• The Data Center Coalition's PAC has made $165,500 in campaign contributions to Virginia lawmakers.
• The interest group's funding came from companies like Amazon, Visa, and Stack Infrastructure.
• DCC's first-ever political donations came ahead of a push by VA lawmakers to regulate data centers.

An under-the-radar interest group representing Big Tech and private-equity-backed data center developers is growing the industry's influence on public policy, as data center construction booms across the country and utilities scramble to meet the mounting electricity demand from artificial intelligence.

The group's efforts might already be paying off, as evidenced by a failed slate of bipartisan-backed data center regulations in Virginia, where the annual General Assembly session will adjourn on February 22.

In the three months between Election Day and the start of the legislative session in January, a political action committee tied to the Data Center Coalition made $165,500 in campaign contributions to state lawmakers, Business Insider found in filings with the Virginia Department of Elections.

The DCC counts major data center operators, including Amazon, Microsoft, Meta, Google, and Blackstone-backed QTS, as members. The group has registered as a lobbying organization in Virginia, home to the world's largest data center market, annually since 2019. While it has always represented the data center industry's interests before Virginia lawmakers, these are the first campaign contributions DCC has ever reported making.

DCC made the contributions between November 16 and January 7, the day before the start of Virginia's annual legislative session. During this time, lawmakers typically talk to lobbyists and write bills.

Data center regulation was expected to be a hot topic at this year's legislative session. Several lawmakers—both Republican and Democratic—introduced bills addressing a wide range of public concerns regarding the industry, from noise pollution to the cost of electricity. Of 27 proposed bills that directly addressed the data center industry, only one passed both the House and Senate.

DCC's donations were made by the Virginia Digital Infrastructure PAC, which was registered in September with the Virginia Department of Elections by Kate Smiley, a DCC government affairs official. The PAC has reported raising a total of $490,000 in funds from a small group of DCC members, including Stack Infrastructure, CloudHQ, Vantage Data Centers, Amazon, Visa, and CyrusOne.

The largest amount, $250,000, came from Stack Infrastructure, which last month was acquired by asset manager Blue Owl Capital from a joint venture started by Iron Point Partners and Iconiq Capital, a multi-family office that serves some of Silicon Valley's most elite names. Amazon, which has made political donations in Virginia under its name, gave $25,000.

Amazon also made a separate donation of $25,000 to Virginia Gov. Glenn Youngkin's Spirit of Virginia PAC on January 4. DCC member Google did not contribute money to the group's PAC, though it made four individual donations of $25,000, split evenly between Democratic and Republican PACs, in December.

"DCC is a nonprofit membership association that does not endorse candidates for public office or participate in political campaigns," Michael Robinson, a spokesperson for DCC, said in an e-mailed statement to Business Insider. "Like many trade associations, DCC established a state and local Political Action Committee (PAC) in Virginia. DCC did so as part of its work to engage on behalf of members and help inform Virginians about the many economic and community benefits data centers provide, as conversations continue about this critical industry and opportunities arise for additional investment, jobs, and supply chain development across the Commonwealth."

Stack, CloudHQ, Vantage, Amazon, Visa, and CyrusOne did not immediately respond to requests for comment.

Virginia's data center bills

Northern Virginia is the world's largest data center market, and much of the industry's early growth occurred there. With demand for AI surging, big data center clusters are now under construction in many parts of the country.

In Virginia, public concern over the industry's energy and environmental footprint has led to heightened scrutiny in recent years.

On the agenda for this year's legislative session, which began January 8, was a bipartisan package of bills that would rein in the industry's rapid expansion amid rising concern over its energy consumption and environmental footprint. Energy use in Virginia is expected to more than double by 2040 due to forecast data center demand, according to a joint legislative report, known as the JLARC study, issued in December. Building the infrastructure needed to support that demand would be "very difficult," the report said.

In addition to the data center package, lawmakers this session considered several bills regarding the Virginia Clean Economy Act, which mandates the state's monopoly utility, Dominion Energy, procure 100% of its electricity from renewable energy sources by 2045.

Data center operators like Amazon and Microsoft are some of Dominion's largest customers in Virginia, meaning legislation regarding the utility's compliance with the VCEA could also impact them.

The tech industry's influence

Campaign contributions made by corporate interest groups ahead of legislative sessions can be used to influence policy decisions, said Brendan Glavin, director of insights at OpenSecrets, a nonprofit that tracks campaign finance and lobbying.

Of the $165,500 in donations made by the DCC's PAC, $50,000 went to House Speaker Del. Don Scott's Democratic leadership PAC. The remaining funds were split between 34 lawmakers in amounts ranging from $1,500 to $10,000.

Glavin said it is " important " to note a large donation to a powerful legislator or an associated group, such as the DCC's donation to Scott's leadership PAC because it can influence which bills move forward and which bills don't.

"It's just like in Congress. The speaker's going to control what moves through, what gets considered," said Glavin.

Donations by an interest group to individual lawmakers made during the countdown to a legislative session can indicate the group is looking to sway specific decisions.

"They're going to have a strategy," Glavin said. "It may be that they know one of these people is on the fence on a data center issue, or they may be trying to convince them to move their position."

Virginia Del. Josh Thomas, who represents a data center-heavy district in Prince William County and sponsored three data center regulation bills this session, said it was hard to know exactly whose influence ultimately quashed the data center legislation.

