The U.S. Federal Communications Commission (FCC) is working on a ruling that will ban the import of Chinese-made optical transceivers, which are widely used in data centers to convert electrical impulse data into light and vice versa. Sources told Reuters that the agency wants to publish the ruling so that it would take effect before the end of the year.

"Transceivers definitely ⁠pose a risk," AI policy expert Divyansh Kaushik of advisory firm Beacon Global Strategies told the publication. "As the data center buildout scales up, you want to make sure the ​data center supply chain is secure from the get-go.” The administration fears that these components could be used to steal data, install malware, or disrupt data center operations in the U.S.

These optical transceivers are crucial for data centers as they require less electrical energy than traditional copper-based wiring and are also much faster. There are several U.S.-based manufacturers of these components, like Lumentum, Coherent, and Apple Optoelectronics, but Reuters said that they do not have the scale and capacity of leading company Innolight, which has cornered 27% of the global market.

This isn’t the first industry-wide ban that the FCC has imposed in recent months. While the U.S. has banned Huawei products from the country since 2019, it recently enforced several other bans that have primarily affected major Chinese or China-connected companies. This includes the ban on foreign-made drones, applied in December 2025, foreign-manufactured routers, enacted last April, and advanced robotic devices that weigh over 4.4 pounds and have a 200-kbps connection, which was announced just last month.

The first ban primarily affected DJI, while the one set in April hit TP-Link badly, even though it has since separated from its Chinese parent company in 2024. While you may not think that consumers will be affected by the Chinese robot ban, the July ruling also affects robot vacuums, with the top brands in the U.S. like iRobot, Roborock, Ecovacs, Dreame, and Xiaomi all being owned by a Chinese entity.

Although the U.S. said that all companies are affected by these bans, it also allows for conditional approvals. For example, Netgear and Amazon were able to secure exemptions for their foreign-made models through October 2027. TP-Link also applied for an additional approval in April but has yet to receive one until now.

It’s been said that the FCC wants to head off these Chinese components before they become more prevalent in U.S.-based AI data centers. This is what happened with Huawei, which was already so entrenched in the U.S. when it was banned that it became an expensive, years-long process to remove and replace all components made by the company from all its systems.

The Chinese embassy in Washington told the publication that it’s urging the United States to “heed the objective and rational voices of the business communities in both countries" and "stop smearing Chinese companies and threatening them with sanctions.” It also warned that it will take “necessary measures in response to any action that causes material harm to its interests.” Beijing has already done this last year, when it banned rare-earth exports to the U.S. in response to Washington’s EDA software ban, causing the White House to backtrack on its decision.

Texas Gov. Greg Abbott (R) just announced a moratorium on all data center approvals through the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) until the agencies have completed an audit of data centers seeking approval to connect to Texas’s electric grid. According to The Texas Tribune, the governor wants to ensure that data center applicants provide the following: tax break information, power use and generation, water use and cooling operations, community impact reduction measures, and facility ownership. Applicants that haven’t submitted these details will not be allowed to connect to the grid.

“Our top priority is to protect Texans’ safety and quality of life,” Gov. Abbott wrote in his statement. “Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first.”

This review reportedly stemmed from several data centers’ failure to comply with a PUCT survey to determine water and power usage. The agency says that it asked 377 data center companies to send the required information, but only 28 have submitted so far.

While this is not a statewide moratorium, it nonetheless affects the progress of many data center projects going through ERCOT approval. More than 1,800 projects are awaiting the go-signal from the regulator to connect to the grid, 90% of which are data centers. The combined demand that these applications will put on the grid is expected to hit 474 gigawatts, which is five times that of the current peak demand that ERCOT has recorded and is much higher than forecasted data center demand by 2035.

This will put a dent in a lot of data center build-outs in Texas, but it still does not affect all projects, unlike the statewide ban that New York imposed. For example, El Paso, Texas, is outside the jurisdiction of ERCOT, so data center developments in the country can still continue unimpeded. Projects that are also bringing their own power are unaffected, as they do not have to connect to the ERCOT grid.

Data center opponents say that this measure isn’t enough, although some agree that this is a step in the right direction. They say that the state legislature needs to pass a law to regulate the industry, which is already the second biggest in the U.S. after Virginia. “Without legislative action, this directive is all hat and no cattle — empty political rhetoric wrapped in meaningless fluff,” Commissioner Sid Miller wrote on the Texas Department of Agriculture’s official Facebook Page. “Texans need laws with teeth, not another press release designed to make it look like something is being done while hyperscale projects continue moving forward.”

State Representative Gina Hinojosa Abbott’s opponent in the gubernatorial race in November 2026 had harsher comments for the governor. “So nice to see another strongly worded letter from Abbott after he proudly made Texas the wild west of data centers. Abbott’s call for a ‘pause’ could be for one day – and no one buys it,” she wrote in a statement. “He’s taken millions from data center CEOs while giving Texans lip service to non-existent restrictions.”

Although the majority of Americans oppose data centers going up in their backyards, several local governments still support similar developments as they believe that these will bring investments and opportunities for their constituents. However, the passionate but peaceful resistance of some people has resulted in their arrests, with Futurism reporting that 37 regular people have been arrested so far this year.

What’s more interesting is the wide demographic diversity of those who have been detained and charged. The two arrests Tom’s Hardware previously reported on included a farmer who went a few seconds over the allotted speaking time during a town hall meeting in Oklahoma discussing an AI data center project and a teacher who was dragged out of a community meeting in Kansas for clapping after a speaker finished giving their statement opposing another similar development. The protesters also crossed ideologies and party lines — the only common thing among them was the fact that they were concerned about the impact of a data center in their community.

The publication also noted that there were 12 other instances where the police were called because of a confrontation between politicians and protesting individuals. One example of this is when police intervened after a Utah senator got physical and slapped the phone out of a reporter’s hand, who was only there to cover the harassment by anti-data center protesters against his business.

“In my opinion, I was kicked out to prove a point that the law is on their side and if people continue to try and express themselves and speak, they will also be intimidated or arrested by law enforcement,” Pablo Payan, a maintenance manager who was arrested in Indiana after he refused to identify himself on the record, told Fox32. “So, I think it was a flex of power.”

Data centers have become a hot topic among the American public recently, especially as there have been widespread reports of these developments causing massive increases in electricity costs, negative impacts on the local water quality, 24/7 noise pollution, among other issues. The federal government has taken steps to reduce some of the impact through its “ratepayer protection pledge,” which includes AI hyperscalers, utility companies, data center operators, and even state governors. However, some experts say that this is just a promise that has no legal bearing, meaning companies necessarily don’t need to follow it.

Even though a few jurisdictions are pushing forward with data center projects despite local opposition, there are also some local and state governments that have paused their development. These include multiple Tennessee counties, Seattle, Washington, which is home to the headquarters of Microsoft and Amazon, and the State of New York. Most of them said they will use the one-year delay to study the effects of data center developments and how to best mitigate against them. One Pennsylvania town even took a different approach by listing 43 specific demands for a proposed data center, which its developer allegedly shot down as “too difficult.”

This is likely what made these protesters emboldened in their fight against data centers — the fact that other communities have successfully lobbied against data center developments means that they can push back, too.

Data centers on land are facing increasing opposition and having a hard time getting off the ground — from power connection issues that can take months or years to resolve, to neighborhood concerns about noise and air pollution, as well as their impact on the local water supply. One startup called Atomarine wants to solve this by building nuclear-powered data centers on barges and deploying them at sea.

There have already been various proposals to put data centers out at sea (or even submerged) from established names and startups. We’ve seen conventional examples from companies like Samsung Heavy Industries and Japanese shipping company MOL who to put the servers on dedicated ships and are powered by liquefied natural gas (LNG). There are also more innovative solutions from startups that want to put them in the bases of ocean-based wind turbines or in wave energy converters.

Atomarine differs by building data centers as floating barges, similar to floating oil platforms, which can be deployed anywhere — even in international waters. This should help cut down on the permitting process, and it doesn’t have to worry about disturbing neighbors. The electricity needed to run the infrastructure is then delivered by a power ship moored alongside the barge supplied by LNG ships. Once small modular nuclear reactors (SMRs) become commercially available and certified for shipboard use, operators can then swap out the conventionally powered electricity suppliers with a nuclear one relatively quickly. And because these data center barges are modular in nature, it would be relatively easy to upgrade and scale the floating data center.

While this project sounds promising, building a megastructure like this comes with several challenges. The biggest one is that the ocean is massive and unpredictable, so these barges must be engineered to face extreme weather conditions, making them quite expensive to deploy. It must also be connected to high-speed internet (unless the operators plan to ship tons of drives daily), so they’ll have to lay undersea cables, as well. Furthermore, data servers are particularly sensitive equipment, so they must be upgraded to ensure that they can withstand the continuous rolling motion and the salty environment of the sea. There’s also the question of an SMR’s viability in shipborne use, although the U.S. Navy already has a good track record of running nuclear reactors aboard massive vessels.

The mounting opposition against data centers, both by the general public and politicians, is making it harder and more time-consuming to build new projects across the U.S. While an ocean-based data center like this is likely going to be significantly more expensive and technically challenging than land-based developments, this might become the fastest option in the future if the idea proves to be viable.

The largest utility company in Georgia is conducting a massive upgrade of its grid, and part of this project requires the connecting its Ashley Park Substation to Plant Wansley, which is currently undergoing an upgrade. The 35-mile stretch between the two facilities will go through Fayette, Heard, Fulton, and Coweta Counties, and require the removal of 30 residential properties along its path, reports Fortune. This included Ansley Brown’s family home, who took to Instagram to share her story.

“Georgia Power is forcibly taking people’s homes, okay? They have no choice in this matter,” Brown said in her IG post. “As you can see behind me, these are the power lines, and this is my childhood home. My childhood home is being taken by Georgia Power — they’re going to bulldoze this entire property to the ground. We don’t have a choice in this. They’re going to be expanding these power lines. Why? For the data centers. All of this is for the data centers.”

Thankfully, her family was able to get in touch with their representative, Brian Jack (R-GA), who sent people on the ground to take stock of the situation and connected the two parties. Brown said in her last update that they’ve already settled with Georgia Power, with the company telling Fortune that the family has agreed to a settlement for an undisclosed amount.

While this ended up on a somewhat positive note for the family, this is an example of what one report previously warned about government using eminent domain to seize land for the AI infrastructure build out. Georgia Power isn’t exactly building the transmission line to connect a power plant directly to a data center, but AI data centers’ massive power demands have caused massive opposition to projects like this to appear nationwide. It also doesn’t help that an AI data center, which is being accused of secretly using up 29 million gallons of water, sits less than five miles to the southwest of the substation.

The current administration has been pushing for AI data centers, believing that it needs all that infrastructure so it can win the “AI race” against China. However, the U.S. power grid is sorely lagging behind its Asian rival, meaning U.S. power utilities and electricity providers are spending billions of dollars to upgrade the grid. This, in turn, is being passed on to every power consumer, which is heavily affecting the average American. President Donald Trump instituted and expanded the “ratepayer protection pledge” in attempt to control the spiraling costs.

California has been trying to pass a law that will codify these promises, but the same tech companies that signed the pledge are also reportedly lobbying against the bill. At the moment, Oregon is the only state that has a regulation that forces big consumers (like data centers) to pay their fair share, with industries using 20MW or more getting slapped with a 30% increase in their power bill while residents and commercial users get their costs slashed by 1.3%.

Plymouth Township, which sits roughly 13 miles to the north of Philadelphia, said that it will approve a new data center project on the condition that it meets 43 specific demands. While Pennsylvania state law prohibits blocking a landowner from using their property lawfully, Ars Technica says that townships can impose zoning restrictions and health and safety regulations. Because of this, Plymouth created a nine-page plan that covers everything from noise, light, and air pollution, to water and power use, as well as land use, taxes, and even future decommissioning of the data center.

Many jurisdictions would have just outright rejected or delayed the data center project, which is owned by Brian O’Neill, but Plymouth Township decided to go in a different direction. It still allowed the application to go through, as not doing so would expose the local government to legal action, but gave the developer the outlined demands (listed in pages 4 to 12 of this PDF) that it needs to meet to get the green light from its people. The township said that the applicant initially showed that they would implement that township’s provisions, which were derived from the demands of its residents.

“The Council can, should, and will do everything in its power to ensure the health, safety, and welfare of the Township, our environment, and our residents. This is always our top priority,” Council President Lynne Viscio said in a statement. “We understand that a hyperscale data center raises numerous significant concerns, issues, and questions. Accordingly, we spent considerable time researching and developing a comprehensive set of requirements to address the concerns raised by residents, our own concerns, and the issues raised by other subject matter experts.”

Unfortunately, the data center developer rejected the concerns after seeing the breakdown of demands. It then filed a second application challenging the provisions set in the zoning ordinance, saying that they make building the project “too difficult” for the developer. Plymouth Township did not look kindly upon this, saying it “is a blatant attempt by the Applicant to demand approval by tantrum.” It’s currently unclear how Plymouth Township will move forward with the issue, with the application currently awaiting approval from the Zoning Hearing Board.

As for O’Neill, he told the Philadelphia Inquirer that the accusations of was part of a “misinformation campaign” against his project, and that he has been “negotiating in good faith” with the township’s attorney and had even agreed to most of the provisions. “We are sympathetic to the fact that they are under tremendous political scrutiny from people outside the township, as well as residents inside the township, and that makes giving a landowner their property rights … challenging,” he told the local newspaper. “However, I am a landowner, and I do have rights, and it is their job to be impartial and fair in their analysis and response.”

These requirements are meant to prevent the various challenges that other communities face with data center deployments. Examples of these include a Michigan data center generating noise 24/7 that has been affecting residents for over two years, PJM Interconnection, the U.S.’s largest power region, hiking electricity prices by 76% due to AI demand, a Meta data center contaminating a city’s reclamation water supply, and Elon Musk’s Colossus 2 data center facing a lawsuit for its unpermitted natural gas turbines spewing nitrogen oxides and other pollutants.

Police from Emporia, Kansas, arrested a teacher for applauding a speaker who was speaking out against a proposed zoning change to accommodate a planned data center in the area. According to 12 News, the police dragged 37-year-old Lux Claridge from the community meeting and charged him with disorderly conduct and interference with law enforcement. The commissioners had reportedly repeatedly warned against clapping and making other reactions while someone was speaking.

A video circulating on the internet shows Claridge clapping five times after a speaker closed their statement. We can hear in the clip below someone saying, “Ask him to leave,” followed by a second voice confirming, “Can I?” The voice then asked a police officer, “Chief? Will you ask-will you take the next person out that claps or anything, please? Thank you.”

The cops then approached Claridge, who said, “I have a right to speak.” The police were nonetheless insistent, which is when he said, “Drag me out.” Four officers then proceeded to cuff the teacher and hoisted him off to Lyon County Jail.

The data center’s critics warned against the project, saying that it could strain the local power supply and negatively impact the residents’ water quality. Their concerns are not without merit, as AI data centers have caused a massive 76% increase in electricity costs in the U.S.’s largest power region, while a Meta site is accused of muddying an entire town’s water supply.

Despite that, Emporia, located about 100 miles Southwest of Kansas City, approved the zoning changes needed for the Flint Hills Digital Campus project to move forward with the permitting process. This does not mean that the data center will immediately start construction, though, as it probably still needs to go through several more steps before it can break ground.

This isn’t the first time that a data center dissenter was hauled off to jail for reasonably pushing back against the said project. An Oklahoma farmer was arrested back in April for trespassing after going a few seconds over his allotted time and handing paperwork to the commissioners. Pushback against projects like these have been happening across the country, with several jurisdictions like Seattle and New York State enacting one-year moratoriums to study the potential effects of these infrastructure projects and how they could be mitigated.

