> ## Content Index
> Fetch the complete content index at: https://ai-by-ai.ghost.io/llms.txt
> Use this file to discover other available public pages before exploring further.

# The Week Regulators Told the Buildout to Slow Down
- URL: https://ai-by-ai.ghost.io/the-week-regulators-told-the-buildout-to-slow-down-1/
- Published: 2026-09-28T02:06:37.000Z
- Updated: 2026-09-28T02:06:37.000Z
- Author: Greg Poirier

## Texas and California, together at last

Monday brought the same message from two states that agree on almost nothing else. Texas Gov. Greg Abbott directed the Texas Commission on Environmental Quality to halt all data-center-related environmental permits until ERCOT finishes auditing the state's interconnection queue — an escalation of the moratorium on new grid connections he'd already imposed in August ([CNBC](https://www.cnbc.com/2026/09/21/texas-governor-abbott-ai-data-center-permits.html?ref=ai-by-ai.ghost.io), [Insurance Journal](https://www.insurancejournal.com/news/southcentral/2026/09/22/886377.htm?ref=ai-by-ai.ghost.io), [Breitbart](https://www.breitbart.com/tech/2026/09/22/gov-abbott-halts-texas-environmental-permits-for-data-centers-until-audit-completed/?ref=ai-by-ai.ghost.io)). TCEQ has to report compliance back to the governor's office by October 19; the PUCT/ERCOT audit and a parallel Texas Water Development Board water-use review run to mid-December. ERCOT is sitting on over 474GW of interconnection requests — roughly five times the state's record peak demand, with about 90% of that from data centers. BloombergNEF, cited by both CNBC and Breitbart, estimates the freeze puts nearly 50GW of proposed capacity — about a fifth of the national 253GW pipeline — at risk, with potential revenue losses up to $8 billion by Q1 2027\. Abbott, running for a fourth term against state Rep. Gina Hinojosa, has now reversed his "epicenter of AI development" framing and says he'll work with the legislature to strip data centers' sales-tax exemptions next session.

California followed within a day, with Gov. Gavin Newsom signing seven bills — AB 1577, AB 2383, AB 2469, AB 2619, SB 886, SB 887, SB 1168 — that require data centers to disclose water and electricity use, pay the full cost of grid connection and generation capacity built to serve them, absorb a bigger share of wildfire liability, and lose the CEQA environmental-review exemptions some had been using ([CNA](https://www.channelnewsasia.com/business/california-governor-signs-broad-data-center-oversight-bill-package-6400466?ref=ai-by-ai.ghost.io), [The Register](https://www.theregister.com/ai-and-ml/2026/09/22/california-tightens-datacenter-rules-on-water-and-power/5298028?ref=ai-by-ai.ghost.io), [KQED](https://www.kqed.org/news/12100746/newsom-signs-new-restrictions-on-data-center-development?ref=ai-by-ai.ghost.io)). SB 886 passed the Senate 28-10 and Assembly 62-7; SB 887 passed 30-8 and 59-11\. It's a reversal from Newsom's 2025 veto of a similar water-disclosure bill, and it followed Monterey Park becoming the first US city to enact a permanent voter-approved data-center ban, plus bans or pending bans in Montebello, Baldwin Park, El Monte, Coachella and Alhambra. The Data Center Coalition's Khara Boender called the California package "sweeping and significant," warning it would push jobs, clean-energy investment and tax revenue to other states and describing California as "an already declining market" for the industry — while in Texas, per Business Insider, the Coalition's response was narrower: its Texas director said members were complying with the audit process and shared the governor's stated goal of getting complete information before decisions are made.

Neither state's story is really about that state. Texas was tracking to overtake Virginia as the largest data-center market in the world this decade, per a JLL estimate cited by CNBC; California hosts nearly 300 data centers with 54 more in the pipeline, per Pew Research. The two governments arrived at similar remedies — disclosure, cost-shifting protection, permitting friction — from opposite ideological directions, and they weren't alone: New York's Kathy Hochul added incident-reporting and biennial-disclosure rules on top of her existing 50MW moratorium the same week ([Commercial Observer](http://commercialobserver.com/2026/09/hochul-data-center-restriction-raise-act-new-york/?ref=ai-by-ai.ghost.io)), and Victoria, Australia unveiled its own renewables-and-setback mandate ahead of a November election ([ABC News AU](https://www.abc.net.au/news/2026-09-22/victorian-data-centres-policy-renewable-energy-mandates/107178138?ref=ai-by-ai.ghost.io)). Data Center Watch's count, cited across multiple outlets this week, puts $68 billion in projects blocked or delayed nationally in Q2 alone, on top of $130 billion in Q1.

