Henrique Schneider writes:

Data centers have emerged as a crucial element in the realms of geopolitics, energy security and industrial strategy. On the morning of March 1, 2026, three coordinated Iranian drone strikes hit Amazon Web Services facilities in the Gulf, disrupting regional cloud services for days to weeks. The episode crystallized a transition that had been building for years: The quiet warehouses of the digital economy are now contested strategic assets.

The scale of what is being built is difficult to overstate. Meeting projected demand for computational power will require approximately $6.7 trillion of cumulative investment worldwide by 2030, of which roughly $5.2 trillion is tied to artificial intelligence. Hyperscale operators alone plan to spend about $630 billion on capital expenditure in 2026, more than four times the level recorded in the year of the OpenAI GPT-4 launch. The figure exceeds the combined defense budgets of France, Germany and the United Kingdom, and it is being committed by a handful of private companies operating outside the conventional perimeter of strategic planning.

The market itself has expanded accordingly. Estimates converge on a global revenue base of $380 billion to $395 billion in 2025 and a trajectory toward $700 billion to $900 billion by the early 2030s, implying a compound annual growth rate of 11 to 13 percent. Data-center systems spending alone reached $489.5 billion in 2025, a 46.8 percent increase over the previous year. Such growth is no longer an extrapolation of digital transformation; it is the physical correlate of generative AI, with AI-related workloads now accounting for roughly 19 percent of total cloud spending, up from 8 percent two years earlier.

This expansion has shifted the locus of strategic risk. The bottleneck is not financing, talent or even chips. It is power generation. The International Energy Agency projects that data-center electricity demand will rise from 415 terawatt-hours in 2024 to roughly 945 terawatt-hours in 2030 in its base case, with a high-demand path approaching 1,200 terawatt-hours. Goldman Sachs Research forecasts a 165 percent increase in data-center power consumption by 2030.

Grid interconnection in primary markets (larger data center hubs) in the U.S. and Europe now routinely takes four to seven years; in northern Virginia, the world’s largest cluster, queues are longer still. Vacancy in U.S. primary markets stood at a record 1.4 percent at the end of 2025, while project cancellations rose from six in 2024 to 25 in 2025, almost all driven by power and grid constraints rather than tenant demand.

The response has been a vertical reintegration of compute, energy and finance. Microsoft has signed a 20-year contract to restart the Three Mile Island nuclear plant. Amazon has acquired a nuclear-adjacent campus from Talen Energy in Pennsylvania. Google has partnered with Kairos Power on small modular reactors. More than 22 gigawatts of nuclear capacity have been earmarked for data-center use globally, with the first commercial small modular reactor deployments expected in the early to mid-2030s.

Behind the meter, gas turbines, fuel cells and grid-scale batteries are being deployed at a pace that recalls the build-out of independent power producers in the 1990s. Hyperscalers – massive cloud providers such as Amazon, Meta, Microsoft and Google, which operate at global scale – are no longer customers of utilities; in many markets, they are becoming utilities.

This change carries political consequences. Communities that once welcomed data centers as low-impact employers now contest them as energy-intensive neighbors. Ireland has imposed a de facto moratorium on new connections in the Dublin region. The Netherlands has restricted new builds in the Randstad. Several American states, including Virginia and Georgia, are reviewing how grid upgrade costs are allocated between data-center tenants and household ratepayers. Water consumption has emerged as a parallel concern: a single hyperscale facility can withdraw between 11 and 19 million liters per day. Sustainability is no longer an investor-relations exercise but a license-to-operate question. [Continue reading…]