Thomas said that lobbyists representing Big Tech companies turned out in Richmond this session, and other powerful groups—including organized labor, real estate development, and utilities—also have an interest in influencing data center legislation.

He was not surprised to see that DCC chose to start making campaign contributions this year, ahead of the JLARC study on data centers.

"I think they probably believe that their arguments by themselves might be under attack from another viewpoint, and they're no longer the sole viewpoint in the room," said Thomas of the donations. "Some people think it buys an outcome, and some people think it buys you access or time. Regardless of your philosophic view on campaign contributions, at the very least, it's a signal that other voices are in the room."

Do you work in or have knowledge of the data center industry and have insight to share? Get in touch with this reporter at [email protected] or reach out via the encrypted messaging app Signal at +1-929-524-6924.

• AI has touched off a data center development boom that will be largely powered by natural gas.
• Fearful of becoming big polluters, big tech has begun to explore the use of carbon capture.
• The technique of capturing and burying carbon emissions is still unproven and nascent.

Big tech companies like Amazon, Meta, Microsoft, and Google have promised to use renewable or low-carbon energy sources like solar, wind, and nuclear to power a record surge of data center development across the country.

Yet much of the around-the-clock electricity needed for the energy-hungry facilities has been — and will likely continue to be — generated by fossil fuels, including a fleet of new and existing natural gas plants.

To try to meet their environmental goals, these tech companies are considering the emerging business of capturing carbon at an industrial scale before it is released into the atmosphere and funneling it permanently underground.

Exxon Mobil, which recently announced an initiative to power data centers with plants whose carbon emissions it will sequester, has estimated that data centers will account for 20% of the carbon capture and storage market by 2050.

In December, Meta became the first big name in the industry to embrace the tech when the large southern utility Entergy announced that the company had agreed to fund a large carbon capture and storage project in Louisiana. The deal will help Meta offset emissions from a $10 billion data center campus it is planning in the state that will be powered by three new natural gas-fired plants.

Last month, Chevron announced that it would build natural gas plants using carbon capture, citing the soaring demand from data center customers.

The concept of piping carbon emissions underground is not new. Oil and gas extraction companies have pumped compressed, liquid carbon dioxide into wells for decades to help force out more fossil fuels. Using the technique at a scale large enough to begin significantly mitigating climate warming emissions, however, has been considered both enormously costly and complex.

A data center boom, generated by the race to develop and commercialize artificial intelligence, has suddenly brightened the outlook. Leading data center builders include the deepest-pocketed companies in the world. Some of them appear willing to pay the kind of hefty premiums for emission-free electricity that would justify the costs of capture and storage.

"We had an 'aha' moment that it's actually Amazon, Microsoft, Meta that are very interested in these power plants," said Jerry Ashcroft, the CEO of Crescent Midstream, which was selected to design and build the carbon capture system for the Louisiana plant that Meta will help pay for. The project, at the 1-GW Lake Charles power station, will cost around $1 billion to build, Ashcroft said, who noted that a final cost estimate is underway.

Crescent Midstream, meanwhile, is bidding to develop another utility-scale carbon capture system for a new gas plant that Entergy plans to build in Greenville, Mississippi, Ashcroft said. That station will help power a $10 billion data center campus nearby that Amazon announced in early 2024.

The investment firm Carlyle Group acquired a majority stake in Crescent Midstream, a pipeline company, in 2021, and expanded it into the business of capturing, transporting, and sequestering carbon.

Ashcroft says that he anticipates Entergy will pursue at least 10 carbon capture projects across its portfolio in the near term. The Houston-based executive, who has been in the fossil fuel industry for years, said he has been astounded carbon capture's rapid recent advance.

"Going from 2020 to 2025, where now you're actually doing a project, yeah, it's pretty hard to imagine," he said.

Soaring energy demands and few carbon-free solutions

Behind the interest in carbon capture lies an increasingly difficult array of choices in the nation's constrained energy market.

Some forecasts estimate that more than 90 gigawatts of data center demand could be added to the grid nationally by the end of the decade—the equivalent of about nine New York City-size blocks of power.

Data center operators have sought out renewable sources of energy to curtail the enormous potential carbon footprint of all that capacity. Still, green options, including solar and wind, aren't considered reliable or intense enough to readily match the enormous, steady strains that the data facilities place on the grid day and night.

Adding new nuclear power, meanwhile, is even more costly than capture and storage and fraught with labyrinthine regulatory hurdles.

To meet the growing shortage of power, utilities have turned to an old asset in their portfolios: natural gas.

Natural-gas-fired generation capacity in the US has grown to 79 gigawatts, an increase of 19% since 2014, according to the US Energy Information Administration. Even as more solar and wind is connected to the grid, surging energy demand from data centers is expected to drive more natural gas use. In Virginia, Georgia, North Carolina, and South Carolina, for instance, utilities are planning to build a combined total of 20 GW of new natural gas generation, primarily as a result of forecast data center demand.

"If the business model is we have to get the most power, quickest to stay out in front of the AI race as it were, gas must play a role in that," said Erik Belz, the president and chief operating officer of the investment firm Engine No. 1.

