The relentless expansion of artificial intelligence is triggering a fundamental shift in the world’s power infrastructure, with demand for electricity surging to levels that existing grids are ill-equipped to handle. The U.S. Energy Information Administration (EIA) projects that electricity used for commercial computing will increase faster than any other end use in buildings, accounting for an estimated 20% of commercial sector electricity consumption by 2050, up from 8% in 2024.
The challenge isn’t simply generating more power, but delivering it efficiently. According to the EIA, annual transmission and distribution losses in the U.S. Average around 5 percent. This inefficiency, coupled with the concentrated power needs of AI data centers, is driving hyperscalers like Amazon Web Services, Google Cloud, and Microsoft Azure to explore radical solutions.
Microsoft is among those investigating high-temperature superconductors (HTS) as a potential replacement for traditional copper wiring. According to Alastair Speirs, the general manager of global infrastructure at Microsoft, HTS can significantly improve energy efficiency by reducing transmission losses and increasing grid resiliency. “Given that superconductors take up less space to move large amounts of power, they could help us build cleaner, more compact systems,” Speirs wrote in a recent blog post.
Copper wiring, while a good conductor, encounters resistance as electricity flows, generating heat and limiting current. HTS materials, cooled to cryogenic temperatures, largely eliminate this resistance. The resulting cables are smaller, lighter, and don’t suffer the voltage drop associated with copper, making them particularly attractive for the space-constrained environment of AI data centers.
Microsoft has invested $75 million in Veir, a superconducting power technology developer, to advance this technology. Veir’s conductors utilize HTS tape, specifically a ceramic material known as rare-earth barium copper oxide (REBCO), deposited as a thin film on a metal substrate. “The key distinction from copper or aluminum is that, at operating temperature, the superconducting layer carries current with almost no electrical resistance, enabling very high current density in a much more compact form factor,” explains Tim Heidel, Veir’s CEO and co-founder.
Maintaining the cryogenic temperatures required for HTS operation necessitates a robust cooling system. Veir employs a closed-loop liquid nitrogen system, circulating the coolant through the cable length, re-cooling it, and recirculating it. “Liquid nitrogen is a plentiful, low cost, safe material used in numerous critical commercial and industrial applications at enormous scale,” says Heidel. Veir favors external cooling systems to minimize the data center footprint and operational complexity.
While the promise of HTS is significant, the technology isn’t without its challenges. Rare earth materials, cooling loops, and cryogenic temperatures all contribute to higher costs. Heidel acknowledges that HTS is most economically viable where power delivery is constrained by space, weight, voltage drop, and heat. “In those cases, the value shows up at the system level: smaller footprints, reduced resistive losses, and more flexibility in how you route power,” he says. He anticipates that costs will decrease as manufacturing volumes increase and standardization improves.
According to Husam Alissa, Microsoft’s director of systems technology, HTS manufacturing, particularly on the tape side, has matured, improving cost and supply availability. Microsoft’s current focus is on validating and derisking the technology with partners, concentrating on systems design and integration.
The International Energy Agency estimates that electricity use from data centers will more than double by 2030, with AI-optimized facilities quadrupling their consumption. The U.S. Energy Information Administration projects record U.S. Electricity demand by 2026, largely driven by AI infrastructure growth. BloombergNEF forecasts total data-center demand to jump from 35 GW to nearly 80 GW by 2035.
