{"id":18925,"date":"2026-07-27T15:30:38","date_gmt":"2026-07-27T10:30:38","guid":{"rendered":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=18925"},"modified":"2026-07-27T15:30:38","modified_gmt":"2026-07-27T10:30:38","slug":"off-grid-data-centers-arent-the-panacea-that-some-ai-firms-hoped","status":"publish","type":"post","link":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=18925","title":{"rendered":"Off-grid data centers aren&#039;t the panacea that some AI firms hoped"},"content":{"rendered":"<p><script>\r\n  atOptions = {\r\n    'key' : '644b717812d811d6a1c1fc5b6ccd6fa6',\r\n    'format' : 'iframe',\r\n    'height' : 90,\r\n    'width' : 728,\r\n    'params' : {}\r\n  };\r\n<\/script>\r\n<script src=\"https:\/\/www.highperformanceformat.com\/644b717812d811d6a1c1fc5b6ccd6fa6\/invoke.js\"><\/script>\r\n<br \/>\n<br \/><img decoding=\"async\" src=\"https:\/\/images.axios.com\/sa2UyMGWAPKwXRugbqDwXCvoNso=\/0x0:1920x1080\/1366x768\/2025\/09\/15\/1757972228619.jpeg\" \/><\/p>\n<p>Local backlash and reliability concerns are challenging the vision of an <a href=\"https:\/\/www.axios.com\/technology\/automation-and-ai\" target=\"_blank\">AI<\/a> boom built quickly using large off-grid data centers.<\/p>\n<p><strong>Why it matters: <\/strong>If giant projects stumble, trillions of dollars in AI investment and the industry&#8217;s plans to rapidly expand data centers could be at risk.<\/p>\n<hr>\n<p><strong>The big picture: <\/strong>In an effort to speed AI development, some companies are building data centers powered mainly by onsite generation rather than waiting years to connect to the electric grid.<\/p>\n<ul>\n<li>There are 59 data centers with a combined capacity of about 90 gigawatts that plan to build their own power &#8220;behind-the-meter&#8221; using sources like gas turbines, generators and fuel cells, <a href=\"https:\/\/cleanview.co\/reports\/behind-the-meter-data-centers\" target=\"_blank\">according to a report<\/a> from research firm Cleanview.<\/li>\n<li>A smaller subset is trying to run large campuses mostly on behind-the-meter power as a way to move more quickly than the local utility and the grid can.  <\/li>\n<li>Infrastructure risk analysis firm Occam Edge <a href=\"https:\/\/occamedge.substack.com\/p\/dark-gigawatts\" target=\"_blank\">tracks<\/a> 12 projects where onsite power is the primary serving supply, representing about 10.6 GW of announced capacity.<\/li>\n<\/ul>\n<p><strong>State of play: <\/strong>Recent hiccups are highlighting the challenges that come with bypassing the grid.<\/p>\n<ul>\n<li>Earlier this month, New Mexico&#8217;s top land official <a href=\"https:\/\/www.kob.com\/news\/top-news\/new-mexico-land-commissioner-denies-project-jupiter-pipeline-request\/\" target=\"_blank\">rejected<\/a> a gas pipeline meant to supply onsite fuel cells for Oracle&#8217;s 2.5 GW &#8220;Project Jupiter&#8221; data center campus, part of Oracle and OpenAI&#8217;s Stargate initiative. <\/li>\n<li>The regulatory set back could contribute to a <a href=\"https:\/\/hntrbrk.com\/investigations\/bloom\" target=\"_blank\">years-long delay<\/a>.<\/li>\n<li>A week later, a much smaller <a href=\"https:\/\/vantage-dc.com\/data-center-locations\/north-america\/ashburn-ii-virginia\/\" target=\"_blank\">off-grid data center in Virginia<\/a>, saw its onsite gas turbines <a href=\"https:\/\/www.wusa9.com\/article\/news\/investigations\/vantage-data-center-loudoun-county-air-pollution-piedmont-environmental-council\/65-ffa00add-bb5a-4b8b-8873-f28b577c6abe\" target=\"_blank\">knocked offline for 24 hours<\/a>, forcing it to run on dirty backup diesel generators during already bad air quality from the Canadian wildfires. <\/li>\n<\/ul>\n<p><strong>Local residents<\/strong> complained of burning lungs and 60-decibel level noise, and a supervisor called for new laws to regulate generators.<\/p>\n<p><strong>Catch up quick:<\/strong> Chief developers of this off-grid approach include OpenAI, and its partners Oracle and Crusoe, which have worked on OpenAI&#8217;s Stargate campuses. <\/p>\n<ul>\n<li>A Stargate project in Abilene, developed by Crusoe, <a href=\"https:\/\/www.theinformation.com\/newsletters\/ai-infrastructure\/developers-openais-stargate-data-center-face-higher-costs-energy-challenges\" target=\"_blank\">reportedly<\/a> went offline for days at a time due to issues with power and cooling equipment.