Engine No. 1 is partnering with Chevron in its initiative to develop natural gas plants with a total capacity of about 4 GW for energy customers constrained by the power shortage, including data centers. The group also includes the energy equipment manufacturer GE Vernova, which is producing the turbines for the power plants. The venture plans to couple the facilities it builds with renewable energy sources and carbon capture to reduce their emissions. It expects to begin delivering the projects in 2027.

The group is close to announcing its first deal with a data center customer, and that project may seek to harness carbon capture, Belz said.

"This one has the capability to do it," he said.

A web of technical hurdles

Carbon capture and storage come with myriad complications and uncertainties.

About 6% of the exhaust fumes from a modern natural gas plant are composed of carbon dioxide, according to Ashcroft, the Crescent Midstream CEO. Huge absorbers filter that gas out before compressors liquify it. Pipelines transport the carbon to wells where it is pumped thousands of feet below the surface.

The Lake Charles power station, where Crescent Midstream is planning its initial capture and storage project, is located on Louisiana's Gulf Coast, the seat of America's petroleum industry where there is an abundant network of pipelines and wells.

Ashcroft said the company would shove the gas as much as 10,000 feet below ground into saline beds beneath the gulf that lock in petroleum deposits and liquefied gas.

That geology and infrastructure don't exist widely across the US. It's not clear, for instance, whether carbon emissions could be as readily sequestered in northern Virginia, the country's largest data center market. Researchers at Virginia Tech are currently conducting a feasibility study on industrial carbon capture in the region, funded by the US Department of Fossil Energy and Carbon Management.

There are also questions whether the gas, once funneled below the earth will reliably remain there forever or if it could eventually seep out into the atmosphere, negating the whole enterprise and causing environmental harm. A large leak of methane gas from a storage well in California in 2015 is considered the worst greenhouse gas disaster in US history.

There has never been a carbon capture and storage unit operating at a gas-fired power plant in North America at the size that Big Tech would need to capture emissions from an AI data center, said Dennis Wamsted, energy analyst at the Institute for Energy Economics and Financial Analysis, a nonprofit think tank that advocates for clean energy. "That doesn't mean it can't be done," Wamstead noted, "but I would say it's going to be significantly more expensive than anything you've seen in a press release."

Difficult economics

Only about 51 million metric tons of carbon were captured in 2024 out of a total global emissions output of 40 billion metric tons — roughly a tenth of a percentage point, according to Pavel Molchanov, an analyst at Raymond James.

"Carbon capture was a tiny niche," Molchanov said. "Sequestration will need to be available in a wider range of geographies, because guess what, not everybody lives next door to an oil field."

Molchanov said that capture and storage could be expanded by adapting more geologies in areas that might not otherwise accommodate sequestration. Of course, that might also increase costs.

Capture and storage already faces difficult economics.

The parties who sequester the carbon can receive an $85 federal tax credit for every metric ton of carbon captured and stored, which can be monetized in the corporate tax credit market to produce revenue. Ashcroft said that questions have persisted in the capture and storage business whether the credit, which was roughly doubled per metric ton by the Biden administration, was sufficient to justify the steep costs.

"Many people say you need $120 to make this work," he said.

Ashcroft said he had an epiphany when he saw Microsoft's announcement last September that it had reached a deal to revive a decommissioned reactor at the Three Mile Island nuclear station in Pennsylvania to provide it with carbon-free power for its data center operations. Ashcroft said that the hefty electricity premiums Microsoft agreed to as part of that deal were a clear signal that data center operators were "willing to pay more than market for" decarbonized energy, including capture and storage.

If the tax credits alone aren't enough to pay for the Lake Charles sequestration project, the deal will rely on Meta, which has agreed to pay a rider, up to a fixed amount, on its utility bill with Entergy in Louisiana to offset the costs. A spokeswoman for Meta declined to comment.

Molchanov agrees that capture and storage is poised to grow. He projects that the amount of carbon sequestered annually will quadruple by 2030, in part because of data center demand for it.

In its earnings call in late January, Exxon Mobil executives said that their carbon capture and storage operations and a related business producing low-emissions hydrogen with capture and storage technology could generate $2 billion of annual revenue by the end of the decade.

"We've got pretty aggressive growth plans in this space,"Exxon Mobil's CEO Darren Woods said on the call, according to a transcript by The Motley Fool. "But again, all dependent upon customer interest and customers' willingness to engage in long-term contracts."

Betty Jiang, an analyst at Barclays who covers Exxon Mobil said that she believed the company would only trumpet the business of capture and storage if it had received interest from customers.

"We'll stay tuned on exactly what these investments look like," Jiang said. "But I don't think they will be raising their capital in these areas and saying what they're saying about the market opportunities if they are not having the conversation in the background to really give them the confidence that it is indeed an area of growth for Exxon."

• Amazon, Meta, and Microsoft need massive amounts of electricity to power their AI data centers.
• In states like Louisiana and Wisconsin, utilities want to serve them with new natural gas plants.
• Natural gas power is the fastest way to get power to data centers, although it has drawbacks.

From the Midwest to the Southeast, electricity demand from Big Tech's AI data center projects has become so great that in some states, utilities want to build new natural gas-fired power plants to serve them.

