December 23, 2025

Market overview (Global | 23 Dec 2025 UTC)

AI-driven capacity buildouts continue to pull capital toward “bundled” data-centre + power solutions and grid-heavy enablement (HVDC, tariffs/returns, onsite dispatchable frameworks). Deal activity is also shifting upstream into generation and integrated energy platforms, as power availability and interconnection timelines remain the binding constraint.

Spending signals remain strong: US and Canada lead record data center spending in 2025 cites S&P Global forecasting $61bn of global data-centre construction spend in 2025, with energy constraints (lack of cheap power) as the main obstacle and renewed interest in nuclear.

Risks and watchpoints

Power availability, cost allocation, and regulatory “who pays”

• Downside risk: accelerated approvals and bespoke tariffs can shift costs and create political/regulatory backlash. Louisiana’s new fast-track framework explicitly suspends elements of competitive bidding and consumer protections: Louisiana adopts fast-track power approvals for data centers.
• Execution bottleneck: build timing mismatch—data centres can be delivered in 9–12 months vs generation in ~2.5–3 years, amplifying stranded-capacity and cost-recovery risk: Who should pay for electricity for new data centers.

ERCOT / large-load compliance and onsite power requirements

• Near-term risk: Texas SB 6 (effective 2025) increases compliance complexity for >75MW loads and reinforces “bring-your-own-power” expectations as ERCOT peak demand is projected to rise >65% by 2031: Texas SB 6 reshapes power strategy for large data centers.

Policy uncertainty for clean energy (US)

• Downside risk: shifting subsidies/permitting outcomes can alter PPA pricing and COD timelines for solar/storage that many data-centre projects underwrite to: US clean energy faces policy whiplash and mixed outcomes.

Supply chain / trade measures (networking materials)

• Cost/lead-time risk: UK imposes definitive duties on Chinese optical fibre cables—potentially impacting network build costs for UK data-centre connectivity programs: UK imposes definitive anti-dumping duty on Chinese fibre and UK imposes anti-subsidy duties on Chinese fibre cables.

Technology & architecture transition risk (AI infrastructure)

• Execution risk: legacy “one-model-per-node” cluster designs may underperform agentic/multi-model workflows, implying redesign capex and refresh cycles: Agentic AI infrastructure requires bundled models per node.

Key deals and hyperscale/AI campus projects

Alphabet: vertical integration into power + data-centre enablement

• Alphabet agreed to acquire Intersect, positioning it to accelerate both data-centre capacity and power buildout: Alphabet to acquire Intersect for U.S. energy innovation.
• Separate coverage specifies valuation and strategic intent: Alphabet Acquires Intersect Power for $4.75B to Power AI ($4.75bn plus assumed debt) to secure renewables (solar/wind/battery) for AI data centres and support 24/7 carbon-free energy goals; builds on Alphabet’s prior minority stake.

US: multi-building hyperscale campus in Wisconsin

• Vantage breaks ground on Lighthouse data center campus:
  • Location: Port Washington, Wisconsin.
  • Scale:4 data centers, targeting 902MW of IT capacity.
  • Investment:$15bn total; Phase 1: $8bn, expected by 2028.
  • Delivery partners: Whiting-Turner, The Weitz, Michels, and a Turner–McCarthy JV.
  • Demand linkage: described as part of Oracle/OpenAI’s Stargate initiative (consortium targeting 10GW over four years, with US and international sites).

US: local permitting momentum (Louisiana)

• Shreveport council approves 2.8 million-square-foot data center permit: Shreveport city council approved a permit for a 2.8m sq ft data centre at Resilient Technology Park.

Vietnam: AI R&D + data infrastructure site

• FPT breaks ground on AI Research Center in Gia Lai: VND 613bn (~$23.27m) project on 11.13 hectares including AI research, UAV testing, and a data infrastructure center; expected operations 2027.

India: Adani AI data-centre + energy buildout (early signal)

• Adani plans major AI data centre and energy expansion: Adani Group to expand AI data-centre infrastructure and scale energy supply, committing up to $5bn to build facilities for global tech firms (including Google), leveraging renewables and evaluating nuclear.

