00:00Texas billed its brand as the epicenter of AI, and on Monday its governor ordered every state environmental permit for
00:08data centers frozen.
00:09In Michigan, a town of 5,700 forced a humming data center to go quiet, only to learn robots or
00:18next.
00:18And in Georgia, the fight over a 99-megawatt campus just moved into a courtroom.
00:26Texas wanted to be the epicenter of AI. On Monday its governor slammed on the brakes.
00:33Greg Abbott ordered the Texas Commission on Environmental Quality to stop issuing permits to data centers, period,
00:42until the state's grid operator, ERCOT, and the Texas Water Development Board finish auditing every project in the pipeline.
00:50Those audits demand hard numbers on electricity, water, community impact, ownership and tax breaks.
00:59Simply put, Abbott wrote, Texans must come first.
01:03This is his third escalation since June, when he first told regulators to make data centers pay their own way.
01:09In August he froze new grid connections, but developers building their own power behind the meter could have slipped past
01:18that.
01:18And ERCOT does not cover the entire state.
01:22This order closes both doors.
01:24It follows a water survey that as few as 28% of data centers bother to answer.
01:30And it lands six weeks before Abbott faces voters.
01:35From a statewide freeze to one dead-end street, in Dowajac, Michigan, population 5,700,
01:44Kathy Melvin's quiet block on Louise Avenue became a tourist attraction this year after word spread
01:50that a data center was humming next door.
01:53The 30-megawatt hyperscale data plant had mined Bitcoin in an old stove factory for nearly five years.
02:02Its cooling fans pushing 50 to 62 decibels into backyards.
02:07Residents packed city council meetings.
02:10Mayor Patrick Bakeman, a local barber, pressed the company to meet the neighbors and turn it down.
02:17It did.
02:18On September 2nd, the miners were shipped to Montana.
02:21And the city adopted tougher day and night noise limits.
02:25Now the plant is retooling for AI computing.
02:29$70 million invested.
02:31A $1.3 billion contract.
02:3452 megawatts by November.
02:37And a subsidiary wants to assemble Chinese-designed humanoid robots under the same roof.
02:43Which has Congressman Tim Walberg asking Washington to investigate.
02:49That kind of neighborhood pressure is now making its way into courtrooms in Statesboro, Georgia.
02:56A non-profit called Coastal Community United and 11 individual petitioners have sued the city.
03:03In developer 4AM Development in Bullock County Superior Court,
03:07They want a judge to throw out the rezoning of about 26 and a half acres on Burkhalter Road.
03:14Land that was set aside for high-density housing.
03:18For a 99-megawatt data center.
03:21On June 2nd, Statesboro rewrote its development code to allow small-edge data centers while explicitly banning
03:29hyperscale ones.
03:31A month later this application arrived.
03:34Sitting one megawatt shy of that line.
03:36The petition also cites a housing study showing half of local demand is for apartments.
03:43Meanwhile in Gibraltar, Michigan.
03:46The city is asking a federal judge to dismiss a developer's challenge to its one-year moratorium.
03:53Arguing a pause is not a final decision a court can review.
03:58And some towns are not waiting for a lawsuit.
04:01Raritan Township, New Jersey, just banned data centers outright.
04:07In every zoning district, the amended code even blocks the workarounds.
04:12Warehouses.
04:13Flex space and research buildings cannot contain one.
04:17The only exception is a small server room supporting the building it sits in.
04:22It is part of a wave.
04:24Tonight in Maryland, the Baltimore County Council votes on stretching its moratorium through December
04:302027.
04:32Councilman David Marks says the public needs more time.
04:36The Maryland Tech Council's Kelly Schultz says the county is leaving opportunity on the table.
04:42Jasper County, South Carolina held its hearing Monday on a one-year pause, closing a loophole
04:49that lets data centers in by right.
04:52Galesburg, Illinois took up a 180-day freeze.
04:56And Kirksville, Missouri voted unanimously, after three hours of testimony, to confine any
05:03data center to a single four-acre industrial district.
