Data centres consume about 5% of America's electricity, up from 2% a decade ago. The International Energy Agency projects the share will reach nearly 10% by 2030. Average American power bills have risen around 40% since 2019, well above inflation, though this is driven more by natural gas prices, costly grid modernisation and nuclear cost overruns than by data centres themselves.
Ashburn, a town of 45,000 in Virginia, has earned the nickname "Data Centre Alley" for its roughly 150 facilities, which consume about as much electricity as Philadelphia, a city of 1.6m. Goldman Sachs reckons data centres will account for nearly half of overall electricity-demand growth in America in the coming years, yet even bullish forecasts put their share of total demand at only a fifth by 2030—less than a tenth today.
A study by the Lawrence Berkeley National Laboratory showed that data-centre load was not the main cause of rate rises in the five years to 2024; grid upgrades and the rising cost of power-generating equipment and raw materials such as copper were the bigger culprits. Wood Mackenzie estimates that in 2025 demand for distribution transformers outstripped supply by 10%; for power transformers the gap was 30%, with waiting lists stretching to 120 weeks or more, up from 50 in 2021. An Economist analysis found no association between the increase in bills from 2019 to 2024 and data-centre additions at the state level; Virginia, the state with the most new data centres, saw bills rise by less than projected. A larger load lets a grid spread its fixed costs across more bill-payers.
PJM Interconnection, the largest grid operator in America, has seen prices at auctions for future generation capacity soar as data-centre growth has pulled up projected demand. PJM reckons the latest auction will lift household bills by up to 5%.
Half of Americans say they do not want data centres built near them. Counties around Atlanta have paused new data-centre approvals. Standard complaints include building noise, disruption to nature and fears of electromagnetic interference. Worries about water use have gone viral, even though data centres are no thirstier than other industrial projects.
Big tech firms are investing in their own power supply. Alphabet paid $5bn in December 2025 for Intersect Power, a developer of utility-scale solar and battery storage. Microsoft signed a long-term deal to restart a nuclear reactor at Three Mile Island to supply its data centres; Meta has backed a handful of nuclear startups. Google has agreed to novel tariff arrangements with Indiana Michigan Power, a midwestern utility, whereby its data centres reduce consumption when other demand is high. Microsoft uses backup batteries in one of its Irish data centres as a "grid stabiliser" that pushes power back into the network at times of stress.
In principle, data centres could lower power prices by spreading fixed grid costs over a larger load, especially if operators curtail demand when the grid is under strain. The nightmare scenario is that data-centre demand forces grids into costly expansions but then melts away—if data centres decamp to another state, AI breakthroughs disappoint or better algorithms need less computing power—leaving households to bear the cost. Georgia's Public Service Commission pushed through a rule change in January 2025 requiring longer-term guarantees from large users.
India's installed data-centre capacity reached 1.3 gigawatts in 2025, according to JLL, a property firm—small compared with America (38.7GW) or China (9.5GW), but nearly triple the figure from 2020. In 2024 India produced by some estimates around a fifth of the world's digital information but had only 3% of its data-centre capacity.
Three forces are fuelling the boom. First, a government push to localise data: since 2018 the Reserve Bank of India has mandated that financial institutions retain clients' data within the country, and a law set to come into force in 2027 may require that certain personal data remain there too. Second, incentives: the 2026 budget announced a tax holiday until 2047 for foreign owners of data centres in India. Maharashtra, home to over half of India's existing capacity, allows data centres to pay 40% lower electricity prices than other commercial users. Third, cost: electricity costs about a fifth lower than in America in dollar terms, and land and construction are cheaper too.
The Adani Group announced in February 2026 that it would pour $100bn into data centres by 2035. NTT DATA, a Japanese IT giant, is currently the largest owner of data centres in India. Alphabet is spending $15bn on a data-centre cluster for AI in southern India; Microsoft has said it will invest some $20bn in AI infrastructure in the country.
Growing difficulty in siting terrestrial data centres—permitting delays, grid-connection queues and public opposition—has prompted interest in putting computing capacity into orbit, where solar energy is abundant and undiminished by the atmosphere. Of global data-centre capacity due to come on stream in 2026, 30-50% could be delayed, according to Sightline Climate, up from 26% in 2025.
SpaceX merged with xAI in February 2026 partly to pursue this aim, and applied for a licence to build a constellation of up to 1m satellite-based data centres. Starcloud, founded in 2024, launched a fridge-sized test satellite containing an Nvidia H100 GPU in November 2025 and successfully trained a small AI model in orbit.
The economic case depends on three variables: launch cost per kilogram, specific power (watts of processing per kilogram of satellite) and satellite cost per watt. At current launch prices (~$1,500/kg via Falcon Heavy) orbital data centres are far more expensive. But at a launch cost of $200/kg—plausible if SpaceX's Starship becomes fully reusable—and with satellite designs optimised for AI, the orbital option becomes cheaper than a terrestrial 1GW data centre over five years. AI satellites do not need the costly phased-array antennas of communications satellites; they communicate only with neighbours via laser links.
Plant Vogtle in Georgia is the site of America's first from-scratch nuclear reactors in decades. The plant is named after Alvin Vogtle, an electricity executive and possible inspiration for Steve McQueen's character in "The Great Escape". Cost overruns at Plant Vogtle have been a major driver of bill rises in Georgia. The new reactors will be the world's most expensive until Britain's Hinkley Point C wraps up in the 2030s.
Elephant, n.: A mouse built to government specifications.