The dramatic growth of AI data centers and their ever-increasing need for energy is creating challenges across the power industry. Despite grid investment worldwide reaching $483 billion in 2025, according to BloombergNEF, the existing power grid can’t keep up with demand.
One area of innovation relates to how to obtain more power from existing infrastructure. According to the US Energy Information Administration (EIA), 5% of generated electricity in the US is lost as part of the transmission and distribution process. In some parts of the world, such losses are much higher.
Microsoft is touting high-temperature superconductors (HTS) as a potentially game-changing technology that can improve energy efficiency by reducing transmission losses. The company is investing in this approach, which promises to allow electricity to flow with zero resistance.
“Microsoft is exploring how this technology could make electrical grids stronger and reduce the impact datacenters have on nearby communities,” said Alistair Speirs, general manager of Global Infrastructure Marketing at Microsoft Azure, in a recent blog post. “Because superconductors take up less space to move large amounts of power, they could help us build cleaner, more compact systems.”
The company is collaborating with superconducting technology vendors and data center system integrators to see if this approach can be translated into real-world, scalable solutions.
Cryogenic cabling vs traditional copper
Transmission and distribution lines traditionally utilize copper and aluminum. Both are good conductors. But electrical current traveling through them encounters resistance at every step, losing efficiency, generating heat, and limiting how much current can be moved.
HTS cables, however, are made of superconducting materials that are cooled to cryogenic temperatures.
Once cooled, the current can move without resistance. This eliminates line losses and heat buildup. It also makes it possible for power to be moved much further than before. Such cables are also smaller and lighter, don’t produce heat, and don’t introduce voltage drops as current travels.
“Data centers can benefit from HTS because they concentrate massive electrical loads in compact footprints,” said Speirs. “Traditional conductors force operators to choose between expanding substations, adding more feeders, reducing deployment densities or curtailing growth.”
Density is everything
The trend in modern data centers is to greatly increase density. Server rack density has exploded by almost two orders of magnitude due to the advent of GPUs from the likes of Nvidia. Instead of needing 20 MW of power, a next-generation AI factory could conceivably consume 2 GW or more (many such centers are under development, but none are operating yet).
Beyond CPUs, GPUs, and servers, every other component must respond with supporting architecture that can move power in much higher volumes and as efficiently as possible. HTS meets these criteria. It boosts electrical density significantly without expanding the physical footprint.
“As our AI systems grow, power is still the biggest limit we face,” said Speirs. “Next-gen superconducting transmission lines deliver an order of magnitude higher capacity than conventional lines at the same voltage level.”
The density argument can also be made in terms of grid footprint in local communities. Instead of ugly overhead lines that might be 70 meters wide, HTS cabling can go underground in a trench that is three meters in width and delivers more power. They can also stabilize the grid by introducing fault-current limiting capabilities.
Finally, the grid and data centers will require less infrastructure to deliver the same amount of power. By deploying HTS, fewer substations will be needed, and the electrical infrastructure can be simplified.
While this all sounds promising, HTS remains little used to date due to cost and the availability of superconducting materials. But Microsoft is putting its money into the technology via a $75 million investment in HTS power delivery firm Veir.
Also read: Power constraints are already delaying projects, and many planned mega data centers may never get built.
