Between the U.S. government reshaping semiconductor policy on a historic scale, fresh layoffs, trillion-dollar investments, nationwide energy woes, and innovations in building materials, the data center sector continues to be in an era of extraordinary change. Plus, what does a late NASCAR legend have to do with a cancelled data center project? Here’s a look at the latest data center developments you need to know.
Washington Turns Up the Heat on Chips
Semiconductor trade tensions are back in the spotlight. President Trump recently announced 100% tariffs on imported semiconductors – with exemptions for companies building on U.S. soil. The details remain foggy, including what counts as “building in the U.S.” The move coincided with Apple pledging an additional $100 billion in domestic manufacturing investments. Apple also claimed that it would hire 20,000 U.S. workers over the next four years.
Meanwhile, global chipmakers are being forced to make unprecedented concessions to continue sales abroad. Nvidia and AMD have agreed to give 15% of their China chip sales back to the U.S. government in order to continue exports. This came after AMD blamed export restrictions for a dip in its revenues.
Intel hasn’t been spared either. After Senator Tom Cotton expressed concerns about Intel CEO Lip-Bu Tan’s alleged ties to China, President Trump made the extraordinary demand that Tan resign. Tan rejected the claims as misinformation, emphasizing that he has been fully cooperating with the administration. Since then, there have reportedly been ongoing talks between both parties, including discussions of the U.S. government potentially taking a stake in the company.
International political pressures are also affecting Microsoft. The company has launched an urgent investigation after reports that Israel’s military surveillance agency used its cloud platform to store millions of phone call recordings from Palestinians and allegedly coordinate military operations. Protests erupted at Microsoft’s Netherlands data center, where some of this data is reportedly housed.
Explosive Capex Meets Operational Strains
While chipmakers navigate new levels of geopolitical uncertainty, data center operators are charging full-steam ahead. Global data center capex is projected to hit $1.2 trillion by 2029, according to Dell’Oro Group, with AI infrastructure driving much of the surge. GPUs and custom accelerators now account for about a third of total spending. Brookfield Asset Management was even more bullish, predicting $7 trillion in AI infrastructure spend over the next decade – including a staggering 75GW of additional AI data centers.
Speaking of spending, in Oklahoma, Google has committed $9 billion to new and expanded campuses as part of its AI and cloud expansion efforts. QTS began work on a seven-building campus in Cedar Rapids, Iowa, with a potential $10 billion build-out. Microsoft also broke ground on a new campus in Cheyenne, Wyoming, while Rowan Digital launched a $900 million project outside San Antonio. Meanwhile, Apollo acquired a majority stake in Stream Data Centers, a developer with a 4GW land bank.
But all growth comes with tradeoffs. Oracle laid off hundreds of employees across its engineering, AI, and data center teams – even as the company continues to build out capacity for OpenAI’s $30 billion Stargate project.
Lastly, IBM Cloud recently suffered its fourth major outage since May, with widespread authentication failures leaving customers unable to access the console, APIs, or CLI for hours. Some analysts are raising concerns about reliability for enterprise workloads.
Grid Strains and Gigawatts
In energy news, Constellation Energy reported a 45% increase in usage from its existing data center customers since 2023. And Xcel Energy warned it needs $22 billion in upgrades just to keep up with Colorado’s massive projected data center power demand by 2040. Xcel said it already has pending applications from data centers in need of 5.8GW of electricity – enough to power more than 3 million homes.
On LinkedIn, compute and infrastructure staffer at OpenAI, Anuj Saharan, revealed that the company’s compute has increased by 15x since 2024 – and that it’s built out more than 200,000 GPUs to launch GPT-5. While details are still sparse, GPT-5 is predicted to consume much more energy than previous models, according to The Guardian.
Elsewhere, Meta’s 2GW Hyperion campus in Louisiana will get a dedicated $1.2 billion transmission line from Entergy, and Equinix recently signed three nuclear deals totaling 774MW to power its operations.
Pockets of Community Resistance
Even as global spending soars, some local communities are pushing back against data center builds. Amazon’s Project Blue was rejected by the Tucson city council after residents raised concerns over water usage and secrecy. Meanwhile, a $30 billion proposal in Mooresville, North Carolina, was abandoned following strong opposition from residents – including the family of late NASCAR legend Dale Earnhardt, whose estate owns the land in question. Georgia officials also shot down a 1.2GW rezoning plan near Macon while another developer quietly filed plans for “Project Turbo” outside of Atlanta.
Cement, Seaweed, and Thermodynamics
Amid the chaos, there’s also innovation. Amazon is testing low-carbon cement from Brimstone for its facilities, while Microsoft has started experimenting with seaweed-based cement that supposedly cuts emissions by 21%. Finally, Normal Computing announced it has successfully taped out the world’s first thermodynamic semiconductor, claiming up to 1,000x energy efficiency for AI workloads.