From a high-profile South Korean data center fire and a new round of mega-investments to grid upgrades and chip policy shake-ups, it’s been another packed couple of weeks for the data center sector. Here’s a roundup of the latest news shaping the industry.
Fire in South Korea Halts Government Services
South Korea’s national data center fire has dominated headlines – and for good reason. The blaze knocked out a staggering 647 government services – from postal to tax systems – and officials said full recovery could take up to a month. The fire began during a risk-reduction exercise while relocating UPS batteries, leading to “thermal runaway.” In a particularly sobering detail, officials have since reported that 858TB of government data may have been permanently lost after a crucial hard drive was destroyed in the fire without a backup.
The incident has exposed just how fragile mission-critical infrastructure can be when redundancy plans go awry. It’s also sparking renewed scrutiny of lithium-ion battery use and insufficient disaster recovery architecture.
Market Moves, AI Expansion, and High-Stakes Disputes
The AI era continues to drive massive infrastructure deals. CoreWeave signed a 14.2 billion dollar cloud services contract with Meta, joining existing agreements the neocloud upstart has with Microsoft, Nvidia, and OpenAI. The partnership gives Meta flexibility to expand beyond its own hyperscale campuses – including its planned 5GW mega-site – while helping CoreWeave balance capacity across clients.
At the same time, OpenAI has upped its own CoreWeave commitment to a staggering $22.4 billion, all while building five new U.S. data centers with Oracle and SoftBank under its $500 billion Stargate plan. In total, the Stargate project is expected to bring 7GW of IT capacity online over the next three years. This latest spending spree has analysts worried about potential circular financing – where AI firms both fund and consume each other’s services – raising questions about the sustainability of the current AI boom.
On the investment front, Intel is reportedly in talks with AMD about potential manufacturing collaborations, and with Apple for potential investment, underscoring how hyperscale demand is reshaping traditional chipmaker rivalries. Legal tensions are also heating up as Elon Musk’s xAI has sued OpenAI for allegedly hiring staff to steal operational know-how for rapid data center deployment.
Microsoft, meanwhile, has blocked Israel from using its Azure platform for a recently uncovered mass surveillance program targeting Palestinian citizens, citing terms-of-service violations. Lastly, Oracle is preparing for its own AI buildout, taking on $18 billion in debt to fund data center construction and related capital expenditures.
Chip Shifts
Governments and hyperscalers alike are moving toward greater chip self-sufficiency. The U.S. is reportedly considering a 1:1 domestic-to-import chip ratio mandate, while the UK launched a £10 million fund to accelerate domestic semiconductor development.
Hyperscalers are following suit. Microsoft CTO Kevin Scott revealed that the company aims to mainly use its own AI chips in the future, moving away from reliance on Nvidia and AMD. These moves suggest a new era in which policy, investment, and internal R&D converge to secure both supply chain control and competitive advantage in AI infrastructure.
Energy Investments and Grid Expansion
In energy news, the U.S. DOE is investing $625 million to retrofit coal plants to supposedly meet rising AI-driven demand, including funding for modernization, dual-fuel retrofits, and wastewater management. The funding will help extend the lifespan of dozens of plants once slated for closure.
Utilities are also scaling up to meet today’s surging demand. California’s biggest utility company, PG&E, announced a $73 billion grid upgrade to support up to 10GW of AI and cloud load, and Avangrid is investing $18.5 billion to expand U.S. electric and gas networks.
Renewable power deals are also moving forward. Digital Realty signed a 500GWh hydropower purchase for Virginia data centers, and Amazon secured 57MW of solar in Oregon while launching the Water-AI Nexus Center of Excellence. The center will focus on developing sustainable water practices for the AI era and explore the use of AI to address the world’s biggest water challenges.
Lastly, Texas-based Fermi America contracted 1.1GW of natural gas turbines from Siemens for its planned 11GW Amarillo campus, bringing its total contracted gas turbine capacity to nearly 2GW.
Local-Level Development, Pushback
Community resistance continues to shape development plans. Microsoft announced it’s behind a new data center proposal in Caledonia, Wisconsin, where residents have voiced concerns over noise and long-term land use. Similar pushback is surfacing elsewhere: A 1,000-acre Michigan campus proposal tied to a Fortune 100 tech firm just hit a wall after local planners voted unanimously to deny rezoning, and St. Louis paused a major project amid tightening local regulations.
Meanwhile, in Pennsylvania, environmental campaigners are urging regulators to block a 4.5GW gas-powered AI campus in Homer City, citing emissions three times higher than any other single-generation facility in the state.
Innovation Watch
In innovation news, Microsoft has partnered with Corintis to develop bio-inspired microfluidic cooling, pushing coolant through chip-level channels that mimic butterfly wing veins. The design reportedly cuts GPU temperatures by 65% – and could help hyperscalers overclock during demand spikes.
Meanwhile, SoftBank unveiled a “cableless” rack system that allows data center robots to swap and service servers without messy wiring. And Jeff Bezos recently predicted that gigawatt-scale data centers in space could become reality within 20 years, powered by uninterrupted solar energy.