President Donald Trump created the “ratepayer protection pledge” to force AI hyperscalers to “pay their own way” when it comes to electricity costs. He has even expanded this recently to include states and utility companies, with 23 governors and 187 firms signing up on the promise. Unfortunately, this is just a piece of paper and has no legal or regulatory power over the signees, with tech companies pushing back against a California bill that wants to turn this into law.

At the moment, Oregon is the only state that has passed and enacted a law that forces electricity consumers that used 20 MW or more to cover their fair share. Because of this, Portland General Electric, the state’s biggest power generator, has increased data center bills by 30% while cutting residential electricity costs by 1.3%.

Claridge is currently out on bail and is awaiting his hearing in September. "I'm glad to be out, but this is an inconvenience, really," Claridge said to local media. "It's not really deterring me from speaking out or, I guess, clapping."

OpenAI is in advanced talks to lease SB Energy's 10 GW data center campus in Piketon, Ohio, with Nvidia in discussions to guarantee roughly $250 billion of the financing behind it, the Wall Street Journal reported on Sunday, citing unnamed people familiar with the matter. The site would be OpenAI's first as a tenant rather than a customer of Microsoft, Amazon, or Oracle, and Nvidia is separately discussing financing the accelerators going inside, which could run to another $350 billion. Terms haven't been settled, and the arrangement could still collapse.

OpenAI has no investment-grade credit rating, and Nvidia's involvement would let SB Energy raise debt against Nvidia's balance sheet instead of its tenant's. Nvidia has already put $30 billion into OpenAI, which has raised its projected compute spending to around $750 billion through 2030, up from roughly $600 billion earlier this year, according to the Journal. Commerce Secretary Howard Lutnick controls allocation of the site's power, and Anthropic, Microsoft, and Google have all spoken to him about it in recent weeks.

Nvidia's Q1 FY2027 10-Q caps maximum gross exposure across all of its partner facility lease guarantees at $3.5 billion, shrinking as partners pay their lessors, with $712 million sitting in escrow against it. Nvidia took the guarantees in exchange for warrants and carries them as credit derivatives, describing their fair value as immaterial.

The first one, disclosed in the third quarter of fiscal 2026, was capped at $860 million with $470 million of escrow behind it. The partner separately contracted to sell the data center cloud capacity, and Nvidia retained the option to assume the lease for internal use or sublease it if the escrow and that contract came up short. Neither remedy has an obvious equivalent at a 10 GW campus on federal land.

Nvidia held $62.6 billion in cash, cash equivalents, and marketable securities when fiscal 2026 closed on January 25, against full-year revenue of $215.9 billion and net income of $117 billion. A $250 billion guarantee works out at roughly 71 times the guarantee book Nvidia has disclosed, more than a year of revenue, and about four times its cash.

SB Energy broke ground at the former Portsmouth Gaseous Diffusion Plant on March 20 alongside Energy Secretary Chris Wright, Lutnick, and SoftBank chairman Masayoshi Son. The site enriched uranium for the U.S. weapons program from 1954 until 2001 and is still being decontaminated. The Department of Energy had listed it among 16 federal sites opened to data center construction, and SB Energy leases the land rather than owning it. Powering the campus takes 9.2 GW of new natural gas generation plus $4.2 billion of transmission work with AEP Ohio, funded by $33.3 billion Japan committed under its trade agreement with the U.S. The first phase, roughly 800 MW, is expected in 2028.

OpenAI gave up on building its own data centers last year in favor of leasing capacity, and SoftBank carries more than $130 billion of debt while funding buildouts in Ohio, France, and elsewhere.

Residents of Dowagiac, Michigan, just filed a lawsuit against a data center that allegedly generates a high-pitched whining sound — and has done so 24/7 for the past two years.

The data center, which is owned by Alliance Cloud Services LLC, a subsidiary of Hyperscale Data, used to be an industrial building that sat behind a row of pine trees across the street from the most affected residents, according to ABC-affiliateWXYZ. The site started development in 2018 and was eventually turned into a cryptocurrency mining center in 2021. But in 2024, something changed drastically when the building started emitting noise pollution around the clock. Residents say it sounds like a vacuum cleaner in their living room, and the company has offered to buy up homes from unhappy residents.

“It sounds like someone set up a vacuum, like in your living room. And the vacuum is just... that thing needs to be cleaned ... the filter is clogged up, so it’s a high-pitch whining. And they just left it on and walked out," said Lindy Valenzuela, one of the residents living across from the data center. Billy Finn, who also lived nearby, added, “You’ve seen movies and stuff where they have somebody in a cell torturing them with sound. And that’s basically what it is."

Dowagiac has recently instituted an industrial noise ordinance, with a daytime limit of 65dB during the day and 55dB at night, and it has fined the data center for violations. However, Hyperscale Data is challenging the city’s readings and methodology. The company said that it’s planning to expand its operations in the footprint in the area, but the city said that it hasn’t received any permit applications.

Hyperscale Data CEO William Horne told the residents directly in a special council meeting that the site is pivoting away from cryptocurrency operations towards AI computing and advanced robotics, and that it’s spending $100 million to achieve this. It has also bought acres of adjacent properties for use as a natural buffer to reduce the noise that affects residents in the future, alongside other efforts that will reduce sound levels. "If they still aren't happy, and feel that their home isn't enjoyable, then we'll buy their property from them,” Horne said.

Still, this statement did not sit well with the affected residents. One of them said that their family has been living in the area for close to a hundred years, with their friends and support system, while another has a 17-month-old baby and another on the way, meaning moving for them is going to be difficult, if not impossible. Because of this, the residents asked the CEO why they didn’t act on the complaints as soon as they started and accused the company of not being a good neighbor.

This isn’t the first noise pollution lawsuit that a data center is facing in the country. A Microsoft data center is facing a similar class-action lawsuit in Wisconsin from residents who live within 1.5 miles of the facility. One non-profit organization also said that inaudible vibrations, called infrasound, that these industrial sites emit can be heard and felt for hundreds of feet in surrounding areas and could potentially have negative health effects on anyone who can feel it.

After decades of charging only a one-time fee for undersea cables along its coast, Oregon's lawmakers have recently been discussing a missed opportunity for tax revenue. The state is set to charge cable operators a one-time fee for cable installations within three miles of its coastline, and will be funneling that money into its Common School Fund.

The currently existing fee structure dates back to 2001 (25 years ago), and is simply a $5,000 application fee. The new pricing is still undergoing discussion, but the simplified version is $3 per linear foot of cable, plus $7 per each section of bore pipe — the protective structure that covers the portion closest to shore. Oregon's Department of State Lands (DSL) estimates that on a 20-year lease, this would bring in millions per undersea cable over that time span. The DSL did some rough math with Amazon's Bitfrost cable, and came up with a grand total of $1,450,380 for two decades, paid in one lump sum.

It's worth noting that the aforementioned rates were revised from an earlier, more expensive proposal that would take bore cross-section into account (a calculation that was dismissed as too complicated and, presumably, too onerous). The state wants to continue attracting investment to its tech sector, which includes around 140 datacenters and 16 undersea cables of various types. Oregon also doesn't have sales tax, and its enterprise zoning incentives has made it an attractive location for players like Amazon, Microsoft, and Google.

The DSL calls the revised rate "competitive-to-low," reinforcing the notion that Oregon is trying to stay competitive with its southern neighbor, California, which charges an estimated $5 per cable foot on an annual basis.

It's worth noting that spending a million or two over two decades is peanuts compared to the initial outlay required to put an undersea cable down in the first place, especially one coming from across the world. These reportedly ring in at around $250 million for a transatlantic connector — and a whopping $400 million to cross the Pacific.

Although it's not set in stone, it seems that already-approved cables might be almost entirely exempt from the new fees. Some recent contracts, such as the one for Amazon Bifrost, did include a clause that said that any fees applied by new state laws must be paid for. However, the contract also included a specific $300,000 "out" for this clause — which Amazon paid at the time.

U.S. data centers are on track to consume about 20% of the nation's electricity by 2035, up from 5.9% today, according to a new BloombergNEF forecast The research firm raised its 2035 demand projection to 194 GW, an 83% increase on the forecast it issued in December, and calculated that even a record pace of grid connections sustained every year for a decade would leave a 19 GW supply shortfall.

BNEF's December outlook put 2035 demand at 106 GW, and that figure was itself 36% above the projection the firm published in April 2025, which works out to roughly 78 GW. The 2035 number has increased around 2.5 times in 15 months, with the latest jump reflecting the volume of new AI facilities entering the development pipeline rather than capacity actually under construction. Many other forecasters are moving in the same direction, with the electrical industry nonprofit EPRI more than doubling its 2024 estimate and S&P raising its projection by more than a third between October and April.

Nearly half of the projected capacity will serve AI training and inference workloads, and the U.S. is expected to host 64% of the world's AI chips by power demand in 2033. BNEF estimates that data centers will account for around 12% of U.S. electricity consumption in 2030 before reaching 20% five years later, with Virginia and Texas running above the national average. Gartner separately forecast that global data center electricity consumption will grow 26% this year, reaching 565 TWh in 2026.

The most data center capacity ever connected to the U.S. grid in a single year is 7.1 GW, according to the report. Holding that pace through 2035 still produces a 19 GW shortfall under BNEF's base case, even after accounting for on-site gas generation. Lloyd Arnold, a BNEF analyst and one of the report's authors, told Bloomberg that of the output from "every coal plant, every gas plant, every solar farm in the U.S.," one unit of energy in five will go to data centers.

PJM Interconnection, the 13-state grid operator whose territory includes Northern Virginia's data center corridor, will send 34% of its electricity to data centers by 2035, with ERCOT in Texas at 22%, per reporting from TechCrunch. PJM's independent market monitor has already attributed a 75.5% increase in regional power costs directly to data center demand.

Close to half of planned U.S. data center builds this year are projected to be delayed or canceled, with lead times for high-power transformers stretching to as long as five years. BNEF's own December revision was driven primarily by early-stage projects that entered utility queues to secure power before construction began, so a meaningful share of the pipeline behind the 194 GW figure remains speculative.

Amazon’s Bahrain data center was reportedly once again hit by missile strikes after the Iranian Islamic Revolutionary Guard Corps (IRGC) conducted an attack against the site. Iran state media claimed that the IRGC launched cruise missiles against the AWS facility and “destroyed it” in response to the U.S.’s bombing of a nuclear plant being built in Darkhovin, Iran, which is close to the Iraqi border.

This isn’t the first time that the American tech giant’s data centers have been attacked in the area. In fact, Iran used drones and missiles to hit several AWS Middle East regional data centers just days after the U.S. began its air strikes against the country. The damage to the sites has gotten to the point that Amazon put them in “hard down” status between late March and early April, with the last update on the AWS Health Dashboard saying that the Middle East (Bahrain) Region (ME-SOUTH-1) “is currently unavailable.”

It isn’t clear if Amazon has begun work on restoring its services in the region. The U.S. and Iran agreed to a ceasefire on June 17, 2026, but the entire thing collapsed after the latter allegedly attacked three ships in the Strait of Hormuz that were sailing in Omani waters on July 7. This led to an escalating series of retaliations, with one of the recent Iranian strikes resulting in American casualties in Jordan. Aside from hitting the nuclear powerplant that’s still under construction, U.S. Central Command said that it also “targeted Islamic Revolutionary Guard Corps forces that launched attacks against U.S. service members in Jordan on July 17.” The IRGC said that this is what led to its most recent attacks on AWS Bahrain.

Despite the strikes, it seems that it had no effect on Amazon’s services — the company has long moved its customers to sites unaffected by the conflict, ensuring service continuity. While it’s possible that the tech giant is trying to repair the damage to its sites, it hasn’t released any updates about the AWS Bahrain data center. As long as the war between the U.S. and Iran hasn’t resulted in lasting peace, American infrastructure in the region is in grave danger of being attacked, especially as the IRGC has directly threatened American tech companies like Microsoft, Apple, Google, and even OpenAI’s $30-bilion Stargate data center in Dubai.

Elon Musk’s Colossus 1 and 2 data centers are in hot water for allegedly using unpermitted mobile natural gas turbines to generate the power they need. But even though he also owns a solar power generation and large-scale battery storage business through Tesla Energy, Electrek reports that he instead doubled down on mobile generators after purchasing APR Energy. It’s not exactly known how much Musk paid for the company, but disclosures revealed that he spent more than $50 million on the 5% stake held by a minority shareholder. This meant that he likely poured at least a billion dollars into the entire firm if every shareholder received the same amount.

Deals of this magnitude often come with press releases, but it was only made public because of a Federal Trade Commission (FTC) early termination notice that approved it without requiring further review. It’s unclear why Musk did not publicize it, but SpaceXAI is currently facing allegations that its data centers in Memphis, Tennessee, are generating massive amounts of pollution that mostly affect nearby black communities. It makes financial sense for Musk to acquire APR Energy, especially if he’s spending millions of dollars renting these generators. However, he’s also trying to win over his data centers’ neighbors, like giving a 50% discount on all residential Starlink plans in Memphis and Southaven, and news like this would certainly undermine his efforts.

It’s understandable why SpaceXAI wants to continue using these mobile turbine generators instead of connecting directly to the grid. The massive amounts of power that these data centers demand, with Musk aiming for a 1-gigawatt capacity, means that the infrastructure behind that must be upgraded. It would also take months, if not years, before his sites could get approved to connect to the grid. Aside from having to go through several regulatory hoops, it would also likely face stiff resistance from the community who is afraid of experiencing the same “irreversible” 76% price spike that PJM imposed that’s being blamed on data centers.

But even without a fixed powerplant (which Musk is reportedly importing), SpaceXAI is already facing opposition from the community. The residents surrounding the sites have already filed a lawsuit against SpaceXAI and Elon Musk, but it will likely be an uphill battle, especially as the Department of Justice (DOJ) has weighed in, saying that Colossus 2 “supports mission-critical operations” for national security. We still don’t know what will happen to Elon Musk’s turbines, especially as the hearings are yet to take place; but in the meantime, nearby residents have no choice but to accept the alleged additional risk and pollution that these mobile generators bring.

Elon Musk's Colossus 2 xAI data center, which runs independently of the power grid through on-site natural gas turbines, is said to be releasing thousands of tons of nitrogen oxide and carbon monoxide every year. According to Reuters, the company has installed 59 temporary, mobile natural gas turbines without permission, and these unpermitted portable units mostly heavily affect the communities surrounding the site, which happen to be predominantly black and are already suffering disproportionately high lung disease rates. xAI has claimed that it’s running 27 turbines without any permits, saying that it’s exempted because of their temporary nature.

Elon Musk’s alleged use of illegal turbines isn’t a new issue, with the community discovering that it’s been using over 30 gas turbines on the site, despite only having an ongoing application for 15 in July 2025. The company said that these turbines are exempted from the permitting process, as they are not permanent installations and will be moved within 364 days. The Environmental Protection Agency (EPA) issued a ruling earlier this year that removed all exceptions, but told Reuters that “it’s considering changes allowing ‘regulatory flexibilities’ for portable units while continuing to protect public health.”

The Colossus data centers were put up in record time, and Musk had to bring his own energy sources to achieve this. That’s because connecting to the grid could take years, especially if the grid must be upgraded to deliver his 1-GW capacity target. However, the Clean Air Act permitting process could take a similarly long time, with the report suggesting xAI bypassed it completely just to achieve its goal. Adding to the complexity, while the data center is located in Tennessee, Reuters reports that "at least" 57 of the 59 turbines are actually located just over the state line in Mississippi, which issued a permit for 41 permanent turbines in March. xAI and Mississippi environmental regulators claim the turbines are mobile and therefore don't need permits, but they also aren't covered by the permit for 41 permanent turbines.

This did not sit well with the communities surrounding the data centers, especially Colossus 2, which sat near the border of Tennessee and Mississippi. Because of this, xAI (now called SpaceXAI after its recent merger with Space X) is facing a lawsuit from the NAACP, which alleges that the operation of these unpermitted turbines resulted in an 111% increase in nitrogen oxide exhaust, an 83% increase in PM2.5 airborne particles, and an 88% increase in formaldehyde emissions. The Reuters investigation says that just 30 of the 59 turbines listed could emit 2,500 tons of nitrogen oxide, 4,000 tons of carbon monoxide, and 22 tons of formaldehyde annually — way above the 100-ton nitrogen oxide threshold that the Clean Air Act set for turbines to operate without a permit.

