Sarah: Equinix raises guidance on AI demand — and in the same news cycle, Microsoft's own SEC filing admits the power might not show up in time.
Sarah: Put those together, and the story gets complicated fast.
Sarah: Here’s how we got here.
Sarah: The backlash has hardened from general worry into formal constraints — bans
Sarah: moratoria water fights
Sarah: project withdrawals zoning challenges.
Sarah: In Virginia, a groundwater study called for tighter water rules.
Sarah: IVCM sued IID over 260 million gallons of Colorado River water
Sarah: and Plymouth Township lined up against a proposed two-million-square-foot Conshohocken build.
Matt: This is The Data Center Daily.
Matt: Today — a hyperscaler puts the grid in a legal filing
Matt: Trump hands 23 governors a pledge with no teeth
Matt: and Ohio's public actually wins one on water.
Sarah: We start with the Equinix numbers — the clean part — before it gets complicated.
Matt: This story isn't over: Local data center bans and ballot backlash.
Matt: Follow us wherever you're listening, and the next chapter comes to you.
Sarah: PR Newswire writes:
Quote: "We delivered an exceptionally strong Q2.
Quote: Monthly recurring revenue grew double digits for the third straight quarter
Quote: new interconnections on our platform hit a record level
Quote: and disciplined execution drove robust profit growth," said Adaire Fox-Martin
Quote: CEO and President Equinix.
Quote: "Our revised 2026 guidance and long-term financial outlook reflect momentum across the business.
Sarah: Equinix Q2: $2.625 billion in revenue
Sarah: up 16 percent; net income up 30 percent; and full-year guidance raised to between $10.21 billion and $10.29 billion.
Sarah: The tell is buried in the interconnection line — a record 9,700 net adds in one quarter.
Matt: Nine thousand seven hundred cross-connects.
Matt: Those are cables getting physically punched down in a hall, not just a press release number.
Matt: Demand isn't the problem here.
Sarah: Bookings rose 23 percent year over year — second-highest on record — and they're feeding a record backlog.
Sarah: Backlog's the word I'd circle.
Matt: Right — backlog means they booked it but can't turn it on yet.
Matt: Fox-Martin says they're 'uniquely positioned to serve AI needs.'
Matt: Sure — positioned to book it.
Matt: Whether the power shows up to energize it is a whole other filing, and we get to that one in a minute.
Sarah: Which makes today's timing almost too neat.
Sarah: The seller's order book has never looked better, and the constraint's moving upstream to the wire.
Sarah: Buried in Microsoft's latest 10-K is a passage that should stop every infrastructure lead in this space cold.
Sarah: The company now spells out access to electricity as a detailed constraint on datacenter expansion.
Sarah: Here's how they put it:
Quote: The availability, reliability, and cost of electrical power are critical to the operation and expansion of our datacenters.
Quote: In many regions electricity generation
Quote: transmission and distribution infrastructure is experiencing increasing demand and capacity constraints.
Quote: Limitations in power availability
Quote: delays in obtaining power connections
Quote: outages shortages increased energy costs
Quote: or requirements imposed by utilities
Quote: regulators or other market participants could restrict our ability to develop or expand datacenter capacity.
Quote: In addition alternative energy sources and other emerging solutions may not be available in sufficient quantities
Quote: may not timely scale to meet our requirements
Quote: or may be available only at higher costs.
Quote: If we are unable to secure adequate power resources on commercially reasonable terms
Quote: our ability to support customer demand and execute our growth strategy could be adversely affected.
Matt: Look at how specific that is.
Matt: This goes well beyond boilerplate force-majeure hedging.
Matt: Microsoft is telling investors that grid interconnection timelines — and the scalability ceiling on alternative power — are live variables
Matt: in its capacity build-out.
Matt: It's a materially different risk posture from prior filings.
Sarah: So watch Microsoft's site-selection pipeline and PPA activity against this disclosure.
Sarah: When a hyperscaler this big names grid access and connection timing as growth constraints in a 10-K
Sarah: behind-the-meter generation
Sarah: transmission queue reform
Sarah: and utility co-investment deals move from strategic options to operational necessities.
Sarah: Here's Josh Boak and Matthew Daly at The Associated Press:
Quote: President Donald Trump on Thursday had governors and electricity companies join a voluntary pledge to shield U.S.
Quote: consumers from higher utility bills from data centers — a sign of how the artificial intelligence build-out has become a lightning rod of
Quote: controversy before the midterm elections.
Matt: So the plan for keeping that bill off ratepayers is a voluntary pledge.
Matt: Twenty-three governors, 187 companies, and not one enforcement mechanism in the whole thing.
