Cancellations and delays of new US datacenters have increased as the artificial intelligence boom runs up against a slate of issues, including supply chain snags, energy shortages and tariff-induced restraints.
Grassroots opposition from local communities has also derailed some plans, and some investors have grown wary of datacenters amid fears of an AI bubble.
Dozens of plans for datacenters were killed or delayed in December or January, according to reports from the investment research firm MacroEdge and climate news outlet Heatmap. MacroEdge’s research identified 26 cancellations through January – up from one in October.
The complex knot of issues raises questions about the US’s ability to quickly facilitate the datacenter boom. Because the increase in production has been powering US growth over the last 18 months, major delays could have broader economic implications, MacroEdge’s chief economist, Don Johnson, wrote.
“The [Trump] administration is going to be scrambling to find its next growth engine as the datacenter machine winds down as a tailwind,” Johnson wrote.
Dozens of proposals for new hyper-scale datacenters, which house the infrastructure for artificial intelligence, have been proposed across the US. The centers can consume as much power as the largest US cities, meaning grids need to rapidly expand their infrastructure, adding transformers, circuit breakers, high-voltage cables, steel poles and other pieces of equipment, to connect datacenters to the grid.
Connecting to the grid is “the No 1 challenge we’re seeing”, Marsden Hanna, head of energy and sustainability for Google, said at a utility industry conference last month.
“We have utilities in many markets telling us four or five, sometimes 10 years to interconnect,” Hanna said, adding that one utility told Google it would take 12 years just to study the interconnection timeline.
While the reports suggest an increase in cancellations, tracking the number of proposals and cancellations is difficult, said Douglas Jester, managing partner at the 5 Lakes Energy consulting firm in Michigan, which works on regulatory issues around datacenter construction.
No agency keeps tabs on proposals, and the datacenter planning process is long and complex, Jester said. When a datacenter developer such as Google or Oracle wants to build a facility, it approaches energy utilities in multiple regions to study cost and how long it might take to connect to the grid.
Developers often propose the same plans in multiple locations around the US and move forward where the costs and conditions are most favorable. That makes it difficult to gauge exactly when a project is legitimately under way. Regardless, centers are increasingly running up against mounting energy grid obstacles, especially a shortage of energy, Jester said.
Many grids simply cannot generate enough power, or add it in time to meet datacenter developers’ timelines, and the process of adding power supply to the grid is…
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