These pollutants are proven to have adverse effects on the health of the people living within a five-mile radius of the source, and census data showed that the residents living in the affected area are predominantly black. Since Colossus 2 straddles a state boundary, the publication listed the data for two counties — DeSoto County, Mississippi, and Shelby County, Tennessee. Statistics show that about 46% of the population in the former and 94% in the latter are black, which is significantly higher compared to the 33% and 52% in the rest of the counties.

While the report did not say that these communities were deliberately targeted, it also pointed to a 2022 study that showed that areas once redlined by banks still suffer in the present day from higher air pollutant emissions. SpaceXAI recently announced an automatic 50% discount and free hardware rentals on Starlink plans for people living near Colossus 1 and 2, with SpaceX VP for Starlink Michael Nicolls saying on X, “The unique capabilities of the Colossus datacenters could not be accomplished without the partnership and support from the local Memphis community.” While this may bring some benefit to already existing Starlink users, some say that this is merely a PR stunt to help give the company a better image as the community is battling the air and noise pollution they bring to the area.

New York Governor Kathy Hochul signed into law Senate Bill S10642 today, also called the Responsible Data Center Development Act, which would put a one-year moratorium on all data center developments in the state. According to Reuters, this is the first temporary ban to be enforced statewide in the U.S. Maine’s legislature was actually the first one to pass a statewide moratorium, but Maine Governor Janet Mills vetoed the measure after it failed to exempt a data center project “that enjoys strong local support from its host community and region.”

"As data center development threatens ⁠to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it's my responsibility to take ​action and lead," Hochul said in a statement. She also said that she’s pursuing legislation to repeal tax exemptions for large data centers. The moratorium will apply to data center projects with a capacity of 50 megawatts or more, with the New York Department of Environmental Conservation not issuing any more permits to projects that haven’t been completed yet.

Hochul said that the state will build a Generic Environmental Impact Statement (GEIS) so that future data center developments are held to “consistent standards,” while also looking at how the construction and operation of these projects will impact the environment. Although the data center moratorium is set for one year, the governor’s office said that it will be lifted once the state has finalized the GEIS.

President Donald Trump has been pushing for the development of AI technologies, with the White House releasing the ‘AI Action Plan’ to accelerate infrastructure build-out. While this policy encouraged the development of AI data centers, the numerous large projects also resulted in memory and storage chip shortages, as well as negative impacts in the communities and regions where they’re located. For example, Monitoring Analytics, which oversees the largest power grid operator in the U.S., attributes an “irreversible” 76% price hike to increased data center demand, while a Virginia county has asked government offices to conserve power because of AI-driven price hikes. There have also been multiple issues with various data center projects relating to water consumption and air and noise pollution, which is why 70% of Americans now oppose having a data center built near their home.

All this pushback has resulted in many jurisdictions passing data center moratoriums. More than 75 projects have already been delayed in the first half of this year, amounting to $130 billion, with New York state being the first one to pass a state-wide temporary ban. Before this, Seattle, which plays host to the headquarters of Amazon and Microsoft, passed a similar one-year moratorium last month.

While delays like this will likely negatively impact the future availability of compute within the U.S., it’s also forcing tech giants to speed up innovations and governments to pass laws that protect their constituents. Multiple startups have started unveiling or even turning on their small modular reactor (SMR) prototypes, which could deliver the power needed by data centers without increasing air pollution or straining the local power grid. AI tech companies like Microsoft and Nvidia are also working on solutions that will cut data center energy use and water consumption, while Oregon’s POWER Act increased data center bills by 30% while cutting residential costs by 1.3%.

Meta has said it will expand its Hyperion data center in Richland Parish, Louisiana, to 5 GW (gigawatts) of compute capacity from an initial 2 GW, pushing the company’s planned investment in the region beyond $50 billion. The announcement — made in an official blog post on Monday, July 13 — confirms the long-signaled scale-up of what is already Meta's largest data center.

The expansion will be a major increase over the $10 billion, 4-million-square-foot project Meta unveiled in December 2024, when it said the campus would deliver more than 2 GW of capacity. However, the 5GW target itself is not entirely new. CEO Mark Zuckerberg said in July 2025 that Hyperion would eventually reach that scale. Monday’s announcement formally ties the expanded capacity to an investment exceeding $50 billion and provides updated figures for jobs, contracts, and public infrastructure spending.

Much of the announcement is built around local economic impact. Meta said local Louisiana businesses have received more than $1.6 billion in contracts since construction began, while also highlighting teacher bonuses in Richland Parish that rose from $10,000 last year to more than $50,000 this year, funded by increased tax revenue tied to the data center.

In what appears to be a bid to pacify anti-data-center sentiment further, Meta said it plans to invest over $1 billion in local infrastructure improvements, including roads, water, and wastewater systems, as part of the expansion. The company’s recent agreement with utility Entergy Louisiana includes natural-gas plants providing more than 5.2 GW of capacity and support for up to 2.5 GW of new solar generation. Entergy claims Meta’s payments could save other customers around $2 billion over 20 years — a significant reprieve amid concerns over the impact of data centers on nearby residents’ electricity bills — although those savings remain projections.

On the other hand, the project is also receiving substantial state and local support. In late 2024, Louisiana Governor Jeff Landry signed into law a 20-year sales tax exemption for data centers built before 2029, part of an explicit effort to court Meta. The law allows qualifying data centers to claim sales-and-use-tax exemptions on eligible equipment. At the same time, Meta is expected to benefit from the state’s Quality Jobs program and a payment-in-lieu-of-taxes agreement that could reduce its property-tax burden if investment and employment targets are met.

First announced as a $10 billion project in December 2024, Hyperion is Meta’s AI supercluster campus in Richland Parish, Louisiana. The data center will house the infrastructure needed to train and run Meta’s future AI models, with CEO Mark Zuckerberg linking it directly to Meta Superintelligence Labs, the company’s AI division. In October 2025, Meta and Blue Owl Capital announced a joint venture valuing the project’s buildings and infrastructure at roughly $27 billion. Blue Owl holds about 80% of the venture, with Meta retaining 20% and leasing the completed facilities. The July 13 announcement raises Meta’s total planned investment in the region to more than $50 billion, but provides no further details on how the expansion affects the joint venture.

Hyperion is one node in a much larger spend. Meta is forecast to spend up to $145 billion in capital expenditures in 2026, mostly on AI infrastructure, as demand for AI compute continues to outstrip supply. The company has said it will cut 8,000 jobs to raise funds. Meanwhile, Monday's announcement follows what Meta says is its strongest week on the market since early 2024, driven by new AI model releases.

Data centers accounted for 23% of Ireland's total electricity consumption in 2025, according to data released by the country's Central Statistics Office last week. The report revealed that data center consumption rose to 7,663 GWh in 2025 from 6,973 GWh in 2024, a 10% rise in a single year. Meanwhile, consumption by the rest of the country increased by just 2% within the same period.

Viewed over a ten-year period, the 2025 figure represents a steep 360% increase from 2015, when data centers' total consumption was just 5%. The rise in consumption is even steeper when measured on a quarterly basis. Q4 2026’s consumption was 1,991 GWh, a 584% rise from Q1 2015’s 291 GWh.

“Newly compiled quarterly figures spanning 2015 to 2025 highlight a substantial increase in metered electricity consumption by data centers. Over this period, data center consumption saw a significant increase, from 291 GWh in the first quarter of 2015 to 1,991 GWh in Q4 2025, growing by 584%,” noted Dr. Grzegorz Głaczyński, an in-house statistician in the CSO’s Climate and Energy Division.

At 23%, data centers' consumption was almost as much as residential, including both urban and rural dwellings, which stood at 28%. The roll oout of these server farms — which have rapidly increased in number around the world due to the AI boom — have sparked a global debate. While they are critical to the AI technological revolution, there has been growing concern about their impact on the local communities where they are situated. Critics cite the impact of the immense electricity consumption on residents’ bills as one of many concerns.

The Republic of Ireland, with a relatively small population of around five million, is home to around 89 data centers, primarily clustered around the Greater Dublin Area. The majority and the largest belong to hyperscalers, including Microsoft, AWS, Google, and Meta, that build and operate facilities exclusively for their own cloud infrastructure, consumer apps, and AI frameworks. The rest are owned by colocation providers that lease out capacity.

While Ireland's initial data center boom was driven by traditional cloud storage and social media applications, the explosion of generative AI has led to a sharp increase. Due to fears that soaring electricity demand from server farms would cause widespread blackouts, the country's Commission for Regulation of Utilities (CRU) issued an emergency regulatory direction in November 2021 that imposed a de facto moratorium on new data center grid connections. The policy mandated that the national grid operator, EirGrid, immediately halt the processing of standard power applications for new data facilities, requiring developers to either supply their own on-site electricity generation or relocate to unconstrained regions outside the Greater Dublin Area.

Despite the moratorium, data center consumption continued to rise steadily, to the point that the International Energy Agency predicted in 2024 that data centers would account for a third of the country's electricity consumption by 2026. The data show that the prediction remains a possibility, as the 23% figure was for 2025 and consumption has risen steadily every year.

Ireland has replaced the moratorium with a new Large Energy Users (LEU) Connection Policy, enacted by the CRU in late 2025 to manage data center growth. Under this policy, developers of new data centers (over 10 MVA) must provide 100% on-site, flexible power generation to meet demand, while sourcing at least 80% of annual electricity from new, unsubsidized renewable projects within six years of operation.

The immense electricity consumption is not unique to Ireland; surveys indicate that global data center electricity consumption will grow by 26% this year. These concerns, as well as issues over water usage and noise pollution, have led to growing anti-data sentiment in the US, with 70% of Americans reportedly opposed to siting data centers nearby. Protests have led to the cancellation of over 75 data center projects in the U.S. in Q1 2026.

Global data center electricity consumption will grow 26% in 2026 to reach 565 terawatt-hours (TWh), up from 447 TWh in 2025, according to a recent Gartner forecast that names power availability as a binding constraint on AI expansion. Worldwide power demand is set to rise 27% to 132 GW over the same period, up from 104 GW in 2025, with consumption projected to exceed 1,200 TWh by 2030. The gigawatt figure measures peak capacity that has yet to be built, permitted, and connected, while the terawatt-hour figure measures the electricity actually drawn over the year. Both, however, are climbing faster than utilities can add supply.

"Surging demand for compute-intensive AI workloads is driving unprecedented data center power growth, while AI capacity is now constrained by power availability, making data center power security the new battle ground for scaling and protecting margins in the global AI race," said Gartner's Direct Analyst Linglan Wang.

AI-optimized servers consumed about 95 TWh worldwide in 2025 and will draw 175 TWh in 2026, an increase of roughly 84%. Gartner expects that figure to reach 258 TWh in 2027, the point at which AI-optimized hardware will consume more electricity than conventional servers for the first time. By 2030, AI-optimized servers are forecast to account for close to half of all data center power consumption.

Conventional servers are effectively flat by comparison. They grew less than 1% in 2025 and are projected to rise 1.2% in 2026 to around 195 TWh, reaching 200 TWh in 2027. Gartner estimates AI-optimized servers will make up 31% of total data center power consumption in 2026, up from roughly 20% a year earlier. Cooling, of course, represents a growing share of the total, with electricity used by cooling systems forecast to climb 22.6% in 2026 to 195 TWh, reflecting the thermal load of denser AI racks and continued capacity expansion.

The U.S. accounts for about 204 TWh of the 565 TWh total in 2026, or 36% of worldwide consumption. Of that U.S. figure, dedicated AI data centers consume roughly 68 TWh, or one-third of the national total, while non-AI data center demand in the country has grown only marginally over the same period.

Regional grids are already feeling the strain, and more than 75 data center projects worth $130 billion were blocked in the first months of 2026 amid opposition over power and water costs, while some operators have turned to on-site gas generators to bring capacity online without waiting for grid connections. In Virginia, one county asked employees to conserve power as data center demand pushed utility rates higher.

In its report, Garner warns that grid supply will be insufficient to meet demand once consumption passes 1,200 TWh by 2030, a shortfall that will affect all data center users, not just AI operators. The forecast accounts for parts and supply shortages, delayed or cancelled projects, and geopolitical disruption, including conflict involving Iran. Wang said infrastructure and operations leaders should prioritize efficiency upgrades, secure grid access, and invest in high-efficiency cooling and edge computing to manage the constraint.

Hyperscalers have moved in the same direction, with Meta having signed deals for more than 6GW of nuclear power to supply its upcoming data centers, and one firm repurposing retired U.S. Navy reactors for an AI site in Tennessee. Those projects will take years to deliver, with recommissioned nuclear plants and the earliest small modular reactors not expected online until 2028 or later, leaving power availability as a near-term limitation on the seemingly unstoppable AI build-out.

Portland General Electric (PGE), Oregon’s largest electricity supplier, will increase its rate for large power consumers by 29.7%. Oregon Public Broadcasting (OPB) reports that the state’s Public Utility Commission (PUC) unanimously approved the increase, which will primarily affect large industries, data centers, and cryptocurrency mining operations. Meanwhile, costs for residential users will decline. The higher rate class, which was created last year under the state’s POWER Act, will be applied to developments that use more than 20 MW of power, which is about what a large paper mill consumes, and is way lower than the target capacity of some of the largest data centers.

“These changes ensure that costs created by data centers in PGE’s territory are more accurately reflected in their rates,” PUC Chair Letha Tawney said in a statement. “By putting this structure in place now, we are getting ahead of a bigger issue, enabling responsible data centers to pay their own way, and protecting customers from higher costs in the future.” Oregon Governor Tina Kotek called this move “a win for Oregonians.” “The POWER Act was intended to ensure fairness and accountability when large energy users, like data centers, take up more load on Oregon’s electrical grid,” Kotek said. “We must continue to do whatever we can to keep working families and small businesses from absorbing the costs of data center energy use.”

This is the first piece of good news to come out of electricity and data centers for residents, at least for the state of Oregon. Opposition against data centers has steadily been increasing, especially in the last few months, with more than 70% of Americans pushing back against data center developments near their communities. This is primarily driven by the massive power consumption that these projects require, leading to unprecedented price hikes in the regions they’re located in. This increase in utility costs isn’t just caused by the massive amount of electricity that data centers use, but also by the huge investments that utility companies must make to upgrade their capacity to account for this increased use.

By forcing large customers to pay for these upgrades through increased rates, ordinary consumers won’t have to face higher energy bills. President Donald Trump has previously summoned AI tech giants to the White House and made them promise to “pay their own way” through the “ratepayer protection plan.” However, some experts were skeptical about this move, as it doesn’t have any teeth and cannot be legally enforced.

On the other hand, Oregon’s POWER Act (HB 3546), which the state passed in April 2025, codified this into law. “HB 3546 is a simple and straightforward bill to ensure that large energy users served by investor-owned utilities pay their own way. We aren’t asking them to subsidize other users, and we aren’t challenging the tax benefits that are often associated with development. We just want their bills to reflect the true costs of their electric service,” State Representative Pam Marsh, D-Ore. (HD-5) said when it passed.

We have yet to see if other states will follow and pass similar laws that will reduce the burden on the general consumer. While this move might feel counterintuitive for data centers, as they will end up paying more in electricity costs in the long run, this would help ease the public opposition against their developments. By ensuring that the general consumer is protected from unwarranted price increases, they might be more receptive to having data center developments built near their homes.

The UK just gave Nationally Significant Infrastructure Projects (NSIPs) the right to bypass pre-application consultation with local council planning processes, meaning the green light will come directly from the national government. According to The Register, NSIPs are major projects that the state considers to be nationally important, like power plants and railways. Data centers were included in this list earlier this year, meaning these developments could now get approval directly from the national government instead of going through hoops in local councils. Still, this is an opt-in process requiring developers to apply for the status.

