Large-scale datacentre projects worldwide are being challenged or cancelled, threatening the global AI revolution as infrastructure energy demands ramp up. According to the Uptime Institute, which inspects and rates datacentres, approximately half of 250 global projects exceeding 100MW in energy demand announced between 2021 and 2024 will either not happen or face completion delays.
Energy and supply chain hurdles
Jay Dietrich, a research director at Uptime, cited multiple factors working against proposed datacentre projects, including proposals from developers without datacentre experience, lack of committed tenants, and the massive size and energy consumption of individual projects. “The global supply chain just cannot support the level of projects out there, on the timeline that is projected. The scale is such that it’s going to slow things down,” he said.
Supply chain issues, particularly obtaining chips, add to the challenges. Uptime noted that even with cancellations and delays, there will still be an “unprecedented and rapid” increase in power required over the next five years.
Local opposition and legal battles
The 2,000-acre Prince William Digital Gateway site in Virginia, USA, faced opposition due to its proximity to a Civil War battlefield. A legal brief argued that “if the development is allowed to proceed, the solemn nature of this historic site would become marred by sitting in the shadow of the monstrous datacentres.” The project is now in doubt after a local court ruling halted it and a key backer pulled out.
Other cancelled mega-projects include Project Range in Arizona and the Cyberjaya campus in Malaysia. In Amsterdam, an Australian datacentre developer recently sued the Dutch grid after its connection request was turned down, signalling potential conflict between datacentre projects and other electricity users like homes and hospitals.
Impact on AI companies
This backlog poses problems for AI firms needing datacentres to train and operate models. Google admitted its cloud business is “compute-constrained” as demand for more powerful AI services increases. Uptime said we are entering an era of mega-gigawatt datacentres, identifying six projects last year each aiming for at least 5GW of power—five in the US and one in the UAE. For perspective, Ireland’s peak energy demand is 6GW.
Taking planned projects announced last year alone, and assuming they run at 25% of planned power capacity, they would consume 1.3% of the world’s projected electricity usage for 2025, nearly doubling current datacentre demand. About 80% of the new power demand comes from US projects.
Grid strain and renewable challenges
Uptime is not optimistic about meeting these power needs. “Surging datacentre power demands, particularly in North America, cannot be supported by power grids already operating under heavy strain,” said Uptime in a January report. In California, datacentres stand empty for years because the local grid cannot supply power. In the UK, the government’s ambitions to make Britain an AI superpower appear underpinned by minimal attention to tradeoffs and resources needed, according to Guardian investigations.
Andrew Batson, global head of datacentre research for JLL, expressed confidence that capacity will be built, citing improvements in battery storage and onsite power generation. “I am confident that the industry will work through the energy challenges,” he said. However, an Uptime report in January noted that the seven largest planned datacentres propose a combined 45GW of onsite power, primarily from gas—equivalent to the UK’s peak energy demand.
Despite optimism from some observers, the Prince William Gateway submission acknowledged datacentres are a “fundamental part of the technology infrastructure that supports the modern economy,” but local resistance and universal problems like energy provision are hampering this global revolution.