Microsoft is building a data center hub outside Milwaukee, where the local grid doesn't have the capacity to serve it. WEC Energy Group's We Energies has told state regulators a $2 billion plan for new natural gas generation is "critical" to powering Microsoft's AI operations while continuing to serve the rest of its customers.

Once construction finishes at Meta's data center campus in Louisiana, the facility's capacity will total more than two gigawatts. That amount of electricity is so great that Entergy's Louisiana subsidiary plans to build new natural gas plants for the first time in 50 years.

Meanwhile, Amazon's data center plans in Mississippi have spurred Entergy's subsidiary in the state to start construction of a 754-megawatt natural gas plant, which the company said could power 385,000 homes.

Those three examples are part of a broader push by US power companies to build new natural gas infrastructure in response to surging power demand from AI. The increased reliance on natural gas is at odds with a transition to renewable energy, which scientists say is needed to reduce the emissions fueling the climate crisis.

Utility plans to build new natural gas plants also conflict with the narrative Big Tech companies have touted publicly — that the renewable and low-carbon energy projects they have invested in will ultimately power their data center operations. Many of those projects are smaller in scale and depend on advancing less widely-used technologies, like Meta's contract with a geothermal energy startup. Others, like Microsoft's deal to restart the Three Mile Island nuclear reactor and Amazon's power purchase agreement with the Susquehanna nuclear plant, face steep regulatory hurdles.

"The only concrete plans I'm seeing are natural gas plants," said Cathy Kunkel, energy consultant at the Institute for Energy Economics and Financial Analysis.

Kunkel's research found that utilities in four other states — Virginia, Georgia, North Carolina, and South Carolina — plan to build a combined 20 GW of new natural gas generation by 2040, primarily due to data center demand.

The current pace of data center development could lead utilities to build more new infrastructure than their Big Tech customers ultimately need, Kunkel said. Investor-owned utilities like Entergy and WEC Energy Group are already incentivized to build because state regulations allow them to profit from billing new infrastructure investments plus interest to their customers. Kunkel said she is concerned that some utilities could be overstating demand from their data center customers to recoup profits down the line — leaving their entire customer base on the hook, regardless of whether the data centers need all the power they say they will.

In 2024, requests from natural gas plants to connect to the grid more than doubled from the year before, according to data from BTU Analytics, a market research firm.

The turn to natural gas reflects the current reality data centers face — they want more power than the electric grid can provide, and they want it ASAP.

"There's a big time scale mismatch between the rates at which data center folks want to develop and the rates at which the electric power grid can develop," said Philip Krein, research professor of electrical and computer engineering at the University of Illinois.

Krein said solar and wind power are actually the fastest sources of new power generation to build, although they aren't the best match for data centers, which need access to a consistent stream of 24/7 power.

"Natural gas is relatively the quickest way to get substantial expansion of grid capacity so a data center can get up and running fast," he said.

Utilities say that building new gas-fired plants is the most cost-efficient way to maintain grid reliability for all customers as the rapid stream of AI data centers comes online. Still, Krein said, building new natural gas infrastructure for data centers could have environmental and financial implications for everyone.

"Everybody wants to move really fast, and they're not willing to wait," he said. "I hope they don't get ahead of themselves."

Here are three of the biggest data center sites where utilities plan to build natural gas plants to power them.

Microsoft in Wisconsin

Microsoft has committed to spending $3.3 billion on an AI data center hub at the former Foxconn development site in Wisconsin's Racine County. The company has also purchased land in nearby Kenosha, signaling further investment in the area.

Microsoft has not publicly disclosed the amount of electricity its Wisconsin data centers will need. Early estimates, now likely outdated, were between 1 and 1.1 GW, Scotiabank analyst Andrew Weisel wrote in an October research note. In its February investor presentation, We Energies owner WEC Energy Group said it faces nearly 2 GW of demand driven by economic development in its service territory.

To meet that demand, We Energies, the local utility serving Microsoft, is seeking approval from Wisconsin's Public Service Commission to spend roughly $2 billion on natural gas infrastructure, including a new plant with more than 1 GW of capacity.

A spokesman for We Energies said the company's proposed natural gas generating facilities in the area comply with the grid operator's rules. The company also plans to bring 4.3 GW of renewable energy online by 2029, the spokesman said.

"Our customers count on us to deliver reliable energy — it's our job to provide it safely 24 hours a day, 365 days a year," the We Energies spokesman said in a statement. "In the coming years, we'll continue to transform our power generation fleet to support reliability and economic growth — by investing in a balanced mix of wind, solar, energy storage, and natural gas."

"The bulk power system needs sufficient generation and transmission to stay reliable and support broad economic growth," a spokesperson for Microsoft said in an email statement. "We are working with utility companies, grid operators, and regulators to achieve our ambitious carbon-free energy goals to bring more energy online and are committed to paying our share as we do so."

The company's strategy, the spokesperson said, "involves substantial investments in renewable energy projects, partnering with utilities on new tariffs for clean energy, power purchase agreements (PPAs), and innovative technologies to enhance energy efficiency and reduce carbon emissions."

In Wisconsin, Microsoft has also signed an agreement to purchase the energy produced by a 250-MW solar farm under development in Portage County.

Meta in Louisiana

In December, Meta announced a $10 billion data center investment in Louisiana. Once complete, the facility is expected to be the company's largest to date.