"Datacenters are not automatically consented as NSIPs; instead, the NSIP regime operates on an opt‑in basis for developers,” the law firm Womble Bond Dickinson told the publication. “A datacenter project may be directed into the NSIP regime where the Secretary of State considers it to be of national significance and satisfied that the statutory tests under section 35 of the Planning Act 2008 are met.” However, it also said that there are no clear guidelines yet from the government on what would make a data center qualify for NSIP status.

The Ministry of Housing, Communities, and Local Government (MHCLG) said that this change could reduce planning and application by up to one year and save developers up to USD 1.3 billion (GBP 1 billion). Aside from this, they’ll also get technical support and meaningful advice from the Planning Inspectorate before submitting applications, ensuring that the process will run more smoothly and efficiently.

This change will make it much faster for data center projects to get off the ground in the UK, with three projects already benefiting from their classification as an NSIP. It seems that the British government is learning from the chaos happening across the pond, as 7 out of 10 Americans are now against data center projects being built close to their communities. These “not in my backyard” fights are turning into costly (and lengthy) legal battles, with developers facing resistance at the town, county, and state levels. This has also resulted in a growing number of data center bans passed by local governments, with more than 75 projects worth $130 billion delayed across the nation in just the first quarter of 2026.

There are concerns that the lack of qualifications would mean that every AI data center could quality as “nationally significant.” The UK’s Department for Science, Innovation, and Technology (DSIT) is said to address this through a National Policy Statement (NPS) set to come out later this year. But, in the meantime, more than 80 projects have already sought the pre-application service from the Planning Inspectorate to help make developments like data centers get off the ground much faster.

Controversy due to AI data center buildouts generally centers around their massive power usage and draining of local water reserves, but noise is a third torment to nearby residents, and one that is arguably much harder to correct. Residents of Sturtevant, slightly south of Milwaukee, Wisconsin, filed a class-action lawsuit against Microsoft due to the excessive noise produced by the company's Fairwater facility. CEO Satya Nadella described the project as "the world's most powerful AI data center," projected to generate 865,000 tokens per second and have a final bill of $7.3 billion.

The Sturtevant residents live just 1.5 miles (2.4 km) from the facility. The lawsuit was filed by three citizens and represents the households within this distance, reportedly amounting to over 1,000 homes, including areas in Mount Pleasant. The filing describes the noise situation as "not only excessive, but consistent and pervasive," and claims Microsoft did not "implement adequate acoustic barriers, shields, or walls that absorb, mitigate, and/or prevent the escape of noise, thereby resulting in the offsite emission of excessive noise beyond its property." One resident claims he had to change his shift at work to be able to sleep at all.

Nearby residents also complain about excessive dust and traffic stemming from the construction work, as well as light pollution. One resident says he often can't see his house coming into town, while another claims that before the data center arrived, the sky was dark and full of stars, now mostly gone due to the bright lights.

To some credit, Microsoft appears to have been trying to improve the situation, judging by a fairly detailed blog post on its community website. On June 18, the company said its engineers applied several measures that "fully resolved the issue," and that it would apply additional mitigations over the following months, including "additional sound reduction components."

The backstory in the post says the firm was aware of the issue back in April, and "[it] did not expect the tonal quality of the sound to travel as far as it has," attributing the decibels to cooling fans operating at too-high speeds, now purportedly corrected. In an earlier project update about the data center, Microsoft says it would have street sweepers working 10 hours a day and limit construction to hours between 6am and 10pm.

The lawsuit was filed on July 1, indicating that either the issue isn't resolved, or that the particularly short distance between Fairwater 1 and Sturtevant might make for a conundrum that's exceedingly tricky to solve. Some Mount Pleasant residents even live across the street from the campus, too. Before the Fairwater data center arrived, the land was already zoned for heavy industrial use back in 2017 to Foxconn, a status that carried over to Microsoft upon purchase. Notably, Wisconsin's "direct legislation" apparently does not allow amending or repealing existing ordinances, and is only available to cities, not towns.

The Cheyenne Board of Public Utilities has stopped accepting industrial wastewater from data center fill-and-flush and closed-loop cooling operations after tracing a rare bacterium in the city's reclaimed water to Goat Systems LLC, the entity Meta uses to build its Cheyenne campus. In a notice reported by Cowboy State Daily, the Board said Goat Systems was in significant noncompliance for discharging water carrying Cupriavidus gilardii, a metal-resistant bacterium that interfered with two water reclamation plants and pushed the reuse system offline for months of cleanup. The Board revoked the contractor's fill-and-flush discharge privileges on March 24, and a wider suspension now covers every data center connected to city services.

Fill-and-flush is a commissioning step in which crews fill a cooling loop's piping with water, flush it to clear debris before the system is run, and then send the used water to drain. Goat Systems routed that flush water, which contained Cupriavidus gilardii, into Cheyenne's sanitary sewer, Frank Strong, the Board's engineering and water resource division manager, told the Wyoming Tribune Eagle. Strong said the fill water had been purchased from the Board itself and that the origin of the bacterium remains unknown, but said that lab staff caught it in February during routine fecal-bacteria sampling. "This isn't something we normally test for," Strong told the paper.

Microsoft and Nvidia market sealed liquid loops as a near-zero-water alternative to evaporative cooling, an approach that is spreading quickly as AI data centers expand into more communities. Microsoft describes cooling systems that are filled once during construction and then recirculate the same water, while Nvidia's Rubin platform runs a coolant that is 75% water and 25% propylene glycol. That one-time fill, however, is the step that produces a discharge, and the flush water leaves the site before the loop is sealed.

Strong went on to add that the Board's concern extends past the finding of the bacterium, because closed-loop systems can carry glycol and other chemicals that municipal treatment plants aren't built to process. Cheyenne sprays its reclaimed water on parks, golf courses, and other green spaces, and the Board worried the bacterium could become an aerosol hazard during irrigation. Cupriavidus gilardii isn't a regulated contaminant, yet the discharge disrupted treatment sufficiently to trigger pass-through and interference findings under the Cheyenne City Code and federal pretreatment rules.

Meta said that it's supporting its general contractor, Fortis, which stopped discharging and began hauling wastewater offsite, and that independent testing found no trace of the substance. Testing at the Dry Creek and Crow Creek facilities cleared in late June, and the reuse system is back online. Cheyenne City Councilman Pete Laybourn called the disclosure "a very, very unpleasant surprise." The Board hasn't said how the suspension affects other Cheyenne data centers still under construction.

Valar Atomics activated its Ward 250 nuclear microreactor on stage during a live event, where it announced its partnership with Nvidia to power an AI factory. The company shared a portion of the live stream on its LinkedIn account, where one of its team members plugged an Nvidia RTX desktop unit into the reactor, which was then turned up to 37% of its full power to activate the Blackwell-powered PC. The company then showed off the nuclearwebsite.com page, which it says is solely run from a server that’s powered by that reactor. Its CEO, Isiah Taylor, claims that anyone can go to the website as long as the reactor is running.

“The Nvidia chip that Gabriel was just holding on stage is now plugged into a circuit in the OCS. That circuit runs through a cable into the reactor hall. In the reactor hall, 10 to 15th power uranium atoms are fissioning every second, producing 100 kilowatts of thermal energy,” Taylor said on the stage. “That thermal energy is being extracted by our cooling loop, the pressurized helium system, and the hot helium is flowing into a thermal electric generator (TEG). That TEG is creating the electrical current, which is right now powering Nvidia’s Blackwell chip, which is currently serving this website.”

Although the company claims that it’s the first startup to achieve power production, the Department of Energy says that two other firms, Deployable Energy’s Unity and Antares Nuclear’s Mark-0, have also achieved criticality, meaning these players are also on their way in making electricity using small modular reactors. Many AI tech giants and hyperscalers, like Amazon, Google, Microsoft, Nvidia, and Oracle, have invested in nuclear technologies as early as 2024, as they projected that AI data centers would require massive amounts of power.

This has become a major national issue recently, with data centers being blamed for massive increases in power and utility costs, as well as increased water consumption and a reduction in the quality of life in the communities that surround these developments. These problems have caused Americans to push back against these projects, with 7 out of 10 saying that they do not want a data center in their backyard. This resistance has led to the delay or cancellation of at least 75 projects in just the first quarter of 2026.

The public’s pushback and the resulting actions of local and state governments against power- and water-hungry data center projects are forcing both the private and public sectors to innovate. Aside from these SMRs, which will deliver the electricity demands of these data centers and other sites without affecting the national and local grid, Amazon, Microsoft, and Nvidia are also working on technologies that will cut down data center water use by up to 100%.

Residents of Memphis and Southaven, Tennessee, are eligible for a 50% discount on Starlink plans, as well as a waiver on hardware rental, as SpaceX’s way of investing in areas close to its data centers. According to the Starlink website, the discount would apply automatically based solely on the subscriber’s address, cutting the cost of a 100 Mbps plan from $55 (plus the $10 Monthly Kit Fee) to just $27.50. Even the most expensive Max plan, which could hit speeds of more than 400+ Mbps and costs $130 monthly (plus the $10 hardware rental), would drop to just $65.

SpaceX SVP for Starlink Michael Nicolls shared the news on X, saying, “The unique capabilities of the Colossus datacenters could not be accomplished without the partnership and support from the local Memphis community. Happy to bring affordable and great @SpaceX @Starlink connectivity to our neighbors.” Elon Musk also said in a post, “Half price Starlink for people in the Memphis region,” while sharing a post that talks about the discount. This is great news for users in the area who are already using Starlink or are planning to switch to it, but critics say that this is simply a PR stunt to help give the company a positive image as it faces lawsuits for air and noise pollution.

The Southern Environmental Law Center (SELC) has previously sued the company for the alleged “illegal” generators that it used to run the Colossus site, while another class action was filed last month over the “near-constant noise” and vibrations that surrounding areas experience from the data centers, according to PCMag. "Communities in Memphis and North Mississippi aren’t asking for discounted internet service,” SELC Senior Attorney Amanda Garcia told the publication. “They're asking xAI to shut down its illegal, unpermitted power plant that continues to pump out staggering amounts of harmful (sic) pollution, including smog-forming nitrogen oxides, fine particulate matter, and hazardous chemicals like formaldehyde.”

But even though the EPA itself said that xAI isn’t exempt from securing permits for its gas turbine generators, it seems that the community is on the back foot in this legal battle. This became apparent after the U.S. government asked the court to dismiss the lawsuit, saying in a legal memorandum that shutting down xAI’s generators “threatens American national, economic, and energy security by seeking to shut off the power supply for artificial-intelligence innovation that supports the Department of War’s military operations.”

The Starlink discount for the community surrounding SpaceXAI’s data centers would make it more affordable for users who have no access to reliable wired internet. However, Memphis and Southaven are both urban areas with no shortage of faster and cheaper wired fiber alternatives. AT&T and Xfinity offer 300 Mbps plans that only cost between $40 and $45 per month — about $20 more affordable than the discounted Starlink Max plan.

In yet another case of the AI-driven blues, 404 Media reports that Henrico County, VA, Manager John Vithoulkas sent an email to all county employees — including those in schools and social services — asking them to conserve energy by turning off unused lights and computers, using blinds to lessen heat buildup, and curbing or stopping the usage of heavy loads like space heaters.

That plea comes as the state's main power provider repeatedly hikes rates, and those repeated increases are linked to the rapidly increasing demands of data center buildouts. According to the report, Henrico County already has 37 data centers within its borders, and more are coming to the area.

The net result of this increasing demand is that Henrico County and other Virginia government entities covered by a collective purchasing body called VEGPA are facing a 24.9% rate hike starting next month, so every dollar that those local governments can save counts.

Those rising rates come from the fact that Northern Virginia has the world's highest concentration of data centers, numbering over 400 existing installations, and hundreds more are in the pipeline.

The region's proximity to Washington, DC, and the multiple submarine cables landing at Virginia Beach made it the perfect spot for byte collection, so much so that it's unofficially called Datacenter Alley.

Most Virginia counties with high data center concentrations are served by Dominion Energy, and that utility was feeding 26% of its power to data centers in 2023, a figure that certainly has increased substantially since then, especially considering that large-scale builds are becoming the norm rather than the exception.

Dominion has continued expanding its infrastructure to keep up with the demand, a costly buildout that multiple entities decry as having been borne by households, despite the fact that data centers are in a separate rate class.

While Dominion claims the price hikes are due to rising fuel, infrastructure, and maintenance costs, homeowners and consumer-focused entities believe otherwise. Northern Virginia residents have seen their bills increase multiple times in the past three years, leaving them fuming, especially in the winter. Adding insult to injury, the bill for a new $1.47 billion gas storage facility was recently passed onto consumers.

A researcher at the Energy and Policy Institute thinks that the new gas plant wouldn't be necessary without data center-driven demand, and a representative of the Virginia Energy Consumer Alliance thinks that the added fuel costs are fully passed onto customers.

Dominion does argue that data centers pay more in upfront costs, but it's hard not to see the shape of a feedback loop in which the grid is expanding to meet the needs of the expanding data centers, with regular Joes and Janes left to foot a chunk of the higher bills.

The boom in data center construction meant that millions of dollars’ worth of servers, cabling, and other parts and components are on the road at any given time. Because of this, cargo thieves and hijackers have started targeting these high-value items. Business Insider reports that a trailer containing about $300,000 worth of copper wire spool, which can be used for powering data center servers, was recovered last week by the Cook County Sheriff’s Office in a truck yard near Chicago. The truck yard owner also said that the same driver dropped off another stolen trailer a week earlier, this time containing about a million dollars’ worth of data center equipment.

Both trailers have been reported stolen — the former taken from Pine Hill, Alabama, and the latter from Jacksonville, Florida. The original locations where these trailers were stolen show the nationwide scale of these theft rings, which had previously mostly targeted retail goods. The trailer that contained the copper wire spools also had its tags replaced with one from Indiana, according to Freight Pulse, probably in an attempt to obfuscate its source. It’s unclear how the data center equipment cargo was discovered, but the trailer carrying the copper wire was located through its GPS tracker.

Data center equipment, especially servers, seems like a lucrative target, especially given how expensive these items are. However, they are also specialized machines that are often only bought by institutions and large companies, so thieves would likely have a hard time selling them on the black market. They also likely have serial numbers, which would make it easier for buyers to check the status of the equipment with the manufacturer. Given the cost required to invest in these things, buyers would most probably demand official receipts and warranties — something that thieves and fences won’t be able to provide.

However, consumer electronics are easier targets, and we’ve seen theft rings hit consumer electronics before. For example, about $1.4 million worth of Switch 2 consoles en route to a GameStop branch in Texas were stolen from the back of a semi-truck last year. Gaming GPUs are popular targets for theft rings, too, with a shipment of EVGA 30-series GPUs stolen from the back of the truck in 2021 appearing in Vietnam a few months later, being sold by a major retailer at a discount. Another set of MSI RTX 3090s was also lifted directly from the company’s China factory in 2020, with the 220 GPUs estimated to amount to $336,500.

There are probably more incidents of theft that have been reported to the police but not publicly known. And although the value of the stolen goods could be staggering for the average person, companies and freighters often have insurance coverage, so they don’t have to worry about paying out of pocket for the entire loss.

The AI boom has already been responsible for soaring demand and subsequent shortages in the areas of GPUs, computer memory, storage (both spinning and solid-state), electrical power, water, and networking equipment. The latest bottleneck may be the people needed to build the data centers themselves.

Asked by Bloomberg TV whether demand for data center construction was slowing, construction industry CEO Benoit Bazin said activity remains strong, but then identified labor as one of the industry's key bottlenecks. The executive, whose company Saint-Gobain supplies construction materials and building products used in hundreds of such projects, argued that labor shortages are already affecting projects in North America and are beginning to emerge in Europe as well.