Power, grid and interconnection highlights

Spain: improved regulated returns + 2026 tariff reset

• CNMC sets 6.58% return rate for Spanish power networks: CNMC sets electricity-network return at 6.58% for 2026–2031 (+100bp), aiming to provide regulatory certainty; methodologies align investments with government limits of up to 0.13% of GDP.
• CNMC sets 2026 electricity transmission and distribution tariffs: 2026 access tariffs imply ~0.5% average increase vs 2025; transmission remuneration +12.1%, distribution +2.5%, partially offset by expected demand growth and phased allocation of past settlement deviations.

India: major HVDC corridor award (renewables integration)

• GE Vernova to supply HVDC for Adani Khavda corridor: GE Vernova awarded contract by Adani Energy Solutions to supply a 2.5GW, ±500kV VSC-HVDC system for Khavda–South Olpad corridor; completion targeted 2030. Letter of award expected to be booked as an order in 1H 2026.

South Africa: improved reliability outlook

• Eskom reports stable power system and improved performance: Energy Availability Factor >66%; >217 days without load shedding; plans 4,670MW online for evening peaks; projects no load shedding through March 2026 (Summer Outlook).

US: grid expansion strategies and cost containment

• US strategies to expand the grid while lowering costs: RMI highlights that planned $1.4tn US grid investment by 2030 must be delivered without sharply rising electricity costs; proposes strategies to deploy new clean technologies, accelerate project delivery, and maximize existing grid capacity.

Grid-edge visibility (relevance to AI-data-centre power electronics)

• ORNL and UT develop real-time Universal GridEdge Analyzer: real-time waveform measurement/streaming device in use by utilities in Hawaii and Texas to study power electronics behavior, including stability and backup-power events at AI data centres.

Policy and regulation

Texas (ERCOT): SB 6 large-load framework

• Texas SB 6 reshapes power strategy for large data centers underscores a tightening posture for >75MW loads and increasing emphasis on onsite dispatchable and renewable power models.

Louisiana (US): fast-track power plant approvals + cost sharing

• Louisiana adopts fast-track power approvals for data centers: new “lightning speed” pathway potentially shortens regulatory timelines to as little as eight months; large customers would pay half the cost of new plants, with the remainder potentially borne by regular utility customers.

Taiwan: mandatory energy-efficiency manuals + PUE thresholds

• Taiwan mandates energy efficiency manuals for large data centers: applies to information service providers including hyperscale/colo with ≥5MW contracted power; requires Energy Utilization Manuals and Best Available Techniques at planning stage. Sets PUE thresholds: 1.3 hyperscale, 1.4 colocation.

UK: trade remedies on optical fibre cables

• Definitive duties implemented/updated on optical fibre cables from China: UK imposes definitive anti-dumping duty on Chinese fibre and UK imposes anti-subsidy duties on Chinese fibre cables.

AI governance pressure (investor/issuer focus)

• Trends in AI-focused shareholder proposals at U.S. companies: sustained AI-related shareholder proposals (2022–mid-2025) focused on responsible AI governance, ESG risks, and data-centre impacts; notes investors representing >$8.5tn AUM backing ethical AI principles.

Technology & operating model shifts (capex and efficiency implications)

• Cooling / high-density readiness:MHI and EXEO deploy Japan’s first two-phase DLC GPUs reports commercial deployment of two-phase direct-to-chip liquid cooling GPU servers in Japan, targeting better cooling efficiency and reduced fan power/PUE.
• AI cluster architecture:Agentic AI infrastructure requires bundled models per node argues for infrastructure designed around multi-model “bundles” per node to support agentic workflows.

What to watch (next 1–4 weeks)

• Whether Alphabet Acquires Intersect Power for $4.75B to Power AI triggers additional hyperscaler moves into owned generation/storage platforms.
• Milestones on Vantage’s Lighthouse data center campus (contracting, power sourcing, and any interconnection/power-plant announcements supporting 902MW IT load).
• State utility commissions’ evolving “cost causation” approaches (Louisiana fast-track vs bespoke tariffs and guarantees noted in Who should pay for electricity for new data centers).
• ERCOT compliance and onsite dispatchable procurement strategies as SB 6 implementation progresses: Texas SB 6 reshapes power strategy for large data centers.
• Spain’s network investment implications under the new 6.58% allowed return and 2026 tariff parameters: CNMC sets 6.58% return rate for Spanish power networks.
• Taiwan’s enforcement trajectory for new PUE thresholds and planning-stage requirements: Taiwan mandates energy efficiency manuals for large data centers.
• UK fibre duties pass-through into pricing/lead times for network builds: UK imposes anti-subsidy duties on Chinese fibre cables.