As part of the deal that brought Meta to the state, Entergy's Louisiana subsidiary promised to deliver the power its data center operations require.

To do that, Entergy asked state regulators to approve a $3.2 billion plan to build new infrastructure, including 2 GW of natural gas generation. In its petition, Entergy said that approval to build the gas plants would be key in sealing Meta's decision to build data centers in Louisiana.

A spokesperson for Meta said the company is committed to matching its non-renewable energy use with "100% clean and renewable energy" through power purchase agreements and renewable energy credits. Meta is also working with Entergy to bring 1.5 GW of renewable energy to Louisiana and is exploring nuclear power, the spokesperson said.

Amazon in Mississippi

In November, Entergy's Mississippi subsidiary broke ground on a $1.2 billion, 754-MW natural gas plant. The plant will support adding Amazon's data centers to Entergy's service territory in Mississippi and will ultimately be paid for by Entergy's entire customer base.

As part of Amazon's incentive package passed by the Mississippi state legislature, state regulators waived the approval process for any new power infrastructure connected with the project.

"It is really concerning for the ratepayers of Mississippi, especially residential ratepayers, that a utility has effectively carte blanche to build whatever they see fit," said Logan Burke, director of the Alliance for Affordable Energy.

Amazon has said it plans to match the non-renewable energy used by its Mississippi data centers with power purchase agreements for energy generated from wind and solar farms in the state. A spokesperson for Amazon said one wind farm and four solar farms are already operational.

Do you work in or have knowledge of the data center industry and have insight to share? Get in touch with this reporter at [email protected] or reach out via the encrypted messaging app Signal at +1-929-524-6924.

• Powerconnex notified state regulators of plans for a 120 MW natural gas plant in New Albany.
• The plant would serve as the primary source of electricity for a data center on the same site.
• As energy demand from AI strains the grid, developers seek ways to bypass it entirely.

A developer is planning to power a data center in Ohio by building a natural gas-fired plant on the site, a public filing showed.

Lawyers for Powerconnex Inc. notified the Ohio Power Siting Board last week of the company's plans to build the plant, which would serve as the data center's primary source of electricity. The power generation facility, named the New Albany Energy Center, and the data center would be built on the same 48.6-acre site in New Albany, Ohio.

Construction on the plant is expected to start as soon as the fourth quarter of 2025, according to the letter. This means the data center could be up and running by the first quarter of 2026.

It would have a generating capacity of up to 120 megawatts, which is enough electricity to power a large hyperscale data center by today's standards. However, it's a fraction of the electricity developers of AI megaprojects have said they'll need. Meta CEO Mark Zuckerberg, for instance, said the company is building a data center in Louisiana with over two gigawatts of capacity.

The data center development boom has caused electricity demand to surge in the US after nearly two decades of stagnation. Data centers are energy-intensive facilities that run 24/7, and as Big Tech continues to push into artificial intelligence, their projected future energy use is expected to create an enormous strain on the country's electric grid. Frustrated by regulatory bottlenecks in crowded data center markets, developers are seeking alternative solutions, Jones Lang LaSalle said in a report last month.

Already, developers are facing regulatory bottlenecks in crowded data center markets, and are seeking out alternative solutions — like building on-site power plants — to waiting for access to the grid.

Business Insider reported last week that developers for an Oracle data center in Abilene, Texas — widely thought to be the first Project Stargate location — are building a 360.5-megawatt natural gas turbine plant to help power it. This sort of arrangement is known as "behind-the-meter" in the utilities industry — it means that the electric generating facility is not connected to the grid, and local utilities can't monitor or measure its use.

Christine Pirik, a Dickinson Wright attorney representing Powerconnex, did not immediately respond to a request for comment. Pirik is a former deputy legal director for both the Ohio Power Siting Board, which grants permits for electric generating facilities, and Ohio's Public Utilities Commission.

Business Insider could not confirm who is behind Powerconnex Inc. However, there is a Virginia-based Powerconnex Inc. that shares a business address and three executive officers with data center company EdgeConnex.

EdgeConnex operates over 80 data centers in the US, Europe, and Asia. It is developing a data center in New Albany, Ohio, according to its website. In September, private credit company Sixth Street Partners announced it had acquired a minority stake in EdgeConneX.

New Albany, Ohio, a rural suburb northeast of Columbus, is home to several major data center projects. Amazon has committed to spending more than $23 billion on data center development in the state, and Microsoft, Meta, and Google also have projects in Ohio.

Recently, electricity demand in the region has soared. AEP Ohio, the Columbus utility that serves the major data centers, said last year that it had received 30 gigawatts of service requests. It asked state regulators to approve a separate rate class specifically for data center customers to protect other ratepayers from incurring additional costs due to the facilities' demand. Hearings for the matter were held in January, although the Public Utilities Commission of Ohio has not yet issued a final order.

Do you work in or have knowledge of the data center industry and have insight to share? Get in touch with this reporter at [email protected] or reach out via the encrypted messaging app Signal at +1-929-524-6924.

• Developers filed permits to operate natural gas turbines at Stargate's site in Abilene, Texas.
• The turbines' combined capacity is 360 MW, a fraction of the power Stargate's data centers need.
• That's still a lot of electricity — enough to power 90,000 Texas homes.