Bazin mentioned the issue only in passing during his Bloomberg appearance, but his comments point toward what is becoming an increasingly important challenge for the AI infrastructure boom. The global race to build new computing infrastructure has hyperscalers like Amazon, Microsoft, Google, Meta, and Oracle collectively committing hundreds of billions of dollars toward new facilities, but constructing a modern AI data center requires far more than just money.

As we've reported many times before, power availability is the primary constraint facing new projects. Electrical substations, transformers, transmission infrastructure, utility connections, and even generation capacity itself are already struggling to keep pace with demand. However, a growing number of executives and analysts now argue, like Bazin, that skilled labor may be emerging as a significant secondary bottleneck.

You see, unlike conventional commercial construction projects, data centers require large numbers of specialized workers. You can't simply rely on standard commercial construction crews for this stuff; you need highly specialized tradesmen, like electricians, high-voltage technicians, fiber-optic installers, HVAC specialists, controls engineers, and commissioning teams, among many others. Huge swaths of these jobs require years of training and experience, making it difficult for the labor pool to expand as quickly as AI investment has ballooned.

The problem has become serious enough that some technology companies have begun funding workforce development efforts directly. Earlier this year, Meta partnered with CBRE on a training initiative intended to help expand the pipeline of workers qualified for data center construction and operations, reflecting concerns that labor shortages could eventually slow deployment schedules.

The effects may already be spilling into other sectors. We recently highlighted how demand from large data center projects has increased competition for electricians in Texas, contributing to delays in some residential housing developments as contractors struggle to compete with the wages and budgets offered by hyperscaler-backed projects. While housing obviously won't be displaced entirely, that story is an example of how AI infrastructure spending is increasingly competing for the same pool of skilled tradespeople needed elsewhere in the economy.

Also, labor is only one of several non-technical challenges facing new projects. Public opposition has become increasingly visible in some communities, particularly as residents raise concerns about electricity consumption, water usage, noise, and the broader impact of large-scale data center developments. Looking again to Texas, where numerous projects have been proposed or announced, opposition to new facilities has become a recurring topic of debate. Concerns that once focused primarily on industrial facilities and energy projects are increasingly being directed toward data centers as well.

Demand for new facilities remains strong, and few observers actually expect overall construction activity to slow significantly in the near term, but building the infrastructure required to support the next generation of AI systems means solving a growing list of problems, from power generation and grid capacity to permitting, community opposition, and now, increasingly, workforce shortages. The industry has largely solved the problem of attracting capital. It can order more GPUs, buy more land, and sign larger power contracts. Producing thousands of experienced electricians and technicians, however, takes years. As the global data center boom continues, that shortage may prove to be one of the industry's most stubborn constraints.

AI GPU maker Nvidia just announced a “hotter than a hot tub” liquid cooling system that it says will cut water and electricity use. According to the company, this new solution will run coolant — composed of 75% water and 25% propylene glycol — at 113 degrees F (45 deg C). By comparison, the water in hot tubs hovers at 100 to 104 degrees F (38 to 40 deg C). This feels counterintuitive, but the company says that the “cool” water is enough to handle the heat generated by Nvidia’s Rubin chips and exit the system at 131 degrees F (55 deg C).

Traditional water-cooling methods, especially those that use chillers, often account for nearly 40% of a data center’s power consumption. Aside from that, these systems must often deal with water loss through evaporation. On the other hand, air-cooled facilities also use a considerable amount of electricity, plus they also generate noise pollution. On the other hand, Nvidia says that this new solution uses a lot fewer resources because of its higher base temperature.

Since 113 degrees F is often higher than ambient temperature, data centers can simply rely on outdoor dry coolers to expel the heat to the environment. This is also a closed-loop system; Nvidia claims an up to 100% reduction in water consumption — it’s “filled once and runs closed for the life of the facility.” This solution is most effective in regions with cooler climates, but it should still be effective in warmer areas as long as the ambient temperature is below 113 degrees F.

Data centers that face occasional temperature swings that exceed this limit may still be required to turn on their chillers. Nevertheless, this should still reduce resource consumption, as it only needs to run them a few times per year. Aside from that, this should also allow these systems to run more efficiently, as the chillers don’t have to work as hard to hit the target temperature. It’s estimated that increasing a chiller plant’s target temperature by 1.8 degrees F (1 degree C) would reduce electricity costs by 4%. This means that data centers would save significantly on power consumption if they set their chiller units to the 70 to 75 degrees F (21 to 24 degrees C) that traditional chillers run, according to Vertiv, to the 113 degrees F (45 degrees C) that Nvidia recommends for its Rubin chips.

This solution addresses several of the issues that many local governments raised that led to the delay of more than 75 data centers earlier this year. However, it will likely take time for this cooling system to roll out to new and existing projects, so we expect the delays and resistance to continue until Nvidia’s liquid cooling system gains wider adoption. Furthermore, this only addresses the water use of the data center itself — the GPU servers themselves still require massive amounts of electricity.

Unfortunately, most of the power used by data centers, at least in the United States, comes from fossil fuel power plants, which themselves consume a lot of water. Developments that aren’t tied to the grid and get their electricity from natural gas turbines may not need as much water, but residents are concerned about the pollution they generate. Still, this new cooling solution is a step in the right direction to help make AI more sustainable.

The Chinese government quietly approved the Space Computing Industry Innovation Center in early June, which aims to bring together rocket and satellite manufacturers, semiconductor fabs, and AI tech companies to build a space computing network. According to the Beijing government, this aims to “connect the entire industrial chain of space computing and boost the development of the satellite Internet of Things (IoT) sector. Research firm SemiAnalysis said on X that China made this move a week before Elon Musk announced his AI1 satellite, which will run AI workloads while orbiting in space.

The center is set to be officially launched later this month, and it will focus on six major research areas: highly reliable, heat-resistant space-native computing chips, high-performance hyper-interconnected space computing payloads, space computing satellite platforms and standard systems, space-based large models under constrained power conditions, integrated space-ground cloud-based measurement and control networking, and space computing power service-oriented and tokenized operations. These are designed to build an orbiting AI data center that will not rely on Earth-bound energy sources and will avoid the bottlenecks that many ground-based data center developments face today.

While Beijing made this quiet announcement earlier than Musk’s AI1 reveal, we should note that Elon already had technical details available during the interview. In fact, the world’s first trillionaire has been talking about compute in space since November last year and filed for a one-million-satellite Orbital Data Center System with the FCC in February 2026. Jeff Bezos is also getting into the game with the 51,600-satellite Project Sunrise set to operate in a sun-synchronous orbit.

What makes China’s announcement different, though, is that it’s making multiple companies work together to build a system. On the other hand, SpaceX and Blue Origin are going at it alone — the two companies are competitors, and it doesn’t look like they’re cooperating with each other to develop the technologies required for space-based AI compute. It even seems that the former is intent on vertical integration, with its new 11-million-square-foot (around 190 to 200 football fields) Gigasat factory and Musk’s TeraFab megaproject.

We’re unsure which technique will be more effective in the long run: having one or two companies pour massive resources into this megaproject (with its success or failure being solely borne by those firms) or making several smaller companies and institutions work together to build a Space Intelligent Computing Research Institute, with the output presumably available for use by Chinese firms. But one thing is certain: Beijing is taking space-based data centers seriously enough to pour resources into them — a significant move for a nation with ample excess electricity and available infrastructure to build power-hungry data centers.

Amazon employees Darius Irani, Patrick Schloesser, and Liesl Wigand, who are members of Amazon Employees for Climate Justice (AECJ), say that they’re currently being investigated by their employer for breaking company policy after they testified in favor of the Seattle data center moratorium. According to Bloomberg, the three were called to separate Zoom meetings with an HR staff member after the city passed its one-year AI data center ban, where they were told that the company was investigating concerns about their public comments. Staff say they were intimidated during calls, are being monitored at work, and may face possible termination.

The company said that even though the three were free to discuss their working environment, they’re not allowed to speak as its representatives. “As we looked more closely at how these employees represented themselves, and how their comments were received by others, it became clear that they may have been speaking in their capacity as Amazonians and not as private citizens,” Amazon spokesperson Margaret Callahan told the publication. “We believe it’s important to apply our policies consistently so, just as we would with anyone else, we’re investigating whether there was a violation of our policies and may or may not take action based on what we find.”

Legal representatives of the three personnel said in a letter to the Seattle Office for Civil Rights (SOCR) that the investigations could lead to discipline, with one of them even saying that they could possibly be terminated. The lawyers argued that they were investigated by the company because of what they said when the Seattle City Council heard public comments on the measure, and said that Irani, Schloesser, and Wigand did not use company time when they made their comments, nor did they make any mention of their employer or shared propriety information.

The SOCR is a local government agency that enforces laws against employment discrimination, among other things, and the three affected employees are asking the agency to look into the situation. They alleged that they were intimidated during the Zoom meetings and complained about being monitored while they were at work. This also isn’t the first time that AECJ-affiliated workers faced an issue with Amazon. The company reportedly fired two people in 2020 who were part of the group’s leadership for putting a spotlight on Amazon warehouse workers’ safety (or lack thereof) during the pandemic.

Amazon says it is just investigating the situation and hasn’t made a decision yet. However, news like this will not do any good for the company and industry in general, especially as they gather bad press because of their AI data center projects. While the company has been trying to put its good side forward, like comparing its water consumption with other hyperscalers to highlight its high water efficiency, it still cannot shake off the perception that it could cause higher electricity costs, reduced water pressure, and noise pollution, among others.

The U.S. Federal Energy Regulatory Commission (FERC) is taking steps to ensure that AI data center operators are connected to the grid as quickly as possible. According to Bloomberg, the energy regulator is about to release an order asking grids to prove that they’re expediting AI data center connections, especially projects that “bring their own power, or curtail demand during times of high stress.”

“We promised some fireworks last month and we’re going to light the fuse today,” FERC Chairperson Laura Swett said in a meeting, Bloomberg reports. Commissioner David Rosner also said that any studies to enact these changes that grids will do must be completed in 90 days. These moves are in line with President Donald Trump’s “AI Action Plan” policy roadmap that he launched last year, which seeks to make it easier to build AI infrastructure.

Data centers need massive amounts of electricity — something that the U.S. grid is poorly-equipped to handle. Because of this, grid operators invested heavily in upgrading their infrastructure and then passed on their costs. PJM Interconnection, which is the largest power grid operator in the U.S., raised its power costs by 75.5%, with this increase largely blamed on AI data centers. The State of Maryland also filed a complaint with the FERC, as PJM Interconnection planned to charge it $2 billion for infrastructure upgrades needed for projects that do not directly benefit the state..

But despite FERC’s condition that data centers should bring their own power or reduce demand as needed for them to qualify for fast-track processing, this will still likely be a cause for concern for many Americans who are increasingly resisting data center developments in their backyards. After all, it’s not just power consumption that many communities are concerned about. Many data center developments are also being built in drought zones, where water shortages are already an ongoing concern. Some people are also concerned about the noise pollution that these facilities bring to otherwise quiet rural areas.

AI hyperscalers are keen to get their data center projects off the ground, especially as the demand for compute is still growing. The White House also wants these developments to go full steam ahead, especially as it deems that this infrastructure is crucial for the U.S. to win the “AI race” against China. But as long as citizens feel that these projects will threaten their quality of life, data center developers will only continue to see increasing opposition.

The city of McMinnville in Warren County, Tennessee has just passed an 18-month data center moratorium, allowing the city to determine the “electrical grid capacity, water and stormwater impacts, environmental and public health concerns, noise, and community fit” of these projects before even giving them the chance to apply for a permit. The Tennessee Lookout also listed several other bans that have recently been enacted or are under deliberation, like the larger Warren County, which is planning to vote on a temporary ban over its entire jurisdiction on the 22nd.

Aside from this area, other rural counties have passed moratoriums or are in the process of debating one. Coffee County, which sits adjacent to Warren, passed a data center ban at the same as McMinnville, while Knox County will vote on the issue on the same day as Warren County makes its decision. Even Nashville, the capital of the State of Tennessee, has passed a moratorium bill on its first reading with only a lone dissenter among the 40-member Metropolitan Council.

Tennessee is currently home to 63 data centers, according to the Data Center Map, with Elon Musk’s massive Colossus and Colossus 2 data centers located in Memphis. However, it seems that Tennesseans are pushing back on these developments, as several counties are considering and passing temporary bans. This is especially true for rural areas, where many data center developers take interest because of cheaper land, less regulatory friction, and weaker resistance.

“I think that they’re aiming these at … these smaller places in Tennessee because our land is so cheap, our laws are so lenient, the income isn’t taxed like it is anywhere else, and generally they’re just not going to get a lot of pushback, because a lot of people don’t know what’s going on, and they don’t know anything about this,” Kai Sage, a resident of McMinnville told the publication. “Luckily, a lot of people around here were informed, so as soon as we alerted people about this, people quickly reacted.”

These bans are not permanent, though. Instead, they’re designed to give local governments time to assess how it would go about these developments, helping prevent potential disasters that data center projects can bring to the local community. “A moratorium is not a permanent ban. It is a responsible time-out,” McMinnville City Administration Nolan Ming posted on social media. “It gives us time to study the issues carefully, update our zoning and land use regulations, and make sure any future decisions are based on solid information, not rushed approvals.”

No U.S. state has enacted a data center ban yet. Maine’s legislature passed a moratorium in April that would have paused all developments until October 2027, but Governor Janet Mills vetoed it at the last minute because it would affect one well-supported project in Franklin County. Still, the number of bans and moratoriums across the country have been steadily increasing, with 69 jurisdictions enacting one as of May 2026. Even Seattle — home to AI tech giants Microsoft and Amazon — has passed a one-year pause as its studies the community impact of data centers.

Most of these are just temporary delays, as governments try to come to terms with the massive amounts of resources that these projects demand. However, this is also throwing a wrench into AI hyperscalers’ plans to build more compute, whose demand is only expected to go up as AI becomes more advanced and gets more widespread adoption.

Data center projects are being delayed nationwide as many opposition groups have successfully blocked their progress. According to Data Center Watch, a boutique research firm tracking data center development, at least 75 data center projects worth around $130 billion have been blocked or delayed across the nation in the first quarter of 2026 alone. By comparison, this is the same amount that was blocked throughout 2025.

This metric reflects the growing opposition to data centers across the United States. In late 2025, an Ipsos survey showed that nearly half of Americans didn’t want a new data center project near their neighborhood. However, this number jumped to 70% a few months later, indicating increasing resistance to data centers. Many of the concerns raised by residents include massive electricity price hikes, egregious water consumption, and potential noise pollution, among others. However, there have also been reports that Chinese users have been amplifying these issues while posing as Americans.

These concerns have resulted in numerous moratoriums passed in different jurisdictions. At least 69 local government units have enacted bans as of May 2026, with more joining the list since then. Seattle, the hometown of AI tech giants Microsoft and Amazon, is the biggest city to have passed a one-year pause on data center projects so far, affecting five proposed projects. It has even gotten to the point where Maine almost passed a statewide ban on large new data center projects until October 2027, with only the governor vetoing the bill because it affected one particular data center project.

Despite President Donald Trump’s push for AI development in the U.S., pushback against data centers has come from both sides of the aisle. While a few politicians have been pushing for data center development despite community opposition, many more have been listening to their constituents and passing regulations to halt or delay projects as they study how these projects could impact the community and mitigate any negative effects.

The number of projects being blocked across the nation is concerning for both the federal government, which is competing against China to gain the edge in AI technology, and AI tech companies like Anthropic, which is struggling to gain access to more compute. But if these developments damage the environment and the lifestyle of the people living around them, then it seems that Americans would rather do without them.

Data centers consume significant resources, often to the detriment of local communities. But while water use has been on the lips of those fighting back against data center deployments, the sheer scale of their impact wasn't entirely clear until recently.

