This week, OpenAI and other tech companies joined US president Donald Trump at the White House to pledge a private investment of half a trillion dollars in US data centres over the next four years. The “Stargate Project” could power an ambitious expansion of AI technology – with repercussions for the US electricity grid and the country’s energy future.
The Stargate announcement comes as North America has been experiencing surging electricity demand in recent years. The grid is already straining to keep up and faces a growing risk of power outages. Data centres are the fastest-growing factor in US electricity demand, with each one capable of using as much energy as tens of thousands of US households. Adding even more load on the grid could put large regions of the US and Canada at risk of electricity shortages.
“The difficulty is not getting the capital to build the data centres and buy the [computer chips] – it is finding enough power for them,” says at the University of Pennsylvania. “There would need to be a corresponding investment in energy generation, energy storage and transmission infrastructure to support these data centres.”
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The full scope of Stargate’s potential impact on the US grid is unclear because the announcement lacked details on the size and power requirements for the planned data centres. At the White House announcement, Oracle CEO Larry Ellison said Stargate has already begun construction on 10 data centre buildings that each cover more than 45,000 square metres at the project’s first site in Texas. He also mentioned plans to build data centres in 20 other locations across the US.
Each one could cost as much as $10 billion if it contains at least 100,000 NVIDIA GPUs – some of the most popular and coveted chips used for training AI models, says Lee. If OpenAI and its Stargate partners – Japan’s Softbank Group, the US tech company Oracle and the Emirati investment firm MGX – eventually commit the full $500 billion for the project, that could mean 50 data centres being built over the next several years. None of the firms backing Stargate responded to requests for comment.
There is some fuzziness in the financial commitments made already, too. We don’t know how much of Stargate’s initial $100 billion pledge represents already-planned investments by OpenAI and its partners.
But we do know the power use for the project could be astronomical. Each $10 billion data centre, packed with the latest chips, may require 100 megawatts, says Lee. That could power tens of thousands of US households.
Trump said he would help Stargate meet its energy needs by using “emergency declarations” to assist in setting up electricity generation, possibly including power sources located right alongside data centres. But it is unclear how that would work in practice – and Stargate backers haven’t said how much they are spending on new power generation sources. “If [Stargate] instead diverts electricity from the regular grid, it’ll be regular people who suffer through price hikes and blackouts,” says at Yale University.
Connecting data centres also requires costly upgrades to local electricity grid infrastructure, says at the Natural Resources Defense Council, an environmental advocacy group based in New York. An Ohio subsidiary of utility company American Electric Power has now proposed a that data centre developers would need to pay up front to cover the costs of such grid upgrades, so that residential customers will not be on the hook.
Without such measures, “we could see massive costs being incurred by other utility customers at a time when affordability has never been more important”, says Morris.
Data centres also consume huge amounts of water and contribute to harmful air pollution. Any environmental or public health cost from Stargate would depend on the sites chosen for data centre development.
The type of power the Stargate data centres will consume is also unknown. Some tech companies have invested in developing renewable energy sources, reviving conventional nuclear power plants and placing bets on advanced nuclear reactors. “That capital is a huge opportunity to make a once-in-a-lifetime-scale investment in a more efficient, cleaner grid,” says Morris. “If we do it wrong, we’re going to see the build-out of a ton of new fossil fuel infrastructure.”
The trouble is the timeline. Utility companies scrambling to meet increased demand from data centres may not wait for sustainable energy sources to come online, and Trump has made executive orders aimed at boosting fossil fuel production.
“The optimistic take is that data centres are initially fuelled by a temporary increase in natural gas and fossil fuels, and then more sustainable energy options like nuclear take over,” says Hine. “Still, given the new administration’s loosened environmental regulations and penchant for fossil fuels, it’s possible that the transition to renewables will get skipped, even though it would help ensure consistent and clean energy for data centres.”
