Power, Permits and Pushback: The Risks Facing U.S. Data-Center Growth
- Nearly three-quarters of data centers under construction are in the U.S., where limited power supply and rising AI-compute needs are pushing developers toward new technologies and on-site generation, adding execution risk.
- Institutional investors and lenders evaluating U.S. data-center developments face significant location-specific risks: 52% of projects are in counties where previous projects have been withdrawn or data-center-specific rules enacted.
- Securing power alone may not de-risk a project. Investors and lenders may also need to assess community and regulatory exposure, water and physical hazards, and insurance gaps that could cause delays or losses.
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MSCI Real Capital Analytics | MSCI GeoSpatial Asset Intelligence | MSCI ACWI IMI Index
Meeting growing AI-compute demand could require up to USD 5.2 trillion of data-center investment by 2030.1 For institutional investors, that creates potential opportunities in the physical infrastructures supporting AI. Whether new construction can match the pace of ambitious AI-compute growth projections will depend partly on whether projects can secure power and overcome local and physical constraints. With 70% of global data-center capacity under construction located in the U.S., these risks are especially relevant there.
An arduous permitting process and limited electricity transmission and distribution infrastructure mean the average wait for new power projects in regions where data centers are being developed is over five years (64 months).2 Newer data centers also require far more power than earlier facilities, reflecting the greater compute needs of AI. The median energy capacity of data centers built rose from 11 megawatts (MW) in 2016 to 130 MW by June 2026.
How to use this chart: Hover over a point or bar to see the number of projects and combined energy capacity in MW. Data as of Aug. 20, 2026. This chart shows the energy capacity in megawatts of 2,034 operational data centers and 696 that are planned or under construction.
Long interconnection queues leave developers with two broad options: wait for grid access or bring their own power on-site. Some projects have committed to first-of-a-kind energy-generation technologies such as small modular nuclear reactors or long-duration battery storage, while others are planning to construct new gas plants.3
These approaches can bypass grid queues but introduce other risks, including delays in commercial readiness and shortages of power equipment.
Local opposition is also affecting developments. At least 75 U.S. data-center projects were delayed or cancelled in Q1 2026, matching the total for all of 2025.4
Yet development continues in many of the same places: More than half of projects under development are in counties where earlier projects were withdrawn or where stricter requirements have been adopted.
How to use this chart: Hover over a bar to see site counts and aggregate energy capacity. Data as of Aug. 20, 2026. This chart shows the overlap of data-center-opposition outcomes in U.S. counties where 838 data centers are under construction, planned or acquired as a development site. Source: MSCI Research, Datacentertracker.org
Further regulations may follow. Around 80% of U.S. data centers under construction or planned are in jurisdictions with active or pending data-center-related legislation, including moratoriums, ordinances and zoning restrictions, potentially increasing compliance costs.5
Moratoriums can halt projects that have not begun construction. Pending moratorium decisions affect about 14% of planned data-center locations. Local elections add another source of uncertainty: 12% of planned sites are in jurisdictions with upcoming elections where candidates may influence pending data-center rules.
How to use this chart: Hover over a cell to see the share and number of sites affected, including whether the overlap occurs at the county or state level. Data as of Aug. 20, 2026. This chart shows the geographic overlap at the state or county level between different stages of data-center locations under development with active or pending legislation, or if the specific local authority will have members up for re-election in the upcoming November 2026 midterms. Source: MSCI Research, Datacentertracker.org
The focus of local opposition has shifted toward water use, zoning and energy affordability, rather than the broader environmental concerns cited a year ago.6
How to use this chart: Hover over a bar to see the change in share from H1 2025 to H1 2026. Data as of July 2026. This chart shows the change in proportional share of topics cited in data-center opposition actions between H1 2025 and H1 2026. Source: MSCI Research, Datacentertracker.org
How to use this chart: Hover over a dot to see its project information and hazard percentile values. Data as of Aug. 20, 2026. This chart shows river low-flow and water-scarcity hazard percentiles for data centers under development. Higher hazard percentiles indicate greater relative exposure compared with assets of MSCI ACWI IMITM Index constituents.
Of 365 data centers planned or under construction near rivers, where local communities may rely more heavily on water resources, 50 (14%) have elevated exposure to both water scarcity and river low-flow conditions relative to assets of MSCI ACWI IMITM Index constituents.7 These projects are concentrated in Texas, Illinois, Oregon and Georgia.
Investors assessing U.S. data-center projects may therefore want to compare energy procurement, community relations and management of physical hazards. Insurance is another consideration: Project values have risen from around USD 150 million to as much as USD 20 billion for a hyperscale campus — a large data-center complex built to support very high computing demand — while insurance capacity has not kept pace. When a project cannot be fully insured, lenders and developers may bear losses above insured levels from natural catastrophes, power outages or major construction delays.8 Such losses could create credit risk for lenders and add to the risks facing markets that depend on timely data-center buildout to support rapid AI adoption.
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1 “The cost of compute: A $7 trillion race to scale data centers”, McKinsey Quarterly, April 28, 2025.
2 Based on the locations of 838 data centers under construction, planned or acquired as a development site as of June 16, 2026 in MSCI Real Capital Analytics data, mapped to the corresponding regional grid’s average time from interconnection request to commercial operations. For more details, refer to “Queued Up: Characteristics of Power Plants Seeking Transmission Interconnection,” Lawrence Berkeley National Laboratory, June 2026.
3 “Time to go nuclear? Inside the battle to power AI”, Reuters, Dec. 17, 2025.
4 “Q1 2026: Data Center Watch Report,” Datacenter Watch, June 2026.
5 Based on the locations of 838 data centers under construction, planned or acquired as a development site as of June 16, 2026 in MSCI Real Capital Analytics data, mapped to corresponding county and state boundaries of opposition events compiled by “Tracking American AI Data Center Buildout,”, Data Center Tracker, July 2026.
6 “Water joins energy as top AI flashpoint,” Axios, June 25, 2026.
7 Based on current hazard percentiles relative to the constituents of the MSCI ACWI IMI Index for water scarcity and river low flow, as defined by the methodologies for MSCI GeoSpatial Asset Intelligence.
8 “Meta and BlackRock’s $14bn data center exposes lenders to insurance gap,” Financial Times, Aug. 17, 2026.
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