Many new U.S. data centers are being built on drought-prone land, and their cooling systems, which seem to consume gargantuan quantities of water, only represent a small portion of their total water usage by 2050. So, what makes up this overall figure for water usage? Cooling, of course, plays a part, but ongoing energy demands and chip fabrication also make up a larger part of the story.

They're consuming how much?!

A recent Guardian report on water consumption cited figures from Xylem, a water technology company. That does raise some questions about the accuracy of the report, and led us to dig further into the numbers from other sources. Although they're not quite the same as Xylem's original reporting, they do paint a similar picture.

Quantifying the sheer amount of water data centers use isn't easy. Much of it depends on the specific hardware being used within the facilities, how they're cooled, and what the local grid infrastructure is like. In a recent MostPolicyInitiative report, it highlights that U.S. data centers in 2023 alone consumed 17.4 billion gallons of water. And that's before all the recent gigawatt+ scale data center projects kicked off. By 2028, direct consumption could increase by as much as 73 billion gallons as some of these new facilities come online.

But the keyword, there, is direct. The UNU Environmental Cost of AI's Energy Usage report from earlier this year highlighted how global data center electricity consumption required just under a trillion gallons of water in 2025. AI workloads account for around 20% of that, or 200 billion gallons. That equates to around 300,000 Olympic swimming pools. That share is projected to rise to 40%, or by 400 billion gallons, to a total of 600 billion gallons of water by 2030, giving it a global electricity demand in excess of the entire country of Nigeria and using enough water to supply 500 million people in Sub-Saharan Africa.

However, with 200 billion gallons of water (and counting) dedicated to AI workloads, how does that compare to other industries?

That's still a footnote compared to the or 26.4 trillion gallons used by U.S. agriculture in 2024 (as per USDA), but it is closing in on international oil refining numbers. OPEC produced roughly 86 million barrels of oil a day in 2024, and with a rough conversion of 0.4 barrels of water per barrel of crude, that's in the region of 550 billion gallons a year.

There are still industries using much more water than AI, and much more even than all the data centers combined. However, water use is growing dramatically, and it's not really coming from the increased cooling demands. It's coming from power demands and hardware manufacturing.

As Americans' feelings towards data centers sour and, in turn, increase their opposition to their development, addressing the growing water needs of these new deployments may be key for developers who want to see their projects reach completion. For residents facing water shortages, droughts, and water contamination, the danger is more existential.

Cooling innovation

For data center developers, the main way they've looked to address growing water demand from their facilities is to improve cooling. Moving away from evaporative to closed-loop, direct-to-chip cooling can have a huge effect on the water used in the cooling process.

That's a good thing. Indeed, Microsoft's Satya Nadella claimed that the company's newest AI data centers have cooling systems so efficient that they "can operate effectively with zero water consumption." He also compared these mega data centers to single restaurants in terms of annual water consumption.

For home PC enthusiasts, Nadella is talking about using the data center equivalent of an AIO watercooler, rather than just letting the hot water evaporate to cool it down. It's easily more efficient in terms of water usage, which is great from that direct-use perspective.

Closed-loop cooling is absolutely an important innovation in data center development, and combined with more exotic ideas like fanless liquid coolers and immersion cooling (perhaps even undersea and in-orbit deployments) could see data center cooling use very little water in the future.

But it's not the cooling that's the problem: it's the power being generated to run them. And the one downside to closed-loop cooling systems is it uses more power than evaporative cooling systems. As those power demands rise, so does the indirect water usage of these facilities.

Power is the issue

The vast majority of indirect water use by data centers by 2050 will be down to power generation, the Xylem study suggests, and if recent generations of GPU development are anything to go by, those power demands are going to be enormous.

Nvidia's Ampere generation A100 enterprise GPU had a TDP of 300-400W. An H200 of the Hopper generation has a TDP up to 700W. A Blackwell GB200 GPU can pull as much as 1,200W. The next generation Vera Rubin? That's now up to 2,300W per chip.

Once you start scaling these GPUs up to their full racks, the power consumption is extreme. Where traditional data center server racks consumed between 10 and 15 KW, the latest GB300 NVL72 designs could consume upwards of 150KW a piece. Vera Rubin might be more energy efficient, but its racks could consume upwards of 230KW each.

Data centers just weren't traditionally designed with this kind of density of energy demands in mind. Powering them alone will be an enormous challenge and require enormous quantities of water to do it.

However, other industries also consume far more energy than all data centers, and thus, consume more indirect water usage from power generation. For instance, steel and iron manufacturing, chemicals and petrochemicals, cement and glass manufacturing, and many other industries each use multiple times more power than all data centers combined.

Renewables, water recovery, and nuclear

For hyperscalers, the near-term solution to data center power problems has been to use (occasionally law-breaking) mobile methane jet turbines. These aren't too heavy on water consumption, but have their own environmentally damaging effects with heavy carbon emissions.

A longer-term solution to this issue, and hopefully the extreme indirect water demands of these facilities, will be a combination of renewables, nuclear power, and water recovery.

The Switch Tahoe Reno exascale data center shows how it can be done. It's a 650MW facility built in 2017 that uses 100% renewable solar energy. In Portugal, the SINES DC Start Campus is a 1.2 Gigawatt facility that's partially online and uses 100% renewables, as well as using seawater cooling to offset its water usage. Although many of the newer data center projects are far larger, as the price of solar deployment continues to plummet, it's certainly possible that data centers powered by renewables can be effective and profitable, without consuming such vast quantities of water.

Another option is nuclear energy. New, smaller reactor designs are making it possible to get these facilities online faster and with a more modular design. There's even the possibility of repurposing old aircraft carriers and submarines with onboard nuclear reactors to power data center facilities.

Data center developers know this is at least one path for the future. That's why they're rushing to secure access to key materials like Uranium.

The future of data center power, especially AI data centers, and the water that they require, is almost certainly some mix of renewables and near-site nuclear power.

As the mobile methane turbines popping up at data centers have shown, the developers will often just use what they can get their hands on. Perhaps alongside moratoriums and pauses in construction, data center protestors could make sure that if data centers are built in their local area, the developers should also be required to invest in water infrastructure to offset their ever-growing demands, alongside more renewable energy solutions.

An ongoing fight over a proposed data center sited just 50 yards from Nashville Zoo has escalated further, with the zoo’s land use attorney filing a zoning appeal to overturn permits already approved for developer DC BLOX. An opposition petition has already passed 331,000 signatures, with Grammy-winning country star Brad Paisley calling the project "an absolute nightmare scenario" in a video posted to Instagram over the weekend.

The pressure now shifts to the Metro Planning Commission, which is set to hold a public hearing Thursday, June 11th, on legislation that would ban data centers larger than 500,000 square feet across Davidson County and keep smaller ones at least half a mile from homes, schools, and zoos. The 69,220-square-foot facility at 648 Grassmere Park would draw an estimated 50 MW from the local grid, and the zoo argues its noise and light could disturb vulnerable species, including clouded leopards it is working to conserve.

Bill BL2026-1391, filed by District 20 Councilmember Rollin Horton and passed after a first reading earlier this month, will create Nashville's first zoning rules for data centers, according to the local news outlet WKRN. Facilities over 500,000 square feet would be prohibited outright, while those between 100,000 and 500,000 square feet would need Board of Zoning Appeals approval following a public hearing. All data centers would have to run closed-loop cooling systems that don’t return water to the public supply, and smaller facilities would face buffer zones of 100 to 500 feet from homes, daycares, churches, parks, and other data centers.

It's been reported that the bill will also look to restrict the use of backup generators to emergencies and testing, and require developers to prove Nashville Electric Service has capacity before approval. Governor Bill Lee signed a separate state law last week requiring data centers to cover the cost of grid infrastructure upgrades their facilities need.

The DC BLOX project itself falls well under the size that the bill seeks to ban, and the company already claims closed-loop or waterless cooling for the site, but it’s the half-mile zoo buffer that’d be the blocker should it come to pass. The zoo told NBC News that land use attorney Bill Herbert, a former Metro Codes Director, filed the appeal to overturn DC BLOX's approved permits.

"As we move forward, we have taken the next step in our fight against the proposed data center," the zoo said in a statement to NBC News, confirming that land use attorney Bill Herbert, a former Metro Codes Director, filed the zoning appeal to overturn DC BLOX's approved permits. A company spokesperson told the outlet the facility “would not be an AI factory placing a burden on local resources” and sits on land that previously hosted a data center, though he couldn't say what the new facility would be used for or whether AI companies would be customers.

The standoff in Nashville fits a pattern of opposition to new data centers we’re seeing nationwide. A Gallup survey from last month found that 70% of Americans oppose data centers built near their homes, and Seattle is set to pass a one-year moratorium on new AI data center construction. If Horton's bill passes, Nashville would have some of the strictest siting rules of any major U.S. city, written in direct response to a facility too small for most AI workloads.

Samsung Heavy Industries signed a three-way agreement with Greek shipowner Capital Clean Energy Carriers and classification society Lloyd's Register at the Posidonia shipping exhibition in Athens earlier this month to commercialize a 50MW floating data center, according to Chosun Biz. The deal followed the signing of a joint development agreement between the shipbuilder and Supermicro to verify whether AI servers can run reliably on water, with the design pairing seawater cooling with LNG-fueled fuel cells for onboard power. Under the proposed business model, shipowners will buy the platforms and lease capacity to operators on long-term contracts, much like how they charter tankers.

The memorandum of understanding splits the work three ways: Samsung Heavy handles technology and construction, Capital leads project sourcing and investment, and Lloyd's Register covers regulation and certification. Samsung Heavy signed a second memorandum with consulting arm Lloyd's Register Advisory covering feasibility studies and an assessment of the North American market.

Receiving approval in principle from the American Bureau of Shipping and Lloyd's Register in April, the 50 MW project can draw external power through subsea cables when moored in ports or coastal waters, or generate its own using solid oxide fuel cells running on LNG, sidestepping long grid connection queues that have stalled land-based projects in the U.S. and Europe. Jerry Kalogiratos, CEO of Capital Clean Energy Carriers, said in Lloyd's Register's announcement that floating data centers offer "a scalable and flexible solution, with the unique advantage of mobility."

Meanwhile, the agreement with Supermicro is designed to address the question of whether precision AI hardware can tolerate environmental factors like vibration, tilt, salt, and humidity over a multi-year service life. Samsung Heavy will develop offshore positioning control and technologies to seal out salinity and moisture, while Supermicro validates server operating conditions in river and marine environments. The shipbuilder is leaning on its floating LNG production facility experience to integrate power, cooling, networking, and safety systems into a single hull.

Besides Samsung Heavy, Japan’s MOL is also building a 73 MW floating data center with Karpowership for a 2027 deployment, China's 24MW subsea facility off Shanghai entered full operation last month, and Nautilus Data Technologies operates a much smaller 6.5MW barge at the Port of Stockton, California. Samsung Heavy also has a potential anchor tenant, having signed a letter of intent with OpenAI in October alongside Samsung's 900,000-wafer-per-month Stargate memory commitment, covering joint development of floating data centers. To date, however, there’s no signed customer contract for a named deployment.

China is drafting a plan to spend roughly 2 trillion yuan ($295 billion) over five years on a nationwide web of AI data centers. The goal is for at least 80% of the underlying technology, AI chips included, to be sourced from domestic suppliers such as Huawei, according to a Bloomberg report citing people familiar with the discussions.

The National Development and Reform Commission is responsible for the blueprint of this network, while state carriers China Mobile and China Telecom will operate most of the facilities and link them up to a single computing grid by 2028. The build-out of this grid leans heavily on sovereign debt and ultra-long special government bonds. Folding in power grid upgrades could push the total capital requirement beyond 5 trillion yuan, those sources told Bloomberg.

Funding the build-out is easy, though; filling them with domestic accelerators is a different story. The 80% domestic sourcing requirement effectively locks out Nvidia and AMD accelerators, so China will be capped by whatever amount of chips SMIC can physically produce. The foundry’s most advanced stable node remains its N+2 process, which is roughly equivalent to 7nm and is currently running above 93% utilization, leaving little headroom as every government-certified Chinese chipmaker competes for the same wafer slots.

Another major chokepoint is high-bandwidth memory. Highly limited domestic HBM supply constrains how many Ascend-class accelerators Huawei can assemble. Huawei alone shipped around 812,000 chips last year and projects some $12 billion in processor revenue for 2026, a pace that its own supply chain has struggled to sustain. It’s estimated that China’s domestic suppliers will cover only around 76% of all Chinese AI chip demand by 2030, even as that market grows toward $67 billion.

Beijing has massively tightened its restrictions on foreign silicon in a series of new controls. Last August, Beijing introduced a requirement that data centers source at least 50% of chips locally, and by November, state-funded projects were barred from foreign accelerators entirely, with builds less than 30% complete reportedly told to strip out Nvidia, AMD, and Intel parts.

China's own industry has questioned whether domestic hardware can keep pace. SMIC co-CEO Zhao Haijun has cautioned that the rush to add capacity risks leaving data centers idle, comparing it to building highways ahead of the traffic. Chinese chip executives have separately conceded the country trails the leading edge in AI data center silicon by five to 10 years. When DeepSeek was steered toward Huawei hardware for model training, it eventually reverted to Nvidia hardware, lending credence to the idea that domestic parts still struggle with the heaviest training workloads, even where they suffice for inference.

Elon Musk has laid out the first detailed design of SpaceX's AI1 satellite in a 30-minute video posted to the company's X account, the opening generation of an orbital craft SpaceX wants to build by the million to run AI workloads off Earth's power grid. Carrying a 150 kW peak compute payload across a 70-meter deployed wingspan, the spacecraft uses an interchangeable hardware design that lets different chipmakers supply the processors. The timing of this announcement is no accident, coming just three days before SpaceX’s IPO, which is set to price on June 11th and trade on June 12th at a target valuation near $1.75 trillion.

In his announcement, Musk pegged the satellite’s compute payload at roughly the draw of a single Nvidia GB300 rack, which pulls around 140 kW on the ground. One AI1, in those terms, is about one rack in orbit. In terms of its overall specs, SpaceX disclosed an average compute payload of 120 kW, a peak of 150 kW, and a density of 70 kW per ton, with the craft operating at roughly 600 km.

A satellite with these specs comes with some serious space requirements, and its 70-meter deployed wingspan edges past the 68.4-meter span of a Boeing 747-8. As for the interchangeable compute, that leaves the platform open to whichever vendor ships the most competitive AI silicon, rather than locking it to a single supplier.

This interchangeability is no doubt important to Musk, not least because SpaceX can’t yet guarantee its own supply of chips. The company is currently building Terafab, a chip fab that’s running as a joint venture with Tesla, while its S-1 IPO filing warns it can’t currently secure enough chips.

That aside, the elephant in the room is cooling: a rack on Earth sheds heat into moving air and circulating water, neither of which exists in a vacuum, where the only viable route is radiating it away as infrared. AI1 features up to 110 m² of deployable liquid radiators, as well as redundant pumping loops and integrated micrometeroid shielding. By comparison, the International Space Station’s ETACS rejects roughly 70 kW of heat — around half of what’s needed to cool a 140 kW GB300 rack — across 422 m² of radiator at a cost of up to $500 million, according to SemiAnalysis.

Musk has previously waved off potential thermal critiques, telling SpaceNews back in March that it's "safe to say SpaceX knows how to do heat rejection in space" and pointing to the company's fleet of more than 10,000 Starlink satellites.

SpaceX filed with the FCC in January to launch up to a million orbital data center satellites and has already signed compute deals, including a $920 million-per-month agreement with Google. The model has prominent skeptics: OpenAI's Sam Altman called orbital data centers "ridiculous" earlier this year.

SpaceX has announced a new 11-million-square-foot Gigasat factory in Bastrop, Texas, dedicated to building the infrastructure needed to achieve the company's orbital data center goal. In an internally conducted interview posted on X on June 8, SpaceX CEO Elon Musk confirmed that the facility is expected to begin producing complete "AI satellites" by 2027. The company is targeting 1 gigawatt (GW) of orbital AI compute capacity by the end of next year, with plans to scale that figure by an order of magnitude annually thereafter.

