00:00Across America, the backlash against AI data centers is turning into open confrontation.
00:06In one Maryland county, supporters and opponents faced off in dueling protests outside the
00:13government building, from a courtroom showdown in Kentucky, to a record-breaking strain on the
00:19power grid, to an oil giant agreeing to burn gas for a Microsoft supercomputer.
00:25Here's what's unfolding right now.
00:29It's becoming one of the most visible flashpoints in the country, and this week it played out
00:34on the streets of Largo, Maryland.
00:37Dozens of residents rallied outside the Wayne K. Curry administration building in Prince
00:43George's County, demanding leaders halt the permitting and construction of new data centers.
00:49But this time they weren't alone.
00:51A group of counter-protesters in matching orange shirts and hats showed up to defend the facilities.
00:57And the jobs they promise.
01:00Council Chair Crystal Oriata confirmed a vote on a two-year moratorium is coming next week.
01:07Yet many in the crowd said a temporary pause doesn't go nearly far enough.
01:12What they want, they told reporters, is not a moratorium at all, but a permanent ban.
01:20That grassroots anger is increasingly ending up in front of a judge.
01:25In Cave City, Kentucky, the local fight has become a full-blown legal battle.
01:31After the city council passed a data center moratorium in May, the Kentucky Industrial
01:37Alliance sued, arguing the pause was unreasonable and that the council failed to justify why it was
01:44even necessary.
01:45But this week, the city's attorneys fired back in Barron Circuit Court, filing a motion to
01:51dismiss the case outright.
01:53They argue the alliance has no legal standing to sue, and that it submitted what they called
01:59a woefully incomplete application to the Planning Commission.
02:03In the first place, it's a small-town clash with outsized implications.
02:08As communities across the country test just how far local governments can legally go to
02:14keep data centers out, and the reason these communities are so anxious came roaring into
02:21view this week.
02:22In the form of a number on a grid operator's screen, as a brutal heat wave gripped the eastern
02:29United States.
02:30PJM, the nation's largest grid operator, forecast that electricity demand would climb toward
02:37166,000 megawatts, threatening to break an all-time summer record that has stood since 2006.
02:46On the ground, the strain was immediate.
02:49Utility company ComEd warned customers across Chicago's west side and its western and southwestern
02:55suburbs that the local grid had reached what it called a critical level, with AI data centers
03:02piling new, round-the-clock demand onto an aging system.
03:07Moments like this are becoming the new normal.
03:09A warning of the summers to come as the AI build-out accelerates.
03:15So how do you feed that bottomless appetite for power?
03:19One of the biggest players just gave a startling answer.
03:23Burn natural gas.
03:24And lots of it, oil giant Chevron has signed a 20-year agreement to supply electricity to
03:31a massive Microsoft data center campus near Pecos in west Texas.
03:37The project, known as Project Kilby, pairs the AI campus with a co-located gas power plant
03:44capable of generating about 2.67 gigawatts.
03:49One of the largest such deals ever struck between a U.S. oil major and a technology company.
03:56Chevron says most of that power will come from gas turbines built by GE Vernova.
04:02With a final investment decision expected by year's end and first electricity targeted for
04:082028.
04:09It's a vivid sign that the AI boom is now reshaping not just the tech industry, but the energy business
04:17itself.
04:18The strain on the power grid is only half the story.
04:22Water tells the other half.
04:24A sweeping new analysis found that about two-thirds of the more than 800 AI data centers
04:31now planned across the United States are slated for land that has been gripped by drought over the
04:36past year.
04:38That's more than 500 thirsty facilities heading straight for regions that can least afford
04:44to share their water in Georgia, where the entire state is now facing severe to exceptional
04:51drought and wildfires are burning in the South.
04:55The concern is especially acute.
04:57A single large data center can consume up to a billion gallons of water a year.
05:02Little wonder that 36 states are now weighing new rules to force these facilities to
05:08disclose and limit exactly how much water they draw.
05:13State lawmakers are no longer just talking.
05:17A wave of new laws took effect this week.
05:20As of the first of the month, Florida now bars utilities from passing data center costs onto
05:26residential and small business customers, requiring the largest users to pay their full cost of
05:33service.
05:34The same day, Arizona began a three-year freeze on its data center sales tax exemption.
05:41And Illinois paused its own tax incentives for the industry.
05:45Virginia, meanwhile, started charging data centers a new consumption tax on every kilowatt hour they use.
05:54Taken together, it marks a decisive turn.
05:57After years of showering these projects with generous incentives to lure them in, states are now moving
06:04just as aggressively to rein them in and shield ordinary rate payers from the soaring costs.
06:12Yet even amid that regulatory crackdown, the cranes keep rising.
06:17This week, Microsoft broke ground on a brand new data center in La Porte, Indiana,
06:23and paired the announcement with something unusual.
06:27Alongside the construction, the company launched the state's very first Microsoft Data Center Academy,
06:34in partnership with Ivy Tech Community College, aimed at training local residents to fill the
06:40technical jobs these facilities create.
06:43It's a deliberate strategy, as opposition mounts nationwide over power bills and water.
06:49Microsoft is betting that visible local investment, in classrooms as well as in concrete,
06:56can help win over the very communities that so often push back.
07:00For La Porte, it's a promise of good-paying jobs.
07:04For the broader industry, it's a template for diffusing a fast-growing backlash.
07:10And behind every one of these projects is a torrent of money that just keeps rising.
07:15This week, Las Vegas-based data center giant Switch kicked off a private funding round led by the
07:23venture. Capital powerhouse Andresen Horowitz, aiming to raise about $2 billion.
07:30The round would value Switch at nearly $50 billion including debt.
07:35A staggering leap from the $11 billion it was worth when investors took it private back in 2022.
07:42Andresen Horowitz alone is committing $400 million.
07:47And the company has hired J.P. Morgan and Goldman Sachs as it prepares for a possible public offering.
07:54As soon as next year, with marquee clients like NVIDIA, Google, and Tesla,
08:00Switch is a reminder that for all the fights unfolding on the ground,
08:05Wall Street still sees data centers as one of the hottest assets on Earth.
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