In recent data center headlines, the scale keeps climbing – and so does the complexity. From billion-dollar deals and regulatory rumbles to energy status reports and nuclear power promises, here’s a look at the latest developments shaping the industry.
The Billion-Dollar Data Center Arms Race
The data center sector is no stranger to mega-deals, but the latest batch is redefining what “hyperscale” really means.
Topping headlines is OpenAI’s staggering $30 billion-a-year cloud deal with Oracle, likely the largest cloud contract ever signed. The deal will see OpenAI lease a massive 4.5GW of capacity across multiple Oracle-built campuses. Sites in Texas are under evaluation – including a possible 2GW expansion in Abilene – with others in Michigan, Ohio, and beyond in the mix. This comes even as OpenAI diversifies its compute power across Microsoft Azure, CoreWeave, and recently Google Cloud, where it’s now experimenting with Google’s custom TPU chips to cut inference costs.
Speaking of diversification, CoreWeave just made its own bold strategic play with a $9 billion acquisition of Core Scientific. The all-stock deal gives CoreWeave ownership of 1.3GW of data center capacity and another GW of potential expansion – plus freedom from $10 billion in future lease obligations.
Meta is also making waves with its reported $29 billion data center funding round, seeking a mix of debt and equity from private equity heavyweights like KKR and Apollo, according to the Financial Times. Meta continues to expand its 28-data-center-campus global footprint to keep pace with the AI and immersive media demands of Facebook, Instagram, and its metaverse ambitions.
Not all deals are sailing smoothly, though. The FTC has opened a deep-dive investigation into SoftBank’s $6.5 billion acquisition of Arm-chip designer Ampere, potentially delaying a transaction that could shake up the server silicon landscape.
And let’s not forget HPE, which quietly closed its long-awaited $14 billion acquisition of Juniper Networks. The move doubles the size of its networking business and strengthens its position against Cisco in the AI infrastructure race.
Local Drama, Incentives, and Familiar Flashpoints
We’ve got fresh developments in two controversial data center projects we’ve been tracking.
First, in Tennessee, Elon Musk’s xAI has officially secured permits to permanently install 15 gas turbines at its Memphis data center site after drawing continued backlash – and a lawsuit – from environmental advocates and community members. The company claims the turbines will shift to backup use once a new substation comes online later this year. Meanwhile, Musk said the company is importing an entire power station from overseas to support the site, which could eventually host up to a million GPUs.
Second, in bordering Kentucky, the much-disputed $6 billion data center proposed for Oldham County has officially been dropped. After months of mounting opposition from residents and scaled-back revisions from developers, Western Hospitality Partners withdrew its application, citing ongoing community concerns. For local activists, it’s a rare grassroots victory in an industry typically fueled by top-down economic incentives.
Speaking of incentives, Indiana’s Economic Development Corporation recently approved $168 million in tax breaks for four unnamed data center projects. The 35-year exemptions will apply to purchases of qualifying equipment and energy use, though details on the end users remain under wraps. While states continue to roll out red carpets, the secrecy around some of these deals underscores growing transparency concerns. The tax breaks are already drawing local ire.
Lastly, in Oregon, Google is going back to its roots – sort of. The tech giant is revamping its original 2006 data center in The Dalles. The facility will undergo selective demolition and infrastructure upgrades to support newer workloads and Google Cloud customers, showing that legacy sites still have a role to play in the AI era.
Power Plays and Energy Shifts
From nuclear restarts to sustainability breakthroughs, powering AI workloads continues to drive innovation – and challenge the data center industry’s environmental footprint.
The long-dormant Three Mile Island nuclear plant may come online earlier than expected to fuel its East Coast AI data centers. Constellation’s CEO recently announced that the plant’s 837MW unit could be operational within two years, ahead of the original 2028 timeline. Microsoft locked in a 20-year power purchase agreement for the plant last year.
Meanwhile, Google’s latest Environmental Report reveals a complex picture. The tech giant’s data center electricity use surged 27% in 2024, but its energy-related emissions dropped 17% year-over-year – the first emissions decline since 2019. The company reportedly consumed roughly 32.1 million MWh of power, with 95.8% of that used by data centers, underscoring the massive scale of its infrastructure. Scope 3 emissions remain a significant challenge, the company said. For comparison, Microsoft’s recently released sustainability report shows the company experienced a 23% increase in total emissions since 2020.
Speaking of Microsoft’s sustainability efforts, the company provided updates on a pilot program integrating Direct Air Capture (DAC) systems powered by data center waste heat. The system can reportedly reuse 70-85% of this heat, significantly boosting energy efficiency. Beyond reducing its own carbon footprint, Microsoft says this integration could be key to commercializing DAC technology – currently one of the most capital-intensive and costly carbon removal methods on the market.
Stay tuned for more data center news!