Today’s headline: OpenAI’s fifty-billion-dollar compute bill runs into grid pushback. Welcome to The Data Center Daily. Here's BERNAMA:
The previously undisclosed spending estimate highlights the scale of investment required to build and operate AI systems, even as the technology remains at an early stage. OpenAI has also outlined plans to invest more than US$1 trillion in AI infrastructure over the coming years.
OpenAI’s spending about fifty billion dollars on compute this year — and that number didn’t come from an investor deck. Greg Brockman said it under oath in the Musk suit. That’s what gets me. Every other big AI number this week came dressed up in a press release. This one’s sworn testimony in a San Jose courtroom. Fifty billion in 2026, and they’ve floated north of a trillion in infrastructure over the coming years. Brockman’s the same exec, so it’s the same mouth on both figures — one in court, one in the keynote. And what I want carved out of that fifty is how much is tied to megawatts already sitting in a PJM or ERCOT interconnection queue. Because if that capacity isn’t energized, fifty billion is a check written against a grid that can’t cash it yet. There’s the whole week in one figure. The capital’s sworn. The megawatts are queued. From John Ainger at Bloomberg:
Soaring US power bills are threatening to claim their biggest victim yet — the nation’s largest electric grid operator. Federal officials have suggested breaking up PJM Interconnection LLC, which runs the grid from the Illinois prairie to the Jersey Shore.
Bloomberg’s Ainger and Dlouhy reported yesterday that federal officials are floating a breakup of PJM Interconnection — the operator running the grid from the Illinois prairie to the Jersey Shore, across 13 states. Put that next to the Monitor’s twenty-three-billion-dollar capacity number from last week, and it hits differently. The watchdog said the queue assumptions were broken. Now we’re asking whether the governance structure can survive the load at all. And here’s what that does to every clean-energy PPA signed into PJM territory — your counterparty is the grid operator. If PJM gets carved up, who’s on the other side of that contract in five years? Last edition we were talking PJM price pressure as a backlash story. Now it’s federal talk of dismembering the thing. The cost-allocation fight just went national — if PJM fragments, who eats the transmission investment sized for a grid that doesn’t exist anymore? And the pressure point is one stretch of Northern Virginia. Ashburn. Data Center Alley is straining a 13-state operator badly enough that Washington’s reaching for a structural fix. One county. The biggest grid operator in the country, and the thing that might break it is a cluster of buildings off the Dulles toll road. From Sean Wolfe at Power-Engineering:
The Federal Energy Regulatory Commission (FERC) has issued a waiver allowing Constellation Energy to transfer capacity interconnection rights from one of its gas plants to its Three Mile Island nuclear plant, effectively reducing the timeline for restart from 2031 to 2027.
Here’s the mechanism, because it matters: FERC let Constellation transfer capacity interconnection rights from its Eddystone gas plant to the 835-megawatt Three Mile Island restart. That moves the in-service date up from 2031 to 2027. And it’s the only thing in the whole rundown this week that actually shortens a timeline. Not a groundbreaking, not a summit photo — a paper instrument that makes the Microsoft PPA financeable years earlier. Wait — so the fix is they couldn’t build the transmission, so they just borrowed the grid rights from a gas plant down the road? That tells you everything about where PJM’s queue actually is. Constellation basically said the contingent lines PJM wants — hundreds of miles of them — are so delayed they’re not real. So FERC said fine, take Eddystone’s spot. Honest, at least. All week, the ERCOT screen and the PJM Monitor have been process stories. Here, a regulator actually accelerates physical generation — 835 megawatts of it. 835 megawatts in 2027. Northern Virginia’s queued load wants more than that, sooner. So does it hit the PJM dispatch stack before Data Center Alley needs it, or after? That’s the year I want. Here's Hoodline:
ERCOT is bracing for a scorcher of a summer on the Texas grid, warning that record-breaking electricity demand could hit the low-90-gigawatt range as a wave of new data centers and high heat collide.
ERCOT’s flagging the low-90-gigawatt range this summer — that blows past the 85.5-gigawatt record from 2023, per the Houston Chronicle. And the tightest hour isn’t midday, it’s 9 p.m., when solar drops off and the AC’s still running. And on Monday the board approved the feasibility screen for Batch Zero — the PUC still hasn’t signed off. So the screen’s running while the load it was built to filter is already showing up at the door. Vegas told the board it’s still showing adequate capacity, with a low likelihood of emergency conditions. June EEA risk is 0.09 percent. Point-oh-nine percent — sure, on the model. That number leans on roughly 11 gigawatts of new plant additions and these new rules for dialing back big users. Translation: the comfort margin is partly the data centers agreeing to get curtailed. GeekWire writes:
A Texas company has formally signaled plans to build a data center in downtown Seattle, even as the city moves toward a moratorium that could impact the construction of such facilities. Digital Realty of Austin, a real estate investment trust with more than 300 data centers worldwide, wants to demolish the building at 301 Virginia St. and replace it with a six-story structure: a data center on four floors plus a lab, office and retail space, permit filings show.
Digital Realty filed at 301 Virginia Street on May 29th — and the council’s land use committee votes Wednesday to send a one-year ban to the full council. That timing screams developer reading the calendar. The instrument here matters. The resolution would bar the city from filing, processing, or approving new data center applications for a year — and Digital Realty’s paperwork got in before the committee vote. So the fight now is whether May 29th beats the moratorium clock. And catch the spokesperson line — they call it ‘a highly connected, network-dense facility, not an AI data center.’ Six stories, four floors of data center, and they’re ‘still assessing power needs.’ You’re assessing the one number the whole fight is about? A REIT with 300-plus facilities worldwide knows its load profile on day one. ‘Still assessing’ sounds like a filing posture. Engineers already know the shape of the load. This is the Seattle version of the thing we hit on PLN — a government reaches for the brake, and the project’s legal structure may just route around it. The moratorium can’t touch an application that’s already in the queue. That’s the gap between a speech and a document. OpenAI’s Michigan groundbreaking was ‘a model for other communities’ — Seattle’s council is reaching for an actual legal instrument because that model didn’t work for them. The resolution explicitly names public concern over power, water, and rates. Got a data center story we should be watching, or a correction to send our way? Email us anytime at datacenterdaily at lantern podcasts dot com. We’d love to hear from you.
You’ll find links to every story we mentioned today in the show notes, so if something caught your ear, you can dig into the original reporting there.
That’s The Data Center Daily for Friday, June 5th. Thanks for listening, and have a great weekend. This is a Lantern Podcast.