05:09California went the other direction from a ban.
05:12Make them pay.
05:13Governor Gavin Newsom signed two bills Monday that their author, San Diego Senator Steve Padilla,
05:20calls some of the strongest ratepayer and environmental protections from data center costs anywhere.
05:27In the country, Senate Bill 886 passed the Senate 28-10 in the Assembly 62-7.
05:35Senate Bill 887 cleared 30-8 in 59-11.
05:41Together they require data centers to pay every dollar of transmission upgrades needed to connect,
05:48cover their own generation costs, and shoulder a bigger share of wildfire mitigation and liability.
05:55Padilla says Big Tech keeps promising to be a good neighbor.
05:59And these laws make that promise enforceable.
06:02His district holds the largest proposed data center in the state,
06:07a one-million-square-foot AI facility in Imperial County,
06:11where supervisors imposed a moratorium in June and the developer threatened a restraining order.
06:19Here is why Abbott had to widen his freeze.
06:22Developers are building their own power.
06:24The operator, Kodiak Gas Services, based just outside Houston,
06:29signed a six-year contract Monday to supply 76 megawatts of behind-the-meter baseload
06:35power to a data center in West Texas.
06:39Roughly 40 natural gas reciprocating engines,
06:43plus all the balance of plant,
06:45start arriving in the fourth quarter and scale up through early next year.
06:49The operator is not named,
06:52but Kodiak says it holds a lease with an investment-grade hyperscaler.
06:57And a GPU designer is guaranteeing that lease.
07:01CEO Mickey McKee calls it an ideal fit,
07:05the right size,
07:06inside Kodiak's existing West Texas footprint,
07:10with a customer that can pay.
07:12It is the company's second long-term primary power deal,
07:16and it is targeting 2 gigawatts of generation by 2030.
07:20Sites like this never touch ERCOT's queue,
07:24which is exactly why the governor pulled the environmental permits into his audit.
07:30And the financial commitment behind all that on-site power is staggering.
07:36Generac,
07:37the Wisconsin generator maker founded in 1959,
07:40has signed a long-term agreement to supply backup generators across Amazon's data center portfolio.
07:48Initial deliveries are worth about $2.4 billion over the next two years.
07:54Over the life of the deal,
07:56Generac expects to ship up to $8 billion of equipment.
08:00The filing with the Securities and Exchange Commission includes a sweetener.
08:04Amazon can acquire nearly 1.7 million Generac shares at roughly $200 apiece,
08:13300,000 of them immediately and the rest as payments flow.
08:17CEO Aaron Jagdfeld calls it a generational growth opportunity and says it justifies the company's
08:24bet on vertically integrated large megawatt manufacturing in Beaver Dam and Sussex.
08:31Its newest units run up to three and a quarter megawatts,
08:35with lead times of 50 to 60 weeks.
08:39That appetite is now reshaping where venture money goes.
08:43Global climate tech venture investment reached $26 billion in the first half of this
08:49year, up 55 percent.
08:53According to TrackerCurrents.ai,
08:56and Semaphore reports the driver is not climate policy.
09:00It is the data center.
09:02Startups selling cooling, power and grid gear to AI campuses are seeing valuations jump
09:08just as Washington pulls back on.
09:11Decarbonization support.
09:13Tom Kaiv at One Ventures says one portfolio company,
09:17Blue Energy, which makes modular parts to build advanced nuclear plants faster,
09:23watched its pre-IPO valuation climb by orders of magnitude.
09:27Enterprise software investors, he says, are now sitting in his rounds trying to understand
09:35desiccant cooling.
09:36S2G's Franco Sullivan even backed a maker of low-emission diesel generators.
09:43Decarbonizing by stealth, he says,
09:46the warning label is his too.
09:48The driver of all of this,
09:50the data center bubble,
09:52might pop.
09:53Investors gather in New York this week for Climate Week to find out.
09:58Thanks for watching.
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