During the interview, Musk unveiled the build and specs of the proposed AI1 satellite, the company’s take on orbital data centers. The satellite will span roughly 70 meters (229.66 feet), with a massive solar array — generating power at a density of 250 W/m² — making up the bulk of the structure. AI1 will also feature vertically oriented, double-sided radiators for cooling, with the 150-kilowatt (kW) peak compute payload positioned right in the middle of the structure.

The massive 11-million-square-foot Gigasat facility — more than ten times larger than Starfactory, SpaceX's current largest spacecraft manufacturing complex — will vertically integrate much of the AI1 satellite supply chain on a single campus. The facility will manufacture solar ingots and wafers, solar cells, printed circuit boards (PCBs), silicon-based electronic components, user terminals, gateways, and the AI1 satellites themselves. The 1,000-acre site will also include dedicated satellite development and testing facilities, warehousing and logistics infrastructure, and a large-scale AI satellite production line.

According to Musk, the solar manufacturing facilities are already under construction, while the AI satellite production building is about to break ground. SpaceX expects to be producing a "reasonable volume" of these orbital data centers by the end of 2027. While each satellite will carry 150 kW of compute power, the company aims to achieve 1 GW per year of space AI compute in that same time. That would mean launching on the order of more than 6,000 AI1 satellites in a single year. For context, Starlink has about 10,500 active satellites as of June 2026.

Musk hopes to scale to 100 GW per year by 2030 and even has eyes on Terrawatt-level computing, completely solar-powered in space. "This is what we are going to try to do and think we probably can do, which is to get to roughly an annualized rate of a gigawatt per year by the end of next year at Space AI compute. And then aspirationally, scale that by an order of magnitude per year. So in two and a half years, hitting an annualized rate of 10 gigawatts a year at Space. And three and a half years, maybe 100 gigawatts," he said, while also expressing a desire to one day scale to a terawatt per year, depending on progress in chip making.

The largest AI data center anyone has actually announced is Meta's Hyperion in Louisiana, designed to scale up to 5 GW and house roughly 2 million GPUs at full buildout, at over $100 billion — and even that only reaches its first 2 GW phase by 2030. xAI's own Colossus 2 in Memphis just expanded to nearly 2 GW of capacity, with 555,000 GPUs, for about $18 billion, making it the world's largest single-site AI installation. So 100 GW/year is approximately 20 Hyperions or 50 Colossus-2s per year.

Achieving this will take an unprecedented volume of chips, and Musk's answer is Terafab — a SpaceX/Tesla/xAI venture in Austin aiming to fab 1 terawatt of compute a year, roughly 100 to 200 million advanced chips, in a 100-million-square-foot plant. However, the project itself is being met with widespread skepticism. For starters, none of the three companies has ever made a chip, yet they're starting at the bleeding-edge 2nm node. Our in-depth Terafab industry analysis explores various other reasons why this skepticism is valid.

Multi-Gigawatt ambitions aside, Gigastat is a significant step towards orbital data center goals that are increasingly seen as a potential viable solution to the extreme power consumption of on-ground data centers. Not unexpectedly, SpaceX is leading the race. Manufacturing solar arrays, wiring, and satellite bodies at volume is largely conventional work — much of it built on technology SpaceX already produces for its Starlink V3 satellites, just at far greater scale — which is part of why a 2027 production start is credible.

About two-thirds of the 809 data centers planned across the U.S. are slated for land that has been in drought over the past year, an analysis from The Guardian found this week. The research claims that 517 data centers are set to be built in areas classified as drought-stricken in the last year, according to the National Oceanic and Atmospheric Administration's (NOAA) National Integrated Drought Information System.

According to the report, data center cooling accounts for only about 4% of the additional water AI will demand by 2050, according to a January report from Xylem and Global Water Intelligence, while power generation takes roughly 54% and semiconductor fabrication about 42%. A UN University report published last week reached a similar split, putting 2025 data center electricity use at about 448 TWh.

The chips inside the racks, and the power to run them, account for the rest. A modern logic fab consumes between 2 million and 10 million gallons a day, and chipmaking can’t use ordinary water. Producing 1,000 gallons of the ultrapure water required by fabs takes roughly 1,400 to 1,600 gallons of municipal supply, so the input is lossy before a single wafer is etched.

TSMC's three Phoenix fabs, for example, are projected to draw a combined 16.4 million gallons a day once complete, in the fourth-driest state in the country. The company offsets much of that through on-site reclamation, rated at 85%, climbing toward 90%, but it’s still drawing water from an area where it’s already in short supply.

Data center operators routinely note that the sector uses a fraction of what agriculture does, but that’s only accounting for one of three legs. Only counting cooling excludes the fab and generation demand created by the same infrastructure, which is where most of the growth capacity is concentrated. A data center and the fab supplying its accelerators can sit in the same drought area and pull from the same groundwater, but only one of them will end up showing in the cooling figures.

A potential fix will be sealed, direct-to-chip liquid cooling. Nvidia rates its GB200 NVL72 system at up to 300 times the water efficiency of air cooling, but that figure covers the cooling loop alone. Those racks pull 120 kW to 140 kW each, and the Vera Rubin platform, arriving later this year, pushes a single rack toward 600 kW. More power per rack means more generation, and thermal and gas-fired generation is itself water-intensive, so rack-level water savings reappear at the power plant.

Meta's proposed Hyperion data center in Louisiana is one example. Closed-loop cooling here will be paired with the output of roughly 10 gas-fired plants, which consume water of their own to generate that electricity. So, on-site cooling water usage falls while the combined draw of cooling and generation rises, and as rack power scales toward Rubin's 600 kW, that combined figure will climb faster still.

Several states have started legislating around cooling, including California, Michigan, and Iowa, which are weighing mandatory water-use reporting. South Carolina and Kansas may require closed-loop systems, and New York lawmakers have floated an outright data center moratorium. Each measure targets the visible 4%, and leaves the fabrication and generation demand that drives most of AI's water growth untouched.

Back in 1999, 87 acres of land in Taylor, Texas, was donated (nominal fee $10) to the city by a farmer, with a condition in the deed that it would be used for community parkland. In 2025, the land was sold for $10M to a data center developer, who has won several legal battles against the nearby residents who are trying to stop the massive construction project, reports 404 Media. Now, the disgruntled locals are planning to take their case to an appeals court.

To introduce this case, let’s go back to 1999, when the $10 deed was inked. For some background, 404 Media talked to long-time local Pamela Griffin, who used to play on the farmland, and watched her children grow up and enjoy the same freedom. Griffin recalled that old farmer Mr. Bland used to talk to her father from time to time. According to her, Bland once said to her dad, “I see the kids don’t really have nowhere to play.” He continued, “I’m thinking about giving this land for parkland because these kids need somewhere to play.” The original July 1999 deed has since been unearthed, and the farmer did indeed follow through with his words. Now, let’s make the following chain of events simple using a bullet point timeline:

• Pre 1999 – a farmer’s promise to his neighbors,
• July 7, 1999 – Bland granted the land to the Texas Parks and Recreation Foundation, a public trust, for $10 on the condition it be used as a park,
• 2003 - Texas Parks and Recreation Foundation granted the land to another non-profit called the Williamson County Park Foundation,
• 2003, one month later, Williamson County Park Foundation gave the land to the City of Taylor,
• 2008 - the city of Taylor sold the land to the Taylor Economic Development Corporation (TEDC) for $15,000,
• 2025 – TEDC sold the land to data center developers Blueprint for $10 million.

This is quite a tale, and there appears to be a lot at stake for parties on either side of the dispute. In summary, locals face a multitude of undesirable side effects coming from having a data center in their backyard. There’s also the principle of the original deed being ignored, a big deal in Texas. Meanwhile, the council asserts that stopping this kind of development (in the city zone it is situated) is beyond its scope, and the millions in tax raised will benefit residents.

Griffin only found out about the planned 135,000-square-foot data center on the land when local organizers called around the neighborhood to raise awareness in 2025. She didn’t even know what a data center was at the time. Looking it up with her family, the idea of such a construction on your doorstep didn’t appeal.

Locals like Griffin became concerned about impacts to air, water, electricity, and noise. In correspondence with the City Council, they have been assured that work will be done to minimize health risks to people living nearby. Mitigations like a barrier wall, landscaping, closed-loop water cooling, and the developers building their own power substation were mentioned.

While folks might not want to live near a data center for the aforementioned reasons. It may also negatively impact the resale price of nearby homes. However, the City Council says that the expected extra $30M in tax revenue over the coming decade will be a positive for the area. With $20M earmarked for the school district.

Meanwhile, the council has also painted its situation as one where it is powerless to resist the data center development. This was made clear in a council website FAQ. 404 Media investigations revealed that this lack of power to change the course of the development is likely because of the property’s existing Employment Center zoning. The City can only regulate form, not function, it seems. However, the dev hasn’t yet secured the City’s approval for planning and building permits.

With the lack of satisfactory response from the council, Griffin and her family decided to hire a lawyer. There then followed a series of legal disputes, which, so far, have favored Blueprint. Nevertheless, Griffin and family members are filing an appeal with the Third Court of Appeals in Austin, Texas.

Land deeds are powerful documents in Texas. Activists opposed to the data center unearthed the original July 7, 1999, deed, which is shared on the 404 Media site. Indeed, we can see the legal document does stipulate that the 87.97 acres of land “be held in trust for future use as parkland.”

Central to Griffin’s determination to continue is the notion that “I’m not fighting just because of a data center. I’m fighting because this land was deeded for parkland.” Texas deeds need to be upheld, and the community should have a park, according to the resident.

SpaceX just announced that it closed a multi-year deal to provide compute capacity to Google. The agreement, which is worth $920 million per month, will begin in October 2026 and is expected to continue until June 2029. Reuters said that the transaction includes 110,000 Nvidia GPUs, plus CPUs, memory, and all other components needed for AI processing.

It appears that Elon Musk's company will not deliver the entire 110,000-strong GPU compute capacity in one go — Google will pay a reduced monthly fee as the company brings more server racks online through September 30, 2027. If SpaceX cannot hit the 110,000-GPU target on that date plus a one-month grace period, then Google can cancel the agreement or settle for the lower number of available GPUs “with a corresponding pro-rata reduction in the monthly fees.” It also gave the two parties the option to cancel the deal altogether after December 31, 2027, provided that they give a 90-day notice to the other.

This is the second major deal that SpaceX announced in months, as Anthropic secured the entire computing power of SpaceX’s Colossus 1 data center in early May. This was a surprising move, especially as Colossus 1 is one of the company’s most hyped assets, which Elon Musk launched in just 19 days. It turns out that launching it at such speed meant that it has a mix of H100, H200, and GB200 GPUs, which is resulting in efficiencies for training AI LLMs as the faster GB200 GPUs end up waiting for the older, slower GPUs before it can complete each computational step. Anthropic is instead using it for inferencing, especially as it is struggling to keep up with the demands of its growing user base.

The combined annual value of just these two deals is already worth more than SpaceX’s entire revenue for 2025. Reuters estimated that they would bring in more than $25 billion annually to the company, compared to the less than $20 billion that it made from Starlink, launch services, and AI revenue.

These massive deals, worth more than $70 billion in total, will lift SpaceX as it targets a $1.75 trillion IPO on June 12, 2026. While it started out as a space exploration company and is known for commercially launching satellites at a fraction of the cost compared to NASA and providing relatively affordable and stable satellite internet, it’s actively expanding towards orbital data centers. SpaceX acquired xAI earlier this year to help achieve that dream and has even filed some documents at the FCC detailing its plans. Google is also reportedly in talks with the company for a slice of the orbital data center pie.

Two city council committees just passed a data center moratorium in Seattle, making it the biggest jurisdiction in the U.S. to enforce a ban on these projects. According to The Guardian, the moratorium and an accompanying resolution must still go through a full council vote on Tuesday, June 9, 2026, but this is just a formality given the massive support that the data center ban has from the general public.

Several other towns, cities, counties, and areas in the United States have passed data center bans, especially as projects like these have increasingly become unpopular among Americans. Still, many didn’t expect tech-industry heavy Seattle to follow them in their footsteps.

Seattle mayor Katie Wilson first heard about the plan to build five large data centers near the city in April, after the Seattle Times broke the story. “That was the first that I, as the mayor, had heard about this,” Wilson said. “Both I and many of the councilmembers were happy to move toward a moratorium, especially knowing that there was really strong public support out there for that course of action.”

The city intends to spend the one-year hold on data center development to study its impact on the community surrounding it and what the local government should do to ensure that its constituents benefit from the project. This includes putting up pollution standards, determining energy connection requirements, setting contract terms, setting labor standards, and other regulations that will apply to data centers. Wilson also mentioned that Seattle will ascertain if these projects are a “good use of urban land” during this period.

Seattle’s residents supported the temporary moratorium, with more than 50 residents showing their support for it when the city hall opened public comments on the measure. Aside from increasing electricity bills and impacts on the water supply, some of the concerns that were raised at this time included the climate impact of data centers, especially behind-the-meter projects that are often powered by jet engines running on fossil fuels, noise pollution, and the conversion of arable land into sprawling campuses.

The city council’s decision to pass the one-year ban is in stark contrast to the actions of some politicians in other states that support data center developments despite opposition. For example, one Indiana mayor was caught on camera insulting his constituents who were against a proposed data center project in their area, while a Utah senator slapped the phone out of the hand of a reporter who was covering a story about the cases of harassment against his business because of his support for a 40,000-acre site in Box Elder County.

Scott Ferguson (R), the mayor of Shelbyville, Indiana, was caught on camera insulting community members who were opposed to a proposed data center project near the city. The mayor's office has been forced to issue a statement after he was secretly recorded claiming he had only seen 'No AI data center' signs in "sh***y," unkempt houses.

Shelbyville is a city of 20,000 people located around 30 miles southwest of Indianapolis International Airport and is the county seat of Shelby County. Fox 59 reports that its city council has advanced a billion-dollar data center proposal in the area, amid increasing resistance from the public.

“I’ve seen a lot of these all over town, but I only see ‘em in sh***y houses with sh***y,” Ferguson was recorded commenting on "No AI data center" protest signs. Another person cut him off and corrected him, saying, “You see them in working class houses.” The mayor then continued, saying, “most of them are rentals.” Another off-camera speaker said, “It doesn’t matter whether they’re rentals, they’re still human beings.” To which he answered, “Yeah, I know, but they’re unkempt properties.” It’s not clear if Scott knew he was being recorded.

These comments have understandably caused a lot of controversy, and the video has blown up online. One commenter said, “Tell us you aren’t getting paid under the table without telling us,” while another added, “Wow… So, we know who the expendable people are for him.” Another person said, “Disgusting behavior. Who insults their constituents?”

In response to this, the mayor’s office released a statement saying, “The Mayor regrets that his choice of words may have caused offense. His comments were intended to reference property maintenance and not the character, value, or importance of any resident, homeowner, or renter in our community.”

Ferguson’s offhand remarks are adding a lot of fuel to the fire against data centers. The project that the Shelbyville city council approved is a 429-acre site that will play host to 11 data center structures. Fox59 reports that more than 2,000 people signed a petition against the project, but were ultimately ignored by the council. Despite the city council giving it a go signal, the data center developer must still go through several other hoops before it can begin construction.

The majority of Americans are now against having a data center constructed in their community, especially as several issues of increased utility prices and poor water quality have been linked to recent projects.

It has gotten so bad that many town halls and meetings have become contentious, and a few politicians who supported data centers are becoming quite defensive. For example, one farmer was arrested for going a few seconds over the allotted speaking time and was charged with trespassing in court. A Utah State Senator also slapped the phone out of the hand of a reporter who was covering the public harassment against his employees for his support for another project in the state. Most worryingly, one Indianapolis politician had their home shot at by an unknown assailant who left a “No Data Center” sign after the incident.