Matt: Nonbinding. He said it himself.
Sarah: And here's a sales pitch for the ages.
Sarah: Trump told executives — and I'm reading this straight — 'You can't fight it.
Sarah: You have to go with it.'
Sarah: Apparently the affordability policy is convincing your community they'll be rich.
Matt: He also promised prices would drop because there'd be a surplus of power.
Matt: Sarah, we just aired the Microsoft filing — their own lawyers wrote that generation and transmission are the bottleneck.
Matt: Where's the surplus coming from?
Sarah: Right — and this is the second version of the same pledge.
Sarah: He rolled out the first one with the tech companies back in March, per the AP, and it didn't move voters an inch.
Sarah: This is the March pledge with governors' signatures stapled on before the midterms.
Matt: The one thing I'll credit — the demand side and the policy side both went on the record this week.
Matt: Microsoft did it in a legal filing, this in a Rose Garden pledge.
Matt: Now we get to see which one actually moves a rate, and 'voluntary' tells you it won't be this one.
Sarah: A press release with a governor's signature doesn't show up on anyone's utility bill.
Sarah: And there's the gap between what got announced today and what a ratepayer actually pays in January.
Sarah: SendTech Times writes:
Quote: Data Center Knowledge reviewed Georgia Public Service Commission filings that recorded a 3,200MW customer commitment and an anonymized
Quote: 3,210MW project before OpenAI unveiled the $20 billion Project Camellia campus.
Quote: The PSC record establishes the load sequence before the public launch, but it does not identify the confidential customer.
Sarah: Here's the sequence now in the PSC record.
Sarah: Georgia Power logged 3,200 megawatts of new customer commitment in April
Sarah: along with an anonymized 3,210-megawatt project in technical review.
Sarah: The filing lists Q2 2028 for service, ramping to 3.2 gigs by 2031.
Sarah: OpenAI put the name Camellia on it three months later.
Sarah: So the load was moving through Georgia planning before a single community heard the words twenty billion dollars.
Matt: And credit where it's due — this time we actually have a megawatt number.
Matt: Two, in fact, and they match within ten megs.
Matt: We've got a docket to work from.
Matt: But the customer's still redacted.
Matt: The commission knows exactly who's parking 3.2 gigawatts on the queue — the ratepayers funding the transmission to serve it don't get a
Matt: name. Confidential to the public, crystal clear to the regulator.
Sarah: Data Center Knowledge pulled the filings apart and lined up the timeline.
Sarah: The gap between a Q1 large-load attachment and a press release turns out to be a whole planning cycle.
Sarah: Here's CRBC News:
Quote: The Ohio EPA dropped a proposal to allow data centers to use a general wastewater discharge permit after roughly 7,000 public comments
Quote: opposed the change.
Quote: Critics said a blanket permit would have bypassed necessary site-by-site environmental reviews and risked impacts to waterways linked to
Quote: Lake Erie.
Quote: Regulators’ reversal keeps individual permitting in place and highlights rising local concerns over the water and energy demands of
Quote: expanding data center campuses.
Matt: And in Ohio, the state just dropped its statewide wastewater shortcut after about 7,000 people filed formal objections.
Matt: The public showed up and the general permit died.
Sarah: And here's why the mechanics matter.
Sarah: The proposal would've let data centers operate under one blanket statewide discharge permit.
Sarah: The reversal keeps individual, site-by-site review in place.
Sarah: The link to Lake Erie is why people cared.
Matt: And that's why it matters.
Matt: With a general permit, nobody looks at what your specific campus dumps into a stream that runs to Lake Erie.
Matt: Site-by-site means someone actually reads the discharge numbers before you break ground.
Sarah: It's a clean counterweight to this week's grid story.
Sarah: The power fight gets the headlines, but water permitting is becoming its own chokepoint, one comment period at a time.
Matt: Put Ohio next to that Imperial Irrigation lawsuit in California, and it's the same fight playing out on both coasts.
Matt: The 'we won't touch the water' promise keeps running into the permit process.
Matt: Water's the next grid.
Host: If you follow data centers, check out AI Daily Briefing.
Host: It covers the top AI news for engineers, founders, and investors every weekday, separating real capabilities from demo hype — fast.
Host: It's a smart companion to this show, wherever you listen to podcasts.
Host: What we're watching next: Project Camellia's utility-planning timeline points to service starting in the second quarter of 2028
Host: then ramping to roughly 3.2 gigawatts by 2031.
Host: You'll find links to every story in today's show notes if you want to dig into any of them.
Host: That's The Data Center Daily for today.
Host: This is a Lantern Podcast.