<\/li>\n<li>Another off-grid player is Elon Musk, who rattled the energy world when he built xAI&#8217;s Colossus 1 using mobile gas turbines in just a few months. While it was initially off-grid, it&#8217;s now grid-connected and selling compute to Anthropic.<\/li>\n<li>Despite a <a href=\"https:\/\/www.theguardian.com\/technology\/2026\/apr\/14\/naacp-lawsuit-elon-musk-xai-memphis\" target=\"_blank\">lawsuit from the NAACP<\/a> over Colossus 1, Musk is now using gas turbines to power Colossus 2 (with compute sold to Google), and earlier this month <a href=\"https:\/\/www.axios.com\/pro\/climate-deals\/2026\/07\/17\/elon-musk-apr-energy-mobile-gas-turbines\" target=\"_blank\">bought<\/a> a mobile gas turbine company.<\/li>\n<\/ul>\n<p><strong>What they&#8217;re saying: <\/strong>Critics argue off-grid data centers could prove <a href=\"https:\/\/www.distilled.earth\/p\/openais-stargate-data-centers-are\" target=\"_blank\">slower and more costly<\/a> to deploy, <a href=\"https:\/\/occamedge.substack.com\/p\/dark-gigawatts\" target=\"_blank\">less reliable<\/a> to run, and more expensive than expanding the electric grid.<\/p>\n<ul>\n<li>&#8220;This is a flimsy way to deploy AI,&#8221; says energy investor Jigar Shah, who <a href=\"https:\/\/www.latitudemedia.com\/news\/open-circuit-the-off-grid-data-center-fantasy\/\" target=\"_blank\">predicts<\/a> much of the bullish off-grid deployment figures won&#8217;t materialize. <\/li>\n<li>Power engineers are worried that off-grid data centers won&#8217;t meet reliability targets, says Occam Edge founder and CEO Christian Okoye, who <a href=\"https:\/\/occamedge.substack.com\/p\/dark-gigawatts\" target=\"_blank\">compares<\/a> &#8220;Dark Gigawatts&#8221; to the &#8220;Dark Fiber&#8221; of the dotcom bust. <\/li>\n<li>&#8220;It&#8217;s a time of desperation,&#8221; says Josh Wong, founder and CEO of ThinkLabs AI, which helps utilities find more capacity on their current grids. &#8220;The [off-grid] business model is bolt-on.&#8221;<\/li>\n<\/ul>\n<p><strong>Follow the money:<\/strong> Investors are lacking insight into the reliability of off-grid data centers, says Okoye. <\/p>\n<ul>\n<li>Investors faced with the uncertainties of off-grid data centers could decide not to underwrite them. <\/li>\n<li>S&amp;P Global Ratings <a href=\"https:\/\/finance.yahoo.com\/markets\/stocks\/articles\/oracles-credit-risk-nears-18-151000986.html\" target=\"_blank\">recently downgraded<\/a> Oracle&#8217;s long-term issuer credit rating to BBB- from BBB, just one step above junk status, due to its massive data center spending, which includes investment in onsite power infrastructure.<\/li>\n<li>Trillions of dollars are riding on whether large off-grid data centers can work as advertised, justify their added cost and win local support.<\/li>\n<\/ul>\n<p><strong>What&#8217;s next:<\/strong> More high-profile problems building and running off-grid data centers could lead to a reckoning that the AI boom will be a lot more grid-powered than many AI companies hoped. <\/p>\n<script async=\"async\" data-cfasync=\"false\" src=\"https:\/\/pl30214220.effectivecpmnetwork.com\/9ab3d4df8a7e1a6171e16ddbf732cc19\/invoke.js\"><\/script>\r\n<div id=\"container-9ab3d4df8a7e1a6171e16ddbf732cc19\"><\/div>\r\n\n","protected":false},"excerpt":{"rendered":"<p>Local backlash and reliability concerns are challenging the vision of an AI boom built quickly using large off-grid data centers. Why it matters: If giant projects stumble, trillions of dollars in AI investment and the industry&#8217;s plans to rapidly expand data centers could be at risk. The big picture: In an effort to speed AI&#8230;<\/p>\n","protected":false},"author":1,"featured_media":18926,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.axios.com\/sa2UyMGWAPKwXRugbqDwXCvoNso=\/0x0:1920x1080\/1366x768\/2025\/09\/15\/1757972228619.jpeg","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-18925","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-political-news"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/18925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18925"}],"version-history":[{"count":0,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/18925\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/media\/18926"}],"wp:attachment":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}