Data Center Construction Halted Amid Rising Backlash Across U.S.
New York Governor Kathy Hochul has signed a law pausing the construction of new hyperscale AI data centers, prioritizing community concerns over potential productivity gains. As of now, there is growing opposition to data centers across the U.S., despite increasing demand for AI services. This backlash, although politically motivated, is expected to create investment opportunities for companies with existing infrastructures.
In Texas, Governor Greg Abbott ordered regulators to audit pending data center projects, introducing delays in the construction pipeline. Riot Platforms, Inc. secured a 20-year, $9.1 billion deal with Anthropic for 191 megawatts of data-center capacity, highlighting the demand for existing infrastructure amidst the slowdown in new projects. As the situation develops, industry leaders like Riot, Core Scientific, and CleanSpark could benefit from the constrained construction landscape, while companies like Vertiv Holdings Co. face risks from potential delays in future orders that correlate with new data center builds.
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