January 16, 2026
Top news (3)
Illinois tightens the link between data centres and the grid. The new law sets up >1 GW of storage procurement in Aug-2026 (plus 3 GW more later), restarts nuclear development pathways, and tightens emissions permitting for data centre backup generators: Illinois Clean and Reliable Grid Affordability Act.
Microsoft sets a “community-first” playbook for US AI data centre growth. Microsoft says it will apply the framework to new and expanding US AI data centre markets in H1 2026, including commitments on property taxes, funding grid upgrades, and community investment; it also discloses 7.9 GW of new generation contracted in MISO and a 40% water-use intensity reduction target by 2030: Microsoft Community‑First framework.
Compute demand is now being described in utility-scale power terms. OpenAI signed a multibillion-dollar agreement to buy up to 750 MW of inference capacity from Cerebras over three years for parts of ChatGPT inference: OpenAI–Cerebras inference capacity deal.
Key deals & projects
North America (US)
Behind-the-meter “power plant to AI DC” conversion (California): NewYork GreenCloud plans to convert the idled Buena Vista Biomass Power plant from 18 MW to 41 MW into a “carbon-negative, behind-the-meter AI data center,” citing ~$156m capex and a related $6bn partnership with Atlas Cloud AI including an initial $250m deployment to host 288 HGX B300 systems by Feb 2026: Idled California biomass plant rebuilt as carbon-negative AI factory.
Edge AI pods at internet exchanges (US roll-out): Moonshot Energy, QumulusAI and IXP.us plan deployments at 25 US sites starting with Wichita State University by July 2026, with an ambition to scale to 125 sites across campuses/municipalities. Moonshot’s modules are 2,000 kW units; IXP.us provides carrier-neutral interconnection: deploy QAI Moon Pods.
Corporate structure move (operator/developer): T5 Data Centers will split into T5 Services (construction/ops) and T5 Properties (assets/development). Leadership is assigned and alignment is planned through Q1 2026: T5 aligns Services and Properties.
Europe (UK / EU)
UK environmental permitting: The Environment Agency issued permit EPR/TP3120LE/A001 for Iron Mountain’s LON3 Data Centre in Slough, with permit/decision documents published 15 Jan 2026: permit for Iron Mountain LON3.
Trade framework (EU / Mercosur): The EU Council authorised signature of the EU–Mercosur Partnership Agreement (formal signature planned 17 Jan 2026). It still requires European Parliament consent and ratification by all EU member states and Mercosur parties, with potential use of an Interim Trade Agreement after Parliament consent: EU–Mercosur Partnership Agreement.
Asia (India / SE Asia)
Sovereign AI park (India): Tamil Nadu signed an MoU with Sarvam AI for a Sovereign AI Park with Rs 10,000 crore initial investment, including compute/GPU infrastructure and a large data centre near IIT Madras, plus an institute focused on AI in governance: Tamil Nadu–Sarvam AI Sovereign AI Park.
AI DC deployment pipeline (SE Asia): Gorilla Technology cites a pipeline exceeding $7bn and a $1.4bn multi-year partnership to deploy AI-ready data centers across Southeast Asia, alongside reaffirmed 2025 guidance of $100–$110m and 2026 revenue expectations of $137–$200m: Gorilla Technology AI data centre deals.
Power & grid / interconnection highlights
US grid build and constraints
- Interconnection delays are being framed as the core bottleneck for AI-era growth. Google flags transmission grid connection delays of 4–10 years (with one utility citing 12 years to study an interconnection). The piece also cites Berkeley Lab estimates of data centre demand rising from 176 TWh (2023) to 325–580 TWh (2028), and Goldman Sachs’ estimate of ~$720bn grid spending needed through 2030: Grid constraints threaten AI-era data center growth.