The developers of the first Project Stargate data center in Abilene, Texas, plan to build a natural gas plant on the site, according to public filings reviewed by Business Insider.

OpenAI, Oracle, and SoftBank have thus far provided little detail on the potential energy use of Stargate, a joint venture formed to spend $500 billion on AI infrastructure in the US and announced last week by the White House.

The filings said that once operational, the plant could produce up to 360.5 megawatts of power at any given time, up to 24 hours a day, seven days a week, 365 days a year. One MW of electricity can power 250 residential customers during peak hours, the Electric Reliability Council of Texas said. This means 360.5 MW is enough to power 90,000 homes in Texas — roughly double the amount of households in Abilene, according to the US Census Bureau.

These permit applications were filed with the Texas Commission on Environmental Quality by a consulting firm working on behalf of AI cloud startup Crusoe. Crusoe is the owner of Project Ludicrous, the $1.1 billion data center project in Abilene widely thought to be the first Stargate location.

An initial application to permit 10 simple-cycle natural gas turbines under Title V of the Clean Air Act — at a site that shares an address with Project Ludicrous — is under review by the TCEQ.

The application said the facility housing the turbines will be used for "primary and backup power" for "data centers and computing. " Its use will be "onsite only," meaning the power generated by the turbines won't be available to the local grid.

Half of the turbine models come from GE Vernova, and the other half come from Solar Turbines, a subsidiary of Caterpillar Inc. The turbines are designed to be installed and operational quickly, and some GE models can be up and running in as little as two weeks, the company has said in marketing materials.

A permit allowing diesel-fired backup generators to run at the site is already in effect.

Developing the plant is expected to cost half a billion dollars, a city document viewed by BI said.

Andrew Schmitt, a spokesperson for Crusoe, the startup developing Project Ludicrous, declined to comment on the record about the natural gas plant. He directed BI to the company's previous comments about the site's power, which "includes both on-and off-site renewable resources, including surrounding wind developments and a potential future large-scale onsite solar installation."

OpenAI and Oracle did not immediately respond to requests for comment.

Stargate will need lots of power

Morgan Stanley analysts on Friday estimated the entire Stargate project would require about 15 gigawatts.

That amount of power would be spread out across multiple locations, though the number of Stargate sites and how much power each would use is not publicly known. Some reports in the media and from financial analysts have indicated that Stargate sites could have a power demand of 5 GW, an amount drawn from a document said to have been pitched by OpenAI CEO Sam Altman to the Biden administration, first reported by Bloomberg.

If that is the case, then 360.5 MW, the capacity of the natural gas turbines at Project Ludicrous, would make up a tiny fraction — less than 1% — of how much power the site will ultimately need.

Some of that power will come from a substation, allowing Project Ludicrous to draw power from the local electric grid. The data center is located on land owned by energy tech company Lancium, which has built a 200 MW substation on the site, a company spokesperson told Business Insider. The company's website said it plans to increase capacity to five times that amount in 2025.

The race to develop AI infrastructure has caused electricity demand in the US to soar dramatically for the first time in two decades. Data center electricity use could triple in the US by 2028, according to the latest report from the Department of Energy.

The recent launch of DeepSeek has raised questions about AI infrastructure spending in the US, as the Chinese AI model is 20 to 40 times cheaper than OpenAI's and can run more efficiently with fewer chips.

Do you work in or have knowledge of the data center industry and have insight to share? Get in touch with this reporter at [email protected] or reach out via the encrypted messaging app Signal at +1-929-524-6924.

• President Donald Trump announced the $500 billion AI project, Stargate, earlier this week.
• Stargate's first data center is under construction in Abilene, Texas, said Oracle CTO Larry Ellison.
• Public filings for an Abilene development matching Ellison's description shed some light on costs.

Construction on what appears to be two buildings on Stargate's first data center campus, now underway in Texas, is expected to be complete by the end of the year and cost an estimated $1.1 billion, according to public filings.

President Donald Trump announced the formation of Stargate, a joint venture between Oracle, OpenAI, and SoftBank, at a White House press conference on Tuesday. He pledged to spend $500 billion building AI data centers in the US.

Oracle founder and CTO Larry Ellison, who joined Trump, OpenAI CEO Sam Altman, and SoftBank CEO Masayoshi Son at the briefing, said the first Stargate data centers are currently being built in Abilene, Texas.

"We've been working with OpenAI for a while and Masa for a while. The data centers are actually under construction — the first of them are under construction in Texas," said Ellison. "Each building is a half million square feet. There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location, which is our first location."

Little else has been revealed about Stargate. Registration forms filed with the Texas Department of Licensing and Regulation for a data center development in Abilene matching Ellison's description of Stargate give some insight into the cost of building the data centers.

The development is registered with the TDLR under the name "Project Ludicrous," located at an address attached to the Lancium Clean Campus — a 1,000-acre site in Abilene owned by energy tech company Lancium. The owner of Project Ludicrous is listed as Abilene DC 1 LLC, an affiliate of data center development startup Crusoe. According to the Texas state comptroller's records, Oracle is the occupant of the data center owned by Abilene DC 1, LLC, located at the Lancium Clean Campus in Abilene. A Texas-based Oracle employee is also listed as the tenant contact for Project Ludicrous in the TDLR filings.

