From next-gen data center technology unveiled at CES 2026 and Nvidia pulling back on its own cloud ambitions to operators locking in gigawatts of renewable power and a fresh wave of acquisitions, it’s been an eventful start to the year. Plus, is there no AI bubble after all? Here’s a roundup of the latest developments shaping the data center industry.
Partnerships, Market Shifts, and a $3 Trillion Forecast
One of the more telling market shifts came from Nvidia, which has reportedly restructured its DGX Cloud business and folded it into its core engineering organization. According to The Information, the offering struggled to gain traction while also unsettling hyperscaler customers. The move suggests Nvidia is stepping back from operating cloud services and refocusing on strengthening its underlying platforms through internal research and development.
In hardware news, chipmaker Marvell’s $540 million acquisition of XConn Technologies expands its PCIe and CXL switching capabilities at a moment when scale-up connectivity is emerging as a key constraint for AI buildouts. The deal comes just weeks after Marvell’s purchase of optical interconnect startup Celestial AI.
Meanwhile, Lenovo announced it’s teaming up with Nvidia on a new AI Cloud Gigafactory offering that aims to shorten large AI cloud deployment timelines from months to weeks by bundling liquid-cooled infrastructure, manufacturing capacity, and Nvidia’s latest GPU platforms into a single delivery framework.
Elon Musk’s xAI raised $20 billion in an oversubscribed funding round to support its data center build-out, with Nvidia and Cisco named as strategic investors. And while that kind of massive capital funding continues to fuel AI bubble concerns, at least one major firm isn’t buying it. JLL projects global data center investment could reach up to $3 trillion by 2030, arguing that leasing activity, power commitments, and project backlogs still point to a long runway for growth despite growing challenges and bubble concerns. Other analyst forecasts – like Omdia’s, which puts total capex at $1.6 trillion by 2030 – are more conservative.
Renewable PPAs, Lawsuits, and the Power Race
On the energy front, Meta’s latest nuclear power deals with TerraPower, Oklo, and Vistra – totaling up to 6.6GW – rank among the largest in the sector to date and are tied directly to its Prometheus AI supercluster in Ohio. Speaking of renewable energy, power producer Treaty Oak has begun construction on two Meta-backed solar projects in Louisiana, set to add nearly 400MW of capacity. Meanwhile, data center operator Switch has signed a 20-year, 13MW geothermal PPA with Ormat Technologies in Nevada, and Greenflash Infrastructure has secured more than 10GWh of lithium-ion battery storage equipment under safe-harbor provisions to speed up delivery timelines for US data center projects.
Natural gas deals are also gaining momentum. Vantage Data Centers is partnering with natural gas and oil services company Liberty Energy to deliver up to 1GW of power over the next five years. Electricity and power generation firm Vistra’s $4.7 billion acquisition of Cogentrix Energy also adds 5.5GW of gas capacity aimed squarely at serving data center demand.
At the same time, grid tension is rising. Chicago’s largest electricity company, ComEd, now requires large-load users to make firm financial commitments to help shield ratepayers from transmission infrastructure buildout costs. In Wisconsin, Meta’s Beaver Dam project faces a lawsuit from an environmental group over undisclosed electrical load forecasts. Lastly, Dominion Energy is suing the U.S. government over halted offshore wind projects it says are critical for powering Virginia’s data center corridor.
U.S. Development Updates
At the local level, scale continues to climb. xAI announced it plans to invest more than $20 billion in Mississippi to build a data center, eventually giving the company access to up to 2GW of compute across three regional campuses. Microsoft is also pressing ahead with several new data center campuses in Michigan – even as residents raise concerns around water and power usage – and is planning a $400 million facility in Castroville, Texas.
Rowan Digital Infrastructure, meanwhile, has begun work on a 300MW, $700 million campus in Temple, Texas, with operations expected in 2027. Lastly, Crusoe has been approved to build its 1.8GW Project Jade data center in Wyoming, paired with an adjacent gas-powered energy hub.
Next-Gen Tech: CES 2026 and Beyond
Several of the week’s most forward-looking announcements came straight from CES 2026, which doubled as a showcase for where data center technology is headed next. First, AMD used the show to unveil its MI400 accelerator lineup and outline a roadmap toward yotta-scale AI infrastructure, including rack-level systems delivering multiple exaflops. Lenovo also debuted new scalable server products aimed at large AI inferencing workloads.
Edge computing firm Odinn drew attention at CES with its “portable data center” – a carry-on-sized system packed with CPUs, GPUs, and up to a petabyte of storage. Commonwealth Fusion Systems, meanwhile, took the CES stage to announce partnerships with Nvidia and Siemens to build an AI-powered digital twin of its SPARC fusion reactor, aimed at accelerating commercial fusion timelines.
Beyond CES, IBM detailed its new 120-qubit Quantum Nighthawk processor, which the company says keeps it on track for fault-tolerant quantum computing by 2029. Elsewhere, Finland’s E-Heat demonstrated how containerized data centers can feed district heating networks, Bloomberg reported on a proposal to repurpose US Navy microreactors for data center power, and Aegis Aerospace outlined plans to manufacture semiconductor materials in low Earth orbit to take advantage of microgravity conditions.