The rapid build-out of U.S. data centres is slowing as permitting hurdles, equipment shortages, and public opposition mount, threatening long-term capacity growth in the sector.
The U.S. data centre build-out is still moving at pace, but the industry is entering a far more constrained phase. The Electric Power Research Institute said in February that data centres could account for as much as 17% of U.S. electricity demand by 2030 and 20% by 2035, underscoring how large the load may become. Yet the same projects are now running into a tighter mix of permitting delays, equipment shortages, labour constraints and organised local resistance, making it harder to predict how much capacity will actually reach the grid on schedule. Utility Dive reported that even projects far enough along to appear in load forecasts are no longer guaranteed to proceed.
That uncertainty is already visible in several high-profile projects. Near Grand Rapids, Michigan, a Microsoft-backed data centre has faced permitting delays, while another Microsoft-linked site in Vineland, New Jersey, was fined for using gas generators without the required permissions. In Minnesota, a proposed Google facility has been stopped temporarily for environmental review. In New Mexico, Oracle has moved to protect itself financially from delays to Project Jupiter after state regulators blocked a gas pipeline meant to support the campus. These cases point to a broader pattern: projects are being slowed or diverted by regulatory, environmental and infrastructure hurdles even after they are publicly announced.
The development pipeline remains large, but it is also thinning at the margins. Wood Mackenzie said in July that 36 GW was added to the pipeline in the first quarter of 2026, but that was down 19% from the final quarter of 2025 as developers concentrated on existing projects in a more difficult regulatory environment. Goldman Sachs said in May that only 50% to 60% of planned data centre capacity is likely to come online as expected over the next two years, reflecting the degree to which cancellations and delays are now part of the planning picture. Separate reporting has also shown a drop in U.S. data centre construction activity for the first time in years, as power procurement and zoning restrictions start to bite.
Utilities and developers are responding by trying to bypass some of the bottlenecks. One route is the so-called “bring your own capacity” model, in which data centre operators co-locate with new generation or finance local power additions. OpenAI’s agreement to take 8 GW from a planned 10 GW power project in Ohio is one example, while Amazon’s proposed 7.7 GW gas-fired plant in West Texas shows how far some companies are prepared to go to secure supply. Others are using software to find spare grid headroom or to make loads more flexible. Portland General Electric said it freed up 80 MW of interconnection space by using GridCARE’s load-modelling tools, and EPRI said more stakeholders are now open to flexible-load arrangements that can speed up interconnection.
Even so, the supply chain remains a major brake. According to equipment marketplace Fluxco, buyers now often wait two to three years for standard power transformers and generator step-up units. GE Vernova is quoting delivery into the early 2030s for gas turbines, with a backlog above 100 GW, while other major manufacturers are also booked out for years. EPRI’s Andrew Maxson said skilled labour shortages have become a binding constraint alongside land, permitting and energy supply. Associated Builders and Contractors estimated in 2024 that the U.S. was already short about 500,000 construction workers, before the AI-driven build-out reached full intensity.
Public opposition is now another material risk. Heatmap News found in May that 71% of Americans would oppose a data centre near their homes, and Tom’s Hardware reported that more than 75 projects worth about $130 billion were blocked or delayed in the first months of 2026. That resistance has surfaced in states once seen as receptive to the sector, including Texas and Utah, where governors have pressed developers to cover more of the cost of power infrastructure and to better address water and air-quality concerns. In practice, the industry is discovering that data centres are no longer judged only as technology assets; they are also being treated as large industrial projects with visible consequences for rates, land use and local quality of life.
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