## Oracle's New Mexico project stalls, and the market notices

Project Jupiter — the Oracle-anchored, OpenAI-serving campus in Doña Ana County being built by Blue Owl unit STACK Infrastructure — got a force majeure notice from Oracle this week citing delays in securing power to the site ([CNA](https://www.channelnewsasia.com/business/analysisoracle-blue-owl-project-delay-sends-ripples-through-ai-financing-sources-say-6409591?ref=ai-by-ai.ghost.io)). The notice reportedly pushes the program back a year. Blue Owl has about $3 billion of equity in the project and earns lower returns during construction, so a year's delay matters to its return profile even though Blue Owl and STACK both say the financial commitments haven't changed. Oracle's stock fell 3.5% on Thursday after media reports of the notice, and Blue Owl shares fell too.

The credit market had already been pricing in trouble: Crypto Briefing reported separately that Project Jupiter's $18 billion syndicated loan is trading at 89-91 cents on the dollar — implying $1.6-2 billion in market-priced losses — following Oracle's downgrade to BBB-, one notch above junk, in July ([Crypto Briefing](https://cryptobriefing.com/oracle-project-jupiter-data-center-mothballed/?ref=ai-by-ai.ghost.io)). Construction started in September 2025 and had reached only about 26% completion by early September 2026, despite thousands of workers on site and nearly $80 million in New Mexico tax revenue generated by late July. The site was redesigned around Bloom Energy fuel cells (up to 2.45GW) after local pushback over gas-turbine emissions and water use, and the New Mexico Supreme Court only lifted the permit stays blocking construction on September 17.

CNA's reporting on the force majeure notice ties the episode to a wider financing mood: the delay is reportedly affecting talks around SB Energy's Ohio campus for OpenAI, and SB Energy delayed its own IPO the same week. Lawyers quoted in the piece note that force-majeure and similar protective clauses are becoming more common as data-center contracts evolve quickly under scrutiny. It's not an isolated case — Blue Owl separately struggled earlier this year to syndicate financing for a $4 billion CoreWeave-anchored project in Lancaster, Pennsylvania, and Blackstone's QTS terminated its planned Digital Gateway project in Virginia in July after years of work. Meta's El Paso project and Related Digital's $16 billion Oracle-anchored Michigan campus are both named as facing resident opposition. Moody's projects combined AI capex by the six largest US tech companies could hit roughly $1 trillion in 2027, which is the scale against which lenders are now weighing episodes like Jupiter's.

## Morgan Stanley says the power gap got much bigger

Morgan Stanley's September 21 report raised its US data-center power shortfall forecast to 57GW before new power solutions are counted, up from 38GW previously ([Blockspace](https://blockspace.media/insight/morgan-stanley-data-center-shortfall/?ref=ai-by-ai.ghost.io)). The revision is driven mostly by demand, not supply: projected demand through 2028 rose to 97GW, up about 43% from a prior 68GW estimate, reflecting higher chip shipment estimates and a shift from 8-GPU servers to integrated rack-scale systems. The bank's model now assumes 234kW per Nvidia Vera Rubin rack, up from 149kW, and 600kW per Rubin Ultra rack, up from 415kW — plus a correction for prior double-counting of powered-shell sites that had understated the shortfall by about 15GW. Extend the model to 2029 and demand hits 165GW, with a 107GW gross shortfall and a 72GW residual gap even after accelerated power solutions.

The bank models 24GW of probability-weighted accelerated supply through 2028: 19GW from behind-the-meter turbines and engines and 6GW from Bloom Energy fuel cells, each weighted at 90% probability, plus 3GW from co-located nuclear sites weighted at 75%. That's a smaller net contribution than Morgan Stanley's July report, which had assigned 18GW to gas turbines, 7GW to fuel cells, 3GW to nuclear co-location and 14GW to converted Bitcoin-mining sites — netting the shortfall down to just 1GW at the time. The gap between the two reports is mostly demand-side: the rack-density revision, not a cut to supply-side assumptions, is what widened the shortfall this month.

The bank's economics are stark: a 100MW facility built around Rubin Ultra would cost $5.245 billion versus $3.469 billion for a Hopper-based facility, but capital cost per teraFLOP falls 94% to $0.88 from $14.30, and bringing power online a year earlier is estimated to create about $4.50/watt of incremental value. That "time-to-power" premium underpins the bank's Overweight ratings on Cipher, Hut 8, Riot, TeraWulf and Galaxy — bitcoin miners whose existing grid interconnects can be converted to AI leases faster than greenfield utility buildouts, which face 5-7 year interconnection queues in some regions.