Utility-scale storage supporting “Data Center Alley” load
- Contracted BESS in PJM (Virginia): Elevate Renewables acquired the 150 MW / 600 MWh Prospect Power project in Rockingham County, Virginia (under construction; COD mid-2026). It is fully contracted under a 15-year PPA with Dominion Energy Virginia, positioned as reliability support for PJM amid rising data centre demand: Elevate Renewables buys Prospect Power battery.
Turbines, on-site generation and supply chain
- Turbine backlogs into 2030: EPRI researchers describe bottlenecks (rotor forgings, hot-section blades) pushing utilities toward life extensions, uprates, repowering, and modular solutions. Data centres are driving near-term demand for 30–100 MW turbines; orders for sub‑20 MW units hit record highs in 2025: Turbine supply chain backlogs reshape generation mix.
Policy & regulation
United States
EPA turbine permitting change (data-centre-adjacent impact): EPA updated performance standards for combustion and stationary gas turbines, requiring air and construction permits even for temporary units (posted to the Federal Register 15 Jan 2026). The change could affect xAI’s power options for its Memphis and Southaven campuses: EPA updates turbine rules affecting xAI data center power.
Kentucky: policy fight over who bears AI DC costs: Kentucky lawmakers/regulators are debating approaches including statewide tariffs (example cited: 15-year contracts at 80%+ projected usage) and a Nuclear Reactor Site Readiness Pilot Program; local opposition has stalled several projects: Kentucky lawmakers focus on AI data centers.
Federal direction on environmental permitting/budgets: A report says the Trump administration is rolling back protections and fast-tracking permits for AI infrastructure/data centers, and proposes FY2026 budget cuts including $2.46bn from EPA Clean/Drinking Water SRFs and $721m from USDA Rural Development funding: rolls back U.S. environmental protections and permits.
EPA regulatory analysis methodology: EPA said it will stop monetizing health benefits (ozone and PM2.5) in regulatory analysis while still counting industry costs; advocates warn this could weaken emissions rules relevant to turbines and other power sources for large data centers: EPA to stop monetizing health benefits.
Africa
- Operational risk: national connectivity interruption: Human Rights Watch says Uganda ordered a nationwide suspension of public internet starting 13 Jan 2026, 6 p.m., blocking social media/web browsing/messaging apps and halting SIM sales and outbound roaming; network measurement firms reported a confirmed traffic drop: Uganda Internet Shutdown Violates Rights.
Capital markets & corporate financing signals
Australia BESS platform funding optionality: BlackRock-backed Akaysha Energy is exploring raising “several hundred million dollars,” including a minority stake sale, after reports valuing it at >US$1bn; it operates the 850 MW Waratah Super Battery and had an AU$300m corporate debt facility (Sep-2025): Akaysha Energy mulls minority stake sale.
Quantum compute as “datacenter-ready” hardware: Equal1 raised €51m ($60m) led by ISIF (with Atlantic Bridge, EIC Fund and others) to deploy its Bell·1 quantum server into HPC centres and scale manufacturing: Equal1 raises €51M.
Connectivity & network infrastructure
New $1bn intra-Asia subsea cable venture: NTT DATA, Sumitomo Corporation and JA Mitsui Leasing formed Intra-Asia Marine Networks to build the ~8,100 km Intra-Asia Marine Cable linking Japan, Malaysia and Singapore. Estimated cost is ~$1bn, initial capacity ~320 Tbps, with technology references including WSS and space-division multiplexing (up to 16 fibre pairs / 32 cores): Intra‑Asia submarine cable venture.
US Midwest interconnection/edge positioning: 1623 Farnam completed a mid‑2025 expansion adding 1.5 MW IT capacity and 280 cabinets; it cites 60+ carriers, Omaha IX adoption (including Iowa Communications Network), and Azure ExpressRoute partner positioning: 1623 Farnam 2025 Review.
2-line wrap
Policy is moving closer to the physical constraints: generator permitting, storage procurement, and interconnection delays are now front-and-center in multiple US states.
At the same time, AI infrastructure demand is being expressed in GW-scale commitments, pushing operators toward modular edge builds and more diverse compute and power supply options.