With the debates around data centers becoming more passionate than ever, some U.S. authorities are now worried that “anti-tech extremists” will take advantage of the situation and execute acts of violence against AI data centers. On the other hand, critics say that this could lead to mass surveillance and even the criminalization of peaceful opposition to data center projects.

SpaceX has won a 100% property tax abatement from Grimes County, Texas, for its proposed, massive $55 billion Terafab semiconductor chip manufacturing facility. According to a local news outlet, KBTX, Grimes County commissioners voted 4-1 on Wednesday, June 4th, to approve both a reinvestment zone designation and the tax abatement, which will fully exempt SpaceX from property taxes tied to the project in exchange for a regular payment instead.

In exchange for the tax exemption, SpaceX will instead remit a lump sum of $10 million to the county, followed by $20 million annually for 35 years. The vote — centered on a three-part proposal for the SpaceX Terafab facility, consisting of an obligation framework for jobs and infrastructure, a Tax Increment Reinvestment Zone designation, and a 35-year PILOT tax abatement agreement — followed a hearing that drew in more than 100 residents to the Grimes County courthouse.

Proponents of the proposals, including local officials, argued that the project promises massive economic investment, job creation, and national security benefits. Conversely, residents opposed to the project cited a lack of transparency in the approval process, potential strain on water and power infrastructure, and the destruction of rural identity. Commissioner David Tullos, who cast the lone “No” in the vote, questioned SpaceX’s absence in earlier meetings, saying that the hearing was the first time it had sent a representative since the project was announced. Tullos also questioned the company about the size of the proposed reinvestment zone and the company's plans for portions of the land included within it.

Several residents reportedly expressed deep concern about environmental impacts and land loss amid tears. In response, John Federspiel, senior director of Starlink Product Engineering at SpaceX, said: "We recognize that large projects bring legitimate questions about infrastructure and environmental stewardship. Our company is committed to proactively ‌addressing those ⁠concerns and taking care of them responsibly.”

Despite an apparent majority opposition from residents who urged the commissioners to delay the vote on the tax abatement — which public records show SpaceX applied for just last month — all proposals passed. A number of local residents expressed disappointment in the outcome, with many insisting that a 100% tax rebate — for a company about to launch the largest IPO in history with an expected $1.75 Trillion valuation — was too far.

Defending the arrangement in an X post on Wednesday, SpaceX owner and world's richest man, Elon Musk, said that the exemption was necessary to remain competitive with other chip manufacturers. “The reason SpaceX asked for this, which is standard practice for massive capital investments, is because Terafab will have a large number of extremely expensive machines for making chips. Property tax on these crazy money machines would put us at a serious competitive disadvantage relative to other chip fabs in the world,” Musk said.

He also implied that the county stands to significantly benefit from the project. “Something that perhaps isn’t clear is that, if this location works out (other locations are still in the running), SpaceX will still be paying an annual amount that increases tax revenue for Grimes County by ~25% and will be by far the biggest source of revenue for the county,” Musk argued.

SpaceX is advancing the Terafab project as part of its plans to expand beyond aerospace into computing infrastructure and domestic chip production, a strategic pivot investors see as vital for future growth. The company already owns Colossus 1, a massive data center it rented out to Anthropic, and is currently building Colossus 2.

Microsoft CEO Satya Nadella has claimed that the company's newest generation of AI data centers uses so little water that its annual consumption is roughly equivalent to that of a single restaurant. Speaking at Microsoft Build 2026 on June 2, Nadella made the claim while outlining Microsoft's "Community-First AI Infrastructure" strategy aimed to address growing concerns about the impact of data centers on local communities.

"The cooling loop is filled once, and the data center can operate effectively with zero water consumption," Nadella said during his keynote, while describing how new architectures are redefining data center water consumption. "The daily water usage over the course of an entire year is roughly equivalent to what a single restaurant would use."

While Nadella did not specify the size or type of restaurant used for comparison, the claim is striking given the scale of modern hyperscale AI facilities. Industry estimates suggest that restaurants can consume anywhere from several hundred thousand to more than a million gallons of water annually, while 100MW+ hyperscale data centers have historically required tens to hundreds of millions of gallons of water annually for cooling, depending on climate, workload, and cooling design.

Nadella's statement — not the first time Microsoft has used a restaurant comparison — is based on Microsoft's new closed-loop liquid-cooling architecture. Traditional data centers often rely on evaporative cooling systems that continuously consume water to remove heat generated by servers and networking equipment. In Microsoft’s new approach, over 90% of the facility's cooling relies on a closed-loop liquid cooling system that is filled during construction and then continuously recirculates the same water rather than constantly consuming a fresh supply. The remaining portion of the cooling system primarily relies on outside air and only uses additional water in the hottest conditions.

The system works by circulating cooled water through heat exchangers connected to the AI hardware. As the water absorbs heat, it is routed to a massive chiller plant where large cooling fans dissipate the heat before the water is recirculated back through the facility. Because the water remains in the cooling loop rather than evaporating and being discarded, ongoing water consumption is dramatically reduced. This can translate to savings of multiple billions of gallons of water across Microsoft’s data centers.

The current reality is much more subdued. The new cooling design and its water savings are currently implemented only at Microsoft's Fairwater AI data center campus in Mount Pleasant, Wisconsin. On the other hand, the company has stated that the new cooling approach will become the standard design for future AI-focused data centers. Microsoft has confirmed that multiple identical Fairwater facilities are already under construction elsewhere in the United States as part of a broader expansion of its AI infrastructure footprint. The rollout forms part of Microsoft's longer-term goal of becoming water positive by 2030, meaning the company aims to replenish more water than it consumes globally, as part of its community-first strategy.

While the new cooling design will substantially reduce water use in future facilities, critics note that Microsoft already operates a vast global network of data centers. Azure now spans more than 500 facilities across 80 regions worldwide, many of which were built before Fairwater's cooling architecture was introduced.

Microsoft has not announced a comprehensive retrofit program that would convert existing data centers to the new closed-loop design. As a result, the "restaurant-level" water footprint applies primarily to newly built facilities that use the Fairwater blueprint, rather than to Microsoft's entire global infrastructure estate.

The debate reflects a broader challenge facing the AI industry. Companies, including Microsoft and Google, are racing to build ever-larger AI clusters while facing mounting public pressure to reduce their environmental impact, as communities grow increasingly disapproving of large-scale AI infrastructure projects. Google recently announced a series of water stewardship commitments of its own, including a pledge to replenish more water than its data centers consume by 2030.

U.S. Senator Bernie Sanders (I-Vt.) has announced that he will introduce a bill that would force the largest American AI firms to hand over half of their stock to the public. The senator proposes a 50% tax on the stock of these firms, which, it seems, will be held by the public through a sovereign wealth fund. It would also mean that the government would have a direct ownership stake in these companies, allowing the people to have a say in how these companies would run.

“The foundation of AI is our collective human intelligence. Our books, songs, artwork, journalism, computer code, scientific research, videos, conversations, images, and ideas spanning generations. As Sam Altman himself acknowledged, AI models were trained on our ‘collective experience, knowledge, and learning of humanity’,” said Sanders. He also added, “Since AI is built on the collective knowledge of humanity, the wealth it generated must benefit humanity. Not just Elon Musk, Jeff Bezos, Mark Zuckerberg, Larry Ellison, and other billionaires, or the venture capitalists and Wall Street firms who see AI as the next great wealth extracting machine.”

According to the senator, the biggest AI companies themselves have started this idea. OpenAI has already proposed a public wealth fund so that the public would benefit from AI-driven economic growth, while Elon Musk himself posted on X that “Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI.”

He then compared his AI sovereign wealth fund proposal to Norway’s Government Pension Fund Global and the Alaska Permanent Fund. Both are sovereign wealth funds whose proceeds came from their nations’ oil wealth — the former is now worth US$2.3 trillion and is used to fund the European country’s extensive public welfare system, while the latter has been paying out $1,000 to $2,000 to every Alaskan citizen annually since 1980.

Sanders’ proposal plans to combine the benefits that both Alaska and Norway deliver, while simultaneously forcing AI companies to hand over 50% of their ownership to the public through the government. This might seem a radical solution, but the senator is no stranger to extremes. He has previously called for a halt to all AI data center construction, saying that such a move “will give democracy a chance to catch up.” While a federal moratorium still hasn’t been approved, more and more jurisdictions across the U.S. are approving data center bans as communities are pushing back against their development in their backyards.

SoftBank Group will commit as much as €75 billion ($87 billion) to build five gigawatts of AI data center capacity across France, with a first €45 billion ($52 billion) phase delivering 3.1GW in the northern Hauts-de-France region by 2031. The Japanese group called it its largest AI infrastructure investment in Europe to date, with state-owned utility company EDF and France's Schneider Electric named as partners. Phase one covers three sites: Dunkirk's Loon-Plage, Bosquel, and Bouchain, and Masayoshi Son and President Emmanuel Macron are set to formalize the plan on Monday at the Choose France summit.

What France offers is electricity: the country draws roughly 70% of its power from nuclear reactors run by EDF, is the world's largest net electricity exporter, and posts industrial power prices well under half the UK's. Son told the publication La Tribune du Dimanche that France being a producer and exporter of energy was "absolutely decisive" for AI infrastructure spending. EDF is contributing to the Bouchain site, a former power plant, which it will hand over for conversion.

There’s a stark contrast between this and SoftBank’s American plans, where, to feed its planned 10GW data center in Ohio, the company has to build its own energy generation infrastructure in the form of a natural gas plant that’ll cost roughly $33 billion to build and generate roughly 9.2GW. France lets it skip that step and plug into an existing low-carbon fleet, sidestepping the strained grids and rising local opposition slowing U.S. buildouts.

With Schneider Electric, SoftBank plans to build an industrial cluster at the Port of Dunkirk, built around two plants, one run by SoftBank to make enclosures and one run by Schneider to integrate data center power modules

That pulls SoftBank's automation work into prefabricated electrical kit, extending the company’s vertical integration — which already spans Arm, robotics, and its own water-based data center batteries — even further. EDF chairman Bernard Fontana said in the announcement that the Bouchain project showed France's ability to host large-scale digital infrastructure on "competitive, sovereign and low-carbon electricity."

The French investment adds to a global spending run that includes the Ohio project and more than $30 billion sunk into OpenAI for an 11% stake. SoftBank carries over $130 billion in debt and took a $40 billion bridge loan in March to fund its latest OpenAI investment. The €75 billion figure is also a ceiling; only the €45 billion first phase and its 3.1GW are firm commitments, with the remaining sites described as plans for later.

Amazon has unveiled a new data center networking architecture that it claims delivers up to 33% higher throughput while reducing network power consumption by 40%, marking what the company describes as the first large-scale deployment of a flat network based on random graph theory, Wired reports. The company revealed that it had been quietly deploying the design in its data centers since last year, confirming that it has already become the default data center network for most AWS workloads.

The architecture, called Resilient Network Graphs (RNG), replaces the hierarchical networking structures that have dominated cloud data centers for decades with a flatter, quasi-random architecture designed to move data more efficiently between servers. Amazon says the design uses 69% fewer networking devices than traditional architectures and can reduce infrastructure costs by up to 45%, potentially translating into billions of dollars in savings across its global cloud footprint.

The company first deployed RNG in a Dublin data center in 2024 before expanding the architecture into facilities in Germany and Spain. AWS says the design is now being rolled out across most newly built data centers and will form the foundation of future deployments.

Data center and AI capability conversations typically focus on processing and storage. However, networking is one of the most important aspects of capability. Every request sent from your device to a cloud application, database, AI model, or storage service depends on data moving rapidly across thousands, or even hundreds of thousands, of servers. As facilities continue to grow, ensuring information reaches the right destination quickly and efficiently has become an increasingly difficult engineering challenge.

For decades, most large-scale data centers have relied on a hierarchical networking structure known as a "fat-tree" topology. In this design, data travels up and down layers of switches and routers arranged in a tree-like hierarchy. While the approach is proven and reliable, it can create bottlenecks and strain available bandwidth. Traffic can become concentrated at specific points in the hierarchy, even when capacity is unused elsewhere in the network. The approach also requires a large number of expensive networking devices.

Researchers have long theorized that a flatter network based on random graph principles could solve many of those issues. Instead of forcing traffic through predefined layers, routers are connected in a highly distributed mesh-like arrangement that creates numerous possible paths between endpoints. In theory, this will improve resilience, increase utilization of available bandwidth, and reduce the likelihood of congestion.

The challenge was making such a network practical. Although random graph networks have been subject to academic research for more than a decade, major obstacles have prevented their successful deployment at hyperscale. Routing traffic efficiently through such a network is considerably more complicated than routing traffic through a predictable hierarchy, and physically connecting millions of fiber-optic links without creating an operational nightmare presents an entirely different challenge.

AWS says it overcame those obstacles with two key innovations: software and custom hardware. The first is a custom routing protocol called Spraypoint, which distributes traffic across large numbers of available paths rather than relying primarily on the shortest path. The second is a passive optical device called ShuffleBox, designed to organize and standardize the immense amount of cabling required to build the network at scale.

According to Amazon, the resulting architecture not only moves data roughly one-third faster than conventional designs but also requires significantly fewer switches and routers. The company says those reductions lower both capital expenditures and operating costs while simultaneously reducing power consumption.

AI models are growing larger and more capable, and so are their user bases. To sustain this growth, hyperscalers have to continue optimizing the entire technology stack. Faster chips remain crucial, but so are advances in cooling, power delivery, storage systems, optical interconnects, and networking. AWS believes RNG is one such advantage. The company rightly considers the achievement of deploying random graph theory at scale, “a breakthrough that will deliver greater reliability and performance for AWS customers, save billions of dollars in hardware, and lower CO2 emissions.”

The region of Lombardy, Italy, which has Milan as its capital, just approved a 100% tax on data center developments in rural areas and a 200% tax for those being built in agricultural and green zones. According to the Italian news outlet Il Sole 24 Ore, the law was designed to discourage hyperscalers from buying up rural tracts of land for projects like these, which Lombardy leaders say are often done “without clear timeframes and plans.”

“We cannot, in the light of these numbers, block the development of companies and employment, the race for artificial intelligence is already a fact,” Lombardy councilor Massimo Sertori told the publication. “We can, however, try to keep the phenomenon under control by avoiding excesses and the exaggerated exploitation of the territory.”

It seems that even data center developers in Europe have started gaining interest in rural land. Even though these are often less developed compared to urban and suburban areas, it also usually comes with fewer restrictions, are cheaper to build on, and might even have a faster permitting process. One Texas county noticed this and has taken steps to limit AI hyperscalers’ ambitions while the county government is studying their potential impact on rural land. On the other hand, Italian lawmakers are hoping that the law will push developers toward disused industrial zones. These areas are typically built for operations like these, and there are no additional burdens for AI data center developers who choose to build here instead.

Aside from land use, Lombardy officials also have concerns about energy use. Sertori said that data center applications have now reached up to 30GW throughout Italy, with more than half of them planned to be situated in the region. However, they should only authorize 2GB based on “real and concrete projects.” At the moment, Milan hosts 33 active data centers, with 10 more in the construction stage and 23 more applying for approvals. This makes Lombardy the region with the highest concentration of data centers in Italy.

The data center buildout needed to power the “AI revolution” is quickly becoming a hot topic in the United States. Many Americans are pushing back against these developments, with a recent survey saying that 70% do not want a data center in the vicinity of their homes. While it doesn’t seem that Italians are pushing back with the same ferocity, their authorities are still concerned that unchecked data center development would have a negative impact on the community. Opposing politicians even voiced their concerns that this move is not enough.

“In Lombardy, we have tried to fill the void of the Meloni government on industrial policies. The development of data centers is necessary, but it cannot be left to chance or to the market alone; a political vision is needed,” Democrat Mattero Piloni said. “However, this law lacks real and decisive soil protection, because neither the government nor the region have put in place stringent constraints. We will have to wait for a national law.”