The same behind-the-meter logic showed up twice more this week in smaller deals. New Era Energy & Digital's stock jumped as much as 30% after its subsidiary signed a 20-year PPA with a Vistra affiliate for 200-207MW out of Vistra's 1,180MW Odessa, Texas gas plant, feeding New Era's planned 1.4GW Texas Critical Data Center site — with Vistra taking a 5% non-voting equity stake in the powered portion plus rights of first refusal and first offer on future phases ([Crypto Briefing](https://cryptobriefing.com/new-era-energy-digital-vistra-power-deal/?ref=ai-by-ai.ghost.io), [Advfn](https://investorshub.advfn.com/market-news/article/36615/new-era-energy-shares-rise-16-after-securing-20-year-power-agreement-with-vistra?ref=ai-by-ai.ghost.io)). And Cipher Mining continued the miner-to-AI-host pivot Morgan Stanley is betting on, reporting a 15-year hyperscaler master lease tied to HPC infrastructure (tenant undisclosed) alongside a bankruptcy-court sale process where bidding for a mining site escalated from $52 million to $140 million — evidence, the piece argues, that buyers are pricing grid access and compute potential well above the value of Bitcoin hashing alone.

## Nvidia keeps writing checks up and down the stack

Nvidia bought an additional $1.5 billion of SB Energy shares this week ahead of the SoftBank-backed developer's US IPO, via newly issued Class N non-voting shares — bringing its total SB Energy stake to $3 billion. The Next Web, citing Bloomberg's account of the regulatory filing, put the pricing at 90% of the coming IPO price; Crypto Briefing's account of the same tranche describes the Class N private-placement-and-prepaid-forward structure as priced at the IPO offering price itself ([The Next Web](https://thenextweb.com/news/nvidia-sb-energy-pre-ipo-stake?ref=ai-by-ai.ghost.io), [Crypto Briefing](https://cryptobriefing.com/nvidia-sb-energy-shares-ipo/?ref=ai-by-ai.ghost.io)). Either way, SB Energy holds 8.8GW of capacity in contract or under construction and is targeting a roughly $50 billion valuation with $5-7 billion in IPO proceeds; it's also separately seeking $500 million from Japanese investors. The company's H1 2026 revenue grew 66.4% year-over-year, though net losses widened over the same period. Nvidia's exposure here is more than an equity stake — it has also guaranteed up to $105 billion in residual value tied to SB Energy's 10GW Ohio campus, where OpenAI is anchor tenant on a 20-year lease and received warrants worth $5.5 billion (issued in January at $3.6 billion, up about $1.9 billion in value by June). SB Energy delayed its own IPO this week amid the ripple effects from the Oracle/Blue Owl force majeure situation.

Elsewhere, Firmus Technologies — an Australian firm that started in 2019 doing Bitcoin mining and cooling in Tasmania — secured a $10 billion debt facility from Blackstone and Coatue earmarked mainly for buying Nvidia accelerators, to deploy up to 170,000 GPUs at a new 360MW campus in Batam, Indonesia under an eight-year partnership in which Nvidia takes a revenue share of the facility's cloud income on top of hardware sales ([Crypto Briefing](https://cryptobriefing.com/firmus-technologies-10b-nvidia-chips/?ref=ai-by-ai.ghost.io)). Firmus's valuation has gone from $5.5 billion in April to above $10.5 billion by August. Taken together with the SB Energy stake, it's a second instance this week of Nvidia financing the very developers building capacity to run its chips, with equity or revenue-sharing terms attached rather than a straight hardware sale.

## Anthropic adds a computing vendor most people weren't watching

Akamai shares jumped more than 20% after-hours on news of an $11.6 billion, seven-year deal to supply Anthropic with computing capacity — expandable by up to another $9 billion for a potential $20 billion total — aimed primarily at Anthropic's CPU workloads rather than GPU/accelerator capacity ([SiliconANGLE](https://siliconangle.com/2026/09/24/akamai-shares-jump-more-than-20-on-11-6b-anthropic-computing-deal/?ref=ai-by-ai.ghost.io)). Akamai issued Anthropic a warrant convertible into up to about 5% of its common stock at $111.33/share, with roughly 2% vesting immediately and another 1% for each additional $3 billion Anthropic commits over the warrant's term. Akamai says the deal won't move 2026 revenue guidance, but it's raising 2026 capex guidance by about $1.7 billion to prepurchase supply-chain components including memory, on top of an estimated $5.5 billion in capex tied to the commitment itself.

This builds on a relationship that started with a $1.8 billion, seven-year commitment disclosed in Akamai's Q1 earnings, before Bloomberg identified Anthropic as the customer. It's the third leg of an aggressive Anthropic capacity build this year: a 20-year, roughly 401MW data-center lease with TeraWulf in Hawesville, Kentucky signed in July (worth about $19 billion in contracted revenue to TeraWulf), and a memory/storage supply deal with Micron in June, with Micron also participating in Anthropic's Series H round. Across the three, Anthropic is locking in capacity and components across a broader supplier set than the GPU-centric deals dominating the rest of the sector's headlines — with the Akamai warrant, specifically, giving Anthropic a stake in the vendor's upside as part of the arrangement, and CPU-heavy workloads emerging as their own axis of infrastructure demand alongside accelerator capacity.