Between July and December 2024, agents for Project Ludicrous filed four different TDLR filings for two buildings.

Construction on the first building, a 482,000-square-foot one-story "data hall" estimated to cost $292 million, began in June 2024 and is scheduled to be completed by May 30, 2025. The estimate also includes plans for a guard house, fire pump building, and mechanical and electrical enclosures. A second filing for the building, made in September, indicates that tenant improvements costing $140 million began in December and are expected to be completed by September 15, 2025.

A second building registered under Project Ludicrous, a 484,960-square-foot "1-story data center" with a cost estimate of $292 million, went under construction in September and is expected to be completed in one year, the filings said. Tenant improvements, expected to begin in March and be completed by December 24, are estimated at $384 million.

The San Antonio Express-News previously reported on these filings.

Lancium, the landowner, first struck a development deal with the city of Abilene in 2021 for what it calls the Lancium Clean Campus. The site was initially meant to power bitcoin mines with renewable energy generation, although that never came to fruition.

In November, Crusoe announced plans for a $3.4 billion data center development on the Lancium Clean Campus and said it had already fully leased the space to a "Fortune 100 hyperscale tenant," with occupancy expected to begin in the first half of 2025.

The Information first reported Oracle's plans to lease a data center site in Texas from Crusoe, intending to eventually rent servers to OpenAI.

In a post on its website, OpenAI said that the Stargate "buildout is currently underway, starting in Texas, and we are evaluating potential sites across the country for more campuses as we finalize definitive agreements."

"Lancium is excited to be building its Lancium Clean Campus in Abilene, Texas, in partnership with Crusoe and the Development Corporation of Abilene (DCOA) and to be at the forefront of the growth of the AI infrastructure industry in the US," a spokesperson for Lancium wrote in response to a request for comment from Business Insider. The spokesperson said the company could not "provide any new commentary about Abilene or any of our other Clean Campuses."

Oracle, OpenAI, and Crusoe did not immediately respond to requests for comment.

Do you have insight, information, or a tip to share with this reporter? Contact Ellen Thomas via the secure messaging app Signal at +1-929-524-6964.

• Amazon will invest another $10 billion in Ohio data centers, Ohio Gov. Mike DeWine said.
• The company will consider locations outside its power-strained hub in Columbus.
• In exchange for tax credits, Amazon committed to more than 1,000 new jobs in its Ohio data centers.

Amazon has committed to spending $10 billion on the expansion of its Ohio data center operations, in addition to the billions of dollars it has already said it plans to spend in the state, Ohio Gov. Mike DeWine said Monday.

The tech giant's new Ohio facilities, which should be completed by the end of 2030, will help power the push into AI by its cloud computing unit, Amazon Web Services.

Just last year, AWS said it would invest $7.8 billion to expand its data center hub in Columbus and the surrounding suburbs. The company started building data centers in the region in 2015 and has at least six different campuses that are either operational or under construction.

Ohio has committed to spending more than $23 billion on data centers in the state between the money it has already spent and its committed investments, a spokesperson for Ohio's Department of Development said.

The investment in Ohio is part of Amazon's aggressive spending plan on data center construction to support AI demand. Amazon CEO Andy Jassy said on the company's third-quarter earnings call in October that it plans to spend $75 billion on capital expenditures in 2024, most of which will go to cloud computing and data centers, and it expects to spend even more next year.

Local politicians have dubbed the Central Ohio "the Silicon Heartland." Gov. DeWine touted the AWS announcement this week as "strengthening the state's role as a major technology hub."

Most of Amazon's data centers are located in Northern Virginia, the largest data center market in the world. That area has become saturated with new facilities waiting to be connected to the electric grid. In the last 18 months, Amazon and its competitors have announced plans to build data centers in states nationwide. Just this year, Amazon announced plans to spend $11 billion on data centers in Indiana and $10 billion in Mississippi.

Job creation in Ohio

Ohio, which offers a generous slate of state and local tax incentives, including an up to 100% sales and use tax exemption for data center equipment, has seen a sharp uptick in development.

For this latest investment, the Ohio Tax Credit Authority approved additional job creation tax credits in AWS's existing economic development agreement with the state. In exchange for annual job creation tax credits, AWS has promised 1,058 "full-time equivalent" jobs with a minimum average annual payroll of $101.37 million, a spokesperson for Ohio's Department of Development told Business Insider.

Ohio law defines "full-time equivalent employees" as the result of a calculation, or "dividing the total number of hours for which employees were compensated for employment in the project by two thousand eighty." The employees must be directly employed by Amazon for the company to receive its tax credits, although there is no requirement for the kinds of jobs Amazon must offer.

When BI contacted AWS and asked what types of jobs would be available in its new Ohio data centers, an AWS spokesperson reiterated the information listed in Gov. DeWine's press release, which referred to the jobs as "new" and "well-paying."

Electricity demand rises

AWS's financial commitment to the state will hinge on whether local utilities can provide the amount of electricity the company eventually says it will need.

AEP Ohio, the Columbus utility that serves Amazon, said earlier this year that it received 30 gigawatts of service requests from data centers alone — an amount that would put the region's demand for electricity close to New York City's.

