Aging grid threatens OpenAI, Microsoft as hyperscalers commit USD 400B to centers

The major "hyperscalers"--Amazon, Google, Meta, and Microsoft--have outlined investment plans exceeding $400 billion, primarily for data centers. OpenAI alone has reportedly signed infrastructure contracts totaling over $1.4 trillion to secure roughly 28 GW of capacity over the next eight years. CEO Sam Altman has characterized this energy shortage as an existential threat, noting that without sufficient compute power, the company cannot generate revenue or build models at the necessary scale.

Phantom projects and aging infrastructure clog the grid The US power grid isn't keeping up. After two decades of stagnant growth, electricity demand is spiking, with AI data centers accounting for more than half of the expected increase. The report details how the infrastructure itself is aging, with many poles and transformers dating back to the 1960s and 1970s.

Bureaucracy makes matters worse: the average wait time from requesting a grid connection to commercial operation now exceeds eight years nationwide. Planning is further complicated by what the report describes as "phantom data centers." Developers often submit multiple applications to different utilities to find the best price, artificially inflating queues. Supply chains are equally strained: lead times for large transformers are three to four times longer than in 2020.

Gas turbines, often used as a stopgap, now have delivery times of around four and a half years. Tech giants turn to off-grid power and controversial tactics To bypass delays, AI companies are increasingly turning to "behind-the-meter" power generation. According to the Southern Environmental Law Center (SELC), the company powered its controversial "Colossus" cluster in Memphis, Tennessee, for months using dozens of gas turbines without necessary environmental permits.