The data center era that's reshaping America

Nothing is driving more new U.S. economic investment or political volatility than data centers. Why it matters: They're the Great Subplot of 2026, THE topic animating the AI race and elections. Everyone needs to understand the size, scope and sentiment surrounding them. The big picture: It's almost impossible to wrap your brain around the scale of the cash dedicated to this buildout — now the biggest capital project in human history. The five biggest hyperscalers — Amazon, Microsoft, Google, Meta and Oracle — are set to spend more than $750B on capital expenditures this year. That's up 67% from last year, and roughly 75% of it is earmarked for AI infrastructure. The three things about data centers that you won't be able to hide from: They're coming for everything. Hyperscalers aren't bottlenecked by GPUs alone. Big Tech is hungry for everything physical in order to get these things built. The richest companies on earth are now your main competition for things like land, cooling systems and turbines. They're straining the grid. Utilities now forecast a sixfold jump for 2030's peak electric demand growth from predictions just three years ago. That's driven by data centers, and our aging systems can't keep up. They're a defining political issue. Both Republicans and Democrats want to capitalize on the populist line of limiting or banning their construction. It's happening at all levels — the federal government, at the state level and in local communities. Top Republicans tell me data centers alone could cost them control of the Senate. The issue boiled over last week, with politicians who had embraced data centers running for cover. Pennsylvania Gov. Josh Shapiro (D), who had boasted last year about landing a huge data center, imposed strict new requirements on new ones. In Michigan, Republican U.S. Senate nominee Mike Rogers backed a one-year moratorium. Earlier this month, Texas Gov. Greg Abbott (R) froze new data centers. The bottom line: Data centers are proxy fights over AI, jobs, the environment, energy production and energy use. Your cheat sheet 🤔 What they actually do: They're giant buildings filled with chips used to train AI models or process the queries sent to them. Their size is generally measured in megawatts, the units of electrical capacity needed to run them and cool the infrastructure inside. 📈 Total online: About 4,000 and counting across the U.S., with 580 hyperscale facilities. 🗳️ Total delayed by politics: At least 75 projects nationwide totaling roughly $130B in potential investment were impacted in Q1 2026. 💡 Average site capacity: 62 MW for large projects currently in the pipeline. (For comparison, the typical site in Virginia at the end of 2024 averaged roughly 34 MW.) 💰 Average cost to build: Roughly $2.1B-2.4B all in for that 62 MW project. 🧑‍💻 Average employees: About 50 to keep the average Virginia site running. That number balloons to a peak of 1,500 workers on site during the 12-18 months of construction Competition, for everything Illustration: Sarah Grillo/Axios. Stock: Getty Images The richest companies on earth are the highest bidders for the physical components of pretty much anything needed to build. Why it matters: Data centers need a hell of a lot of infrastructure to exist and operate. The hyperscalers can buy it all, with unlimited resources and endless timelines. The big picture: Data centers are singlehandedly propping up private construction across America, adding more than $21B in new spending over the past year even as the rest of the industry shrank by over $100B. John Deere shares spiked this week after sales in its construction and forestry segment jumped 18% year over year, which the company linked directly to the data center buildout. Every input you can imagine is being scrambled: ⚡️ Electrical gear: The North American transformer supply chain chief of Hitachi Energy, the world's largest transformer maker, says that 44% of data center leaders report utility wait times beyond four years. 🪧 Land: Amazon snagged 188 acres in Northern Virginia last year for $700M — $3.7M an acre — for one of its data center projects. A homebuilder had originally assembled the parcel for $51M, planning roughly 500 homes on the site. 👷 Labor: The construction industry needs almost 350K more workers to meet demand this year. Analysts say there aren't enough specialized workers to complete cooling and electricity jobs. The bottom line: Anything being built could come into competition with the best-capitalized buyers in the history of humanity. Water use, overhyped Illustration: Sarah Grillo/Axios. Stock: Getty Images It's basically true that a hyperscale data center directly soaks up roughly as much water as one of the most famous golf courses in America. 🚜 Between the lines: Even when you take into account that data centers indirectly use roughly 12x more water to generate the power to run them, the numbers don't change on a macro level. The water use of every data center in America in 2023 equaled less than 1% of the water used to irrigate the nation's agriculture that year. ⚠️ Smart way to look at this: Though their water use is a rounding error nationally, individual data centers can still have massively outsized impacts on local watersheds. That's where the backlash will live. Electricity use, underhyped Illustration: Sarah Grillo/Axios. Stock: Getty Images On the flip side, data centers' electricity use is likely more massive than you imagine — and demand is surging. Data centers used 4.4% of U.S. electricity in 2023. It's forecast to be almost 12% by 2030. 🏭 Smart way to look at this: Energy is rapidly shifting from an operating cost to an open competition and strategic constraint. Our grid is running out of room faster than it can build more. Utilities simply can't add the power plants, transmission lines and equipment needed fast enough. It's getting so fraught that PJM, America's largest grid operator, proposed that data centers without their own power plants get cut from the grid first in times of high stress. OpenAI's job board tells you where this is headed. They want a power trading lead for their data center portfolio. 💸 That capacity shortage is exactly what's driving up electricity costs for everyone. PJM saw its capacity prices spike by 11x in just a few years — and utilities pass that on to monthly bills. Meta's massive play The Hyperion construction site. Photo: Meta Meta is committing more than $50B to build Hyperion, one of the largest data centers in America, in rural northeastern Louisiana. ⚡️ The size: Its capacity upon completion sometime around 2032 will be 5 GW (roughly 80x the average project mentioned above), powered by 10 new natural gas plants paid for by Meta. The construction site is massive — five miles long and a mile wide. 🧠 What it'll do: Hyperion is at the heart of Meta's plan to have compute power ready for what it believes is the era of superintelligence. 👋 An out: Meta only owns 20%. The rest is owned by funds managed by Blue Owl Capital, with Meta leasing the campus. That gives Meta flexibility to walk away if the AI boom crumbles, though it could still owe money if the property's value drops too far. 💵 The impact: Meta is touting a ton of positive local benefits, like infrastructure investments and huge bonuses for teachers. But The New York Times found rent costs are spiking as construction workers move in — and noted it'll take years to see if state and local incentives pan out. 🤑 Its competition: Nvidia announced over $100B in guarantees this week to back an 8 GW project in Ohio that'll power OpenAI. A new kind of politics Reproduced from Gallup. Chart: Axios Visuals The politics of data centers only runs one way right now: against them, almost astonishingly so in our divided America. How people feel: More than 70% of Americans oppose the construction of a data center in their area, according to Gallup — more than a nuclear power plant. In Virginia, America's data center heartland, support has halved in just three years. The big picture: You can be sure this will spill over into the midterms. A majority of competitive House districts this fall have data centers under construction or in the planning stages. All of the congressional and gubernatorial ads tracked by AdImpact that mention data centers are against them. Between the lines: This brutal bipartisan backlash means the era of states and localities paying AI and other tech companies to show up and break ground might be ending. For two decades, the calculus has been pretty simple: arrive with capital and jobs and get tax breaks and quick permits. Now people are pissed off about these monstrous buildings and worried their local government is getting fleeced by a Big Tech company that doesn't care about them. The other side: Most positive stories you'll find from communities with data centers got them well before the AI boom, and there's been enough time for civic benefits from tax revenue to become visible. ‼️ Go deeper: Data center uproar scrambles the midterm election. Read the memo: GOP issues stark warning to AI companies on data centers. 📈 If you're a CEO or on a CEO's team: Ask to join Jim's new weekly Axios C-Suite newsletter.

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