Much of that demand comes from the wealthy suburban enclave of New Albany, Ohio, where Meta, Microsoft, Google, and QTS are all constructing major data center projects. The site of Intel's future semiconductor chip plant is in neighboring Johnstown, Ohio. The New Albany Company, the real estate company founded by billionaire retail mogul Les Wexner, orchestrated many of the area's major land sales to tech companies, including Intel.

For its newest data centers, AWS will look to sites beyond the Columbus region, though no locations have been finalized, according to a statement from Gov. DeWine's office. If AWS locates a data center outside the Columbus region, it would likely be outside AEP's service territory.

AEP has asked Ohio's public utilities regulator to approve a tariff and a special rate class for data centers that would require the power-hungry facilities to pay for the majority of electricity they anticipate needing — even if they ultimately do not consume all of it.

The data center industry, including Amazon, is working to quash AEP's proposal. In a November testimony filed with the Public Utilities Commission of Ohio, Michael Fradette, who leads Amazon's energy strategy, called the proposal a "discriminatory structure" that "unfairly targets data center customers by targeting customers in specific industries."

The matter has sowed division among corporate interests in Ohio. Those who oppose the tariffs include the Ohio Manufacturers' Association Energy Group, a lobbying offshoot of the state's major manufacturing industry trade group, and the Ohio Energy Leadership Council, which is represented by David Proaño, a lawyer in BakerHostetler's Columbus office who also represents Amazon's data center business before the Public Utilities Commission of Ohio.

Meanwhile, Ohio Energy Group, which counts Cargill, Ford, GE, and Intel as members, has testified in favor of AEP's proposed data center tariffs. Walmart, a large customer of AEP in Ohio, has also come out supporting the tariff.

AEP is planning new transmission infrastructure projects to service data centers in the Columbus area, as well as the Intel chip plant. The future of the chip plant, which is supposed to bring 3,000 advanced manufacturing jobs to central Ohio, is uncertain as the company debates spinning off its struggling foundry business.

Rising energy demand from Columbus area data centers has triggered the need for new transmission infrastructure. Under AEP's existing rate structures, the costs of new transmission lines to data centers could be spread to other ratepayers.

Many of AEP's residential, commercial, and industrial customers saw transmission costs rise by $10 monthly in April, the fourth rate increase approved for the utility in three years. Next year, average bill totals will increase another $1.50 a month to support grid reliability, the utility said.

Do you have insight, information, or a tip to share with this reporter? Contact Ellen Thomas via the secure messaging app Signal at +1-929-524-6964.

• Canada's antitrust watchdog is suing Google.
• Canadian regulators say Google abused its position as the largest adtech provider in the country.
• It's the latest in a series of legal challenges brought against the tech giant.

Canada's antitrust watchdog is suing Google over its anti-competitive conduct in its adtech business, the country's Competition Bureau said Thursday.

The Competition Bureau, Canada's independent law enforcement agency responsible for regulating anti-competitive conduct, wants the tech giant to sell two of its adtech products and pay a fine that could total up to 3% of its global gross revenue.

The antitrust watchdog said Google is the largest provider of adtech services in Canada and has "abused" its position to maintain market dominance.

"Google's conduct locks market participants into using its own adtech tools, prevents rivals from being able to compete on the merits of their offering, and otherwise distorts the competitive process," the antitrust watchdog said.

This suit is the latest in a series of legal challenges against Google for alleged anti-competitive behavior.

Earlier this month, the Department of Justice urged District Judge Amit Mehta to force Google to sell off its Chrome browser as a remedy in a landmark antitrust case. In August, Judge Mehta found that Google holds an illegal monopoly in its search business.

In September, the Department of Justice and 17 state attorneys general brought an antitrust suit against Google in the Eastern District of Virginia over its alleged digital ad market monopoly.

That same month, Europe's top court also upheld a 2017 decision in another antitrust case against Google, where it was ordered to pay a €2.4 billion fine.

Advertising is crucial to Google's business. Google parent Alphabet has reported $220.8 billion in revenue from advertising for the first nine months of the year — 87% of its total revenue during that same time period.

Google did not immediately respond to a request for comment.

• Winter storms may disrupt Thanksgiving travel in the Northeast US this year.
• Heavy snowfall is forecast in New England and Great Lakes.
• Lake effect snow could bring up to five feet of snow in northern New York.

Winter storms could disrupt Thanksgiving weekend plans for some of the record 80 million Americans who traveled more than 50 miles from home this year.

Heavy snowfall is expected in New England through Friday morning and areas along the Great Lakes through Saturday, according to the National Weather Service.

Parts of New England could see up to one foot of fresh snow by Friday morning. And over the weekend, a lake-effect snowstorm downwind of Lake Ontario could total up to five feet of snow in northern New York. The lake effect snow is expected to cover from Cleveland to Buffalo.

The lake effect snow is expected to start over the weekend and will likely continue through the next week.

"You can often get thundersnow with it and extremely high rates of snow, so it's a spectacular thing but a relatively small-scale thing," William Churchill, a meteorologist for the National Weather Service, told Business Insider.

Thundersnow occurs when there is lightning during a snowstorm.

The vast majority of Thanksgiving travelers travel by car, according to the American Automobile Association. This year, 71.7 million people were expected on the road.

The number of Americans expected to travel more than 50 miles for Thanksgiving this year was up from pre-pandemic levels. In 2019, there were 77.8 million travelers, according to AAA.