Delays and cancellations in AI data center construction projects in the US are causing disruptions to AI infrastructure investments expected to reach 10 trillion dollars (approximately 14,000 trillion Korean won).
AI companies have secured contracts worth hundreds of trillions of won to ensure computing capabilities, but the companies responsible for constructing data centers are struggling with funding and securing power. With opposition from local residents spreading, data center construction has emerged as a key issue in the upcoming US midterm elections in November.
According to an analysis by the Financial Times, FT, of data from regulatory information analysis firm RegRayor on October 18, local time, at least 47 large-scale data center construction projects in the US have been delayed, withdrawn, or blocked this year. The FT stated, “Measures to temporarily halt or restrict data center construction are being pursued in more than 1,000 communities across the US.” Investment bank Bernstein also analyzed that “only 35% of planned data center projects in the US have a realistic possibility of proceeding.”
◇Funding difficulties despite trillions of won in contracts
The biggest issue is funding for data center companies. Even if they secure long-term contracts with AI companies like OpenAI and Anthropic, the data center companies must first cover the actual construction costs and semiconductor procurement expenses.
SB Energy, a US subsidiary controlled by SoftBank, has secured future sales contracts worth approximately 430 billion dollars, but fulfilling these requires 174 billion dollars in funding. Having yet to complete a single data center, the company has also postponed its initial public offering (IPO) plans.
Nebius, a cloud company invested in by NVIDIA, also revealed that as of last month, it had secured only 20% of the approximately 250 billion dollars needed to secure 5 gigawatts (GW) of data center capacity.
◇Opposition in major US regions… a midterm election issue
Opposition from local residents is also hindering construction. Google, which is considering building a data center in Lea County, New Mexico, has opened a website for residents from the early stages of the project to explain water usage and local investment plans. Oracle’s large-scale data center project in New Mexico has also faced challenges related to power supply, permits, and resident opposition.
Data center construction has also become a political issue ahead of the November midterm elections. In Ohio, both Republican and Democratic gubernatorial candidates are advocating for restrictions on new data center construction. Residents’ concerns about rising electricity costs and water shortages have influenced election pledges.
A semiconductor industry official stated, “The fact that US data center construction issues have become a midterm election topic underscores the significant impact,” adding, “If construction delays persist, they could affect not only NVIDIA’s AI semiconductors but also the demand for high-bandwidth memory (HBM) from Samsung Electronics and SK Hynix.”
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