AI Is Short of Capacity, Not Demand

Talk of an AI correction usually starts with a change in investor sentiment. Coupled with rocky macroeconomic headwinds, this impacts company valuations, thereby straining financing for AI-specific buildouts. In short, it affects supply. IDC tracks markets, not balance sheets, so we start with the demand side, and it is strong. 95% of enterprises already run AI agents in production with inferencing-specific actions, and IDC expects 2.5 billion agents by 2030. The constraint is capacity. Power, memory, packaging, and site buildouts have not kept pace with demand for AI adoption; as a result, supply-side constraints will set the pace of growth through 2027 and into 2028. The IDC view is that this is not a demand bubble. A bubble is oversupply versus demand, and today, memory, power, and packaging are all in short supply. Enterprises are also spending faster on AI initiatives than planned. In the past 12 months, 67% exceeded their agent budgets, and 24% overshot by 25% or more, according to the IDC FERS survey. We view these overruns as a demand signal. Even though…