Exponential View author Azeem Azhar pushes back on McKinsey: what data centers really compete on is how fast they get power, not the power price.

(October 31)

Concept illustration on a mustard background: a large board on a stand is split into two panels, each showing a white building lettered DATA CENTER with server racks inside, a utility pole with a wall outlet to its right, and a tag hanging from the roof's left corner; on the left the tag reads POWER PRICE, with an upward arrow pointing to it from a sign lettered MCKINSEY, and a thin white cord's plug lies on the ground near the pole, while on the right the tag is blank and a thick red cord's plug points rightward toward the outlet with motion lines trailing behind it. A dark silhouette of a person in a suit at the lower right points at the red plug, and a large black opening quotation mark sits in the top-right corner. Printed on the image: Azhar: getting power fast beats power price.

Our inference: if Azhar is right, developers waiting on Texas's pause on new state data-center permits lose more to the delay than they would save on cheaper electricity. Azeem Azhar, the analyst who writes the tech newsletter Exponential View, was replying on X on October 31 to a McKinsey Global Institute post promoting its own report. McKinsey says attention is on chips, but electricity cost decides data-center economics: the same data center pays US$200 per megawatt-hour in China and US$380 in London (McKinsey Global Institute, 2026-10-31). Azhar replied that power is a small share of total data-center cost, with financing and depreciation the big items; what matters is how fast a site gets power, and the gain from fast energization far outweighs a higher power price (Azeem Azhar, 2026-10-31). Neither side attached cost-structure figures, and McKinsey doesn't say how the US$200 and US$380 were calculated. How we checked →

Source and checks

This item ran in the brief of Nov 5, 2026, alongside 13 other items. How we checked it, the quote checks and what was still missing that day are on that issue's How we checked page.

Cite this item

SecondSource (2026). "Exponential View author Azeem Azhar pushes back on McKinsey: what data centers really compete on is how fast they get power, not the power price.." https://secondsource.io/en/expert/2026-11-05-1/. Accessed access date.