Cable Capacity Becomes New Bottleneck for AI Data Centers: Nexans CFO Says a New Line Takes Three Years

What happened

In an Oct 22 interview with Reuters, Nexans CFO Vincent Piquet described cable capacity as an emerging new bottleneck for AI data center construction: building a new cross-linked polyethylene (XLPE) cable production line — known in the industry as a CV line — takes about three years, limiting how quickly suppliers can respond to demand.

Piquet said: "Things can't move quickly and the people building these data centres are in a hurry." Data centers require large amounts of low- and medium-voltage cable to connect power infrastructure, with larger facilities consuming proportionately more medium-voltage cable.

Strain on power infrastructure is already delaying some projects. Reuters reported that in September, Oracle issued a force majeure notice to a Blue Owl unit developing a large data center in New Mexico, citing potential difficulties in securing sufficient power for the site. Piquet added that while grid constraints are slowing some projects, they are also supporting demand for Nexans' products, allowing the company to be more selective when allocating capacity.

Key facts

1. Three-year cycle: : building a new XLPE cable line (a CV line) takes about three years, so suppliers cannot expand capacity quickly
2. Longer contracts: : French distribution network operator Enedis has moved cable procurement from annual agreements to six-to-seven-year contracts to secure supply
3. Europe vs. the US: : Europe generally faces fewer grid-connection challenges than the US and benefits from stronger electricity networks in some northern countries, though lengthy regulatory processes are delaying certain projects
4. Demand outlook: : Piquet said he does not expect AI-linked demand to slow, though Europe's data-center expansion will likely be less pronounced than in the US, where private investment capacity is smaller and public funding plays a larger role