supply Chain Transmission
The report illustrates the logic of transmission from the investment behavior of data center operators (downstream) to upstream entities like electrical equipment and engine manufacturers (upstream), for example, how the BTM power trend specifically benefits Eaton and Caterpillar.
TAM (Total Addressable Market) Estimation
Based on current pipeline capacity and company-disclosed value opportunities per megawatt ($/MW), the report estimates the Total Addressable Market for various electrical equipment companies, serving as a quantitative basis for long-term growth space.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Eaton (ETN)Beneficiary: BTM power trend increases demand for distribution equipment
- Strengths
- Benefits from higher electrical equipment expenditure on on-site generation projects
- Comparison
- Along with Hubbell, a leader in electrical equipment, rated Outperform
- Hubbell (HUBB)Beneficiary: BTM power trend increases demand for distribution equipment
- Strengths
- Benefits from higher electrical equipment expenditure on on-site generation projects
- Comparison
- Along with Eaton, a leader in electrical equipment, rated Outperform
- Core Scientific (CORZ)Beneficiary: Possesses power resources available for lease to AI clients
- Strengths
- Contributed the majority of the growth in the crypto miner pipeline (2.3 GW)
- Comparison
- Rated Outperform compared to other miners
- TeraWulf (WULF)Beneficiary: Possesses power resources available for lease to AI clients
- Strengths
- Contributed the majority of the growth in the crypto miner pipeline (1.2 GW)
- Comparison
- Rated Outperform, target price $36
- Meta Platforms (META)Beneficiary: One of the main drivers of capacity under construction
- Strengths
- Accounted for the majority of new construction capacity additions from hyperscalers (638 MW)
- Comparison
- Rated Outperform, target price $850
- Caterpillar (CAT)Beneficiary: BTM power increases demand for large engines
- Strengths
- Plans to triple large engine production capacity to meet demand
- Weaknesses
- Rated Neutral (Market-Perform)
- Comparison
- Compared to Cummins, CAT focuses more on large engines
Key data
- Total Project Pipeline324 GWIncrease of 29 GW month-over-month, 10% growth
- Capacity Under Construction63 GWIncrease of 4.4 GW month-over-month
- Stranded Capacity34 GWAccounting for 11% of total pipeline, increase of 1.9 GW month-over-month
- BTM Power Pipeline129 GWGrowth of 12% month-over-month, accounting for nearly 50% of new pipeline
- Hyperscale Cloud 2026 Capex Consensus~$640 BillionYear-over-year growth of 78%
- Crypto Miner Contracted Power6 GWAccounting for 20% of their 30 GW pipeline, contract value exceeding $110 billion
Impact & implications
The report argues that the electrification trend in the data center industry has strong support in both the short and long term. For electrical equipment companies (such as Eaton, Hubbell, Vertiv), healthy order backlogs and high demand imply years of visible growth. For crypto miners, their held power resources make them important participants in AI infrastructure, allowing them to generate additional revenue through power leasing or providing 'warm shell' services. For hyperscale cloud providers, although capital expenditure increases significantly, their capacity expansion is gradually matching cloud/AI revenue growth through leasing and BTM models. Geopolitically, data center construction is shifting towards inland areas (such as Utah and Texas) to avoid regulatory and grid restrictions in coastal regions.
Risks
- Risk of projects being stranded or delayed due to local community opposition (NIMBY)
- Grid connection bottlenecks may lead to construction progress falling short of expectations
- Changes in regulatory policies, with 19 states currently considering restrictions on data center construction
What to watch
- Changes in the proportion of BTM power in the project pipeline
- Actual execution of capital expenditures by hyperscale cloud providers
- Scale of power lease contracts signed between crypto miners and AI clients
- Regulatory policy trends regarding data center construction in various states