Off-Grid AI Data Centers Face Local Backlash, Reliability Risks

According to Axios, local backlash and reliability concerns are challenging the push by AI companies to build large off-grid data centers quickly, a model that could put trillions of dollars in AI investment at risk if major projects stumble. Research firm Cleanview said 59 data centers with about 90 gigawatts of combined capacity plan to build behind-the-meter power using gas turbines, generators and fuel cells, while infrastructure risk analysis firm Occam Edge tracks 12 projects where onsite power is the primary supply, representing about 10.6 GW of announced capacity. Recent setbacks have underscored the risks. New Mexico's top land official rejected a gas pipeline tied to Oracle's 2.5 GW Project Jupiter campus, part of Oracle and OpenAI's Stargate initiative, which could delay the project by years. In Virginia, a smaller off-grid data center's onsite gas turbines were offline for 24 hours, forcing it onto diesel backup during poor air quality from Canadian wildfires; residents complained about noise and health effects, and a local supervisor called for new generator rules. Axios said OpenAI, Oracle and Crusoe are among the chief developers of the off-grid approach, while S&P Global Ratings recently cut Oracle's long-term issuer credit rating to BBB- from BBB over heavy data center spending that includes onsite power infrastructure.