Developers are exaggerating their plans, just as politicians are overstating their opposition

Published on: Aug 20, 2026, 19:08:48 IST

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In February, shortly after making his feature-film debut as a pen magnate in “Marty Supreme”, Kevin O’Leary announced that he would build one of the world’s biggest data-centre projects in Utah. The market shrugged. What did Mr O’Leary, who is best known for presenting “Shark Tank”, know about data centres? How would it be paid for? Or powered? One analyst dismissed the project as an example of “vapourware gigawatts”.

But a joke in the marketplace became dynamite in the town square. In June J. Stuart Adams, president of the Utah Senate, who had initially supported Mr O’Leary’s venture, demanded that its size be reduced by three-quarters. Mr O’Leary accused his critics of working for China (he later withdrew that), but eventually agreed to scale back his dreams. Even then Mr Adams, a long-serving Republican lawmaker, along with a pair of county commissioners, lost primary elections because of the scandal.

Data centres are a nightmare of political economy. Voters see them as ugly, dirty, noisy and power-hungry bastions of arrogant Silicon Valley companies. And—thanks to ChatGPT—it has never been easier to pen a letter to the planning department saying so. Yet the public has an awful lot riding on these windowless sheds, for the the stock market is a one-way bet on them being built. Data centres are particularly disorientating for Democrats, since unions tend to support the projects. If artificial intelligence is a class war, it pits a coalition of billionaires and electricians against the office droids both despise.

Wildcatters like Mr O’Leary are a soft target for politicians who want to be seen as tough on data centres but still want them to be built. On August 18th Josh Shapiro, the governor of Pennsylvania, derided the developers “scaring our communities” and signed an executive order he said would squash “speculative proposals” that had little chance of being built in the first place. Of the more than 100 projects announced in the state, he said, less than a fifth had applied for the permits needed to develop them.

Imaginary scalps are easy to claim. Silicon Valley giants are the biggest backers of data centres. But beside them is a long line of property developers, private-capital firms, “neo-cloud” operators and crypto-miners, followed by international chancers, national rogues and local spivs. Most of their plans were destined to remain press releases. Analysts at Bernstein, a broker, attempted to quantify the credibility of each watt of announced capacity. Plans by Google and Amazon are taken at their word. Those by CoreWeave and Nebius, two large neo-clouds, are discounted by around half. Mr O’Leary is ignored.

According to their model, another fantasist is Vermaland, a land bank that announced a gargantuan 3GW facility in Arizona last year. In May the project was reportedly cut by four-fifths after facing local opposition—a shadow-boxing knockout. Little information is available about a 1GW project in south Florida that was supposedly shelved in February, except that the land had been bought for $15m in 2024 by an obscure investment firm. When a data-centre plan that would never have materialised is cut down, it often makes a very large sound.

Politicians are eager to polish their anti-data-centre credentials ahead of the midterm elections in November. The resulting policies may not affect the boom much. In July New York’s governor announced a one-year moratorium on big projects (including those not connected to its electricity grid). But the moratorium does not apply to data centres that have already been approved, and New York is hardly important to the build-out. Virginia imposed a $600m electricity tax on data centres to great fanfare, but left in place a sales-tax exemption three times as big. Mr Shapiro’s new rules will require local authorities to approve projects before the state does, clearing up his desk until after the election.

If the data-centre build-out has a natural home it is Texas. The state is vast, energy-rich and home to plenty of the lawyers and engineers needed to handle big infrastructure developments. Its electricity-grid operator has been flooded with an astonishing 474GW of requests to connect to the grid (which currently faces peak demand of around 90GW). On August 3rd Greg Abbott, governor of Texas, announced an “audit” of data-centre projects, which is expected to last, conveniently, until just after the midterms. Tellingly, some of the biggest data-centre operators have publicly supported his plans.

More political controversy probably means more delays for projects that are not yet in motion. But the share of the data-centre pipeline that has been delayed or cancelled has remained consistent at roughly 10% during the past year, despite the explosion in the number of plans and political opposition to them. Thus far constraints imposed by the market, such as the availability of chips and workers, have worried developers far more than those imposed by government.

Could the slightly fake war against data centres in fact be a “phoney” one, poised to turn real? It is hard to imagine. Politicians are rarely willing to halt projects that have already broken ground. As for the new ones, developers can to some extent vote with their feet. So far that has meant moving west. It could also involve building more on federal land. Eventually, it might involve more construction abroad—or, if Elon Musk is to be believed, in space.

Stoppable force, movable object

It is often said that China has an advantage in the AI race because it can build big things by force. Yet America has the power of willing things into existence by exaggeration. The grand plans of developers will be watered down. Politicians will also overstate their opposition. Often they will cancel each other out. Meanwhile, the searing pace of construction will continue.

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