Every AI rack loses 200 watts to physics before a single computation even begins, power that never reaches the chip and instead disappears as heat. In Virginia, the grid queue now stretches seven years, turning power from a cost into a hard constraint, and by 2027 an estimated 40% of data centers are expected to hit power walls before demand slows. VICR stock surged 285% in 2025 because Vicor eliminated that loss by attacking the problem everyone else accepted. Vertical power delivery moved power to the point of load, cut resistance by 50X, reduced heat, and unlocked more usable compute per watt. The watt problem did not go away. It became the moat.
The Grid Cannot Keep Up: Why 134 Gigawatts Are Stuck
Data centers are racing to build 134 gigawatts of new capacity. But $162 billion in projects are blocked or delayed. Not by permits. Not by capital. But by power. PJM Interconnection, serving 65 million people across 13 states, forecasts a six gigawatt shortfall against reliability requirements in 2027. Building a gas turbine takes six years. Solar takes five. Nuclear takes a decade. AI demand doubles every two years. The math does not work.
The 200 Watt Tax: How Physics Blocks Scale
Traditional power delivery wastes 200 watts per rack fighting physics. Current flows horizontally across PCBs, losing energy as heat over distance. At 48 volts, a one megawatt rack needs 450 pounds of copper. At 12,500 amps, the cables overheat. Before the servers even compute, the power path fails. This is not a software problem. It is an electrical one. The industry assumed the answer was more power plants. They missed the efficiency gap hiding inside every rack. When you cannot add megawatts, the only path forward is eliminating the watts you waste.
Vertical Power Delivery: The 50X Physics Breakthrough
Vicor attacked the waste at its source. Instead of pushing current horizontally across the board, they deliver it vertically, directly beneath the processor. Shorter distance. Lower resistance. Less heat. Less waste. That cuts the path electricity travels by 95% and reduces resistance by 50X. The result is 100 watts saved per accelerator module. Across a 64 module rack, that is 3,200 watts recovered. That adds up fast. Across millions of modules globally by 2027, Vicor estimates terawatts of savings, billions in electricity costs, and millions of tons of carbon avoided annually.
The Perimeter Vacation: Unlocking the Last Inch
The most interesting thing about Vicor is not that it saves electricity. It is that it reclaims physical space on the most valuable real estate in the world: the area immediately surrounding the processor. Traditional lateral power delivery is a space hog. To feed 1,000 amps to a modern GPU, you have to surround the chip with a ring of bulky voltage regulators and copper traces. This creates a beachfront bottleneck. The chip needs to talk to memory and networks at impossible speeds, but the power components are blocking the lanes. Vicor moved the plumbing to the basement. By delivering power vertically, they vacate 100% of the processor perimeter. That clears the way for High Bandwidth Memory and Co-Packaged Optics to sit closer to the silicon. The result is not just more efficient power. It is the physical space required for terabit data speeds. Vicor did not just build a better hose for electricity. They unlocked the last inch.
The IP Fortress: Why Competitors Cannot Catch Up
Vicor's moat is not just technology. It is legal. Competitors cannot copy it. The ITC issued exclusion orders banning infringing power modules from import. They must pay for it. Settlements and licenses are expected to add $300 million in revenue through 2026. Licensing alone hit a $90 million annual run rate, growing at 50% per year. Management assumes every major OEM and hyperscaler in the AI space will require a Vicor license. The question is not whether they pay. It is when.
AI's future is not more megawatts. It is more useful watts. Not faster chips. Smarter power. The data centers that scale will be the ones that stop wasting the power they already have. Vicor did not build a better power plant. They built a better path from the grid to the processor. The companies that win the intelligence age will be the ones who make every electron count.