State of the Buildout

Twenty issues ago, this newsletter set out to do something that didn't exist anywhere else: cover the data center industry honestly, from both sides, with concrete intelligence for the people who actually have to build, finance, contract, and live near these projects.

Twenty issues later, the picture has gotten clearer, and stranger, than I expected.

Yesterday, voters in Monterey Park, California passed Measure NDC in what one organizer called "a victory landslide." The measure permanently prohibits data centers within city limits. The Australian developer who proposed a 250,000-square-foot AI facility near homes, promising significant revenue for parks, libraries, and infrastructure repairs without raising residential taxes, had already withdrawn the application before the vote. They could read the room. Voters made it official.

That happened on Tuesday. On Wednesday, Virginia legislators announced they'd return to Richmond on June 18 with the data center tax exemption still unresolved. The state's biennial budget remains in limbo. Senate Finance Chair Louise Lucas has now lowered her revenue ask from $1.9 billion to $1.6 billion annually. Governor Spanberger continues to insist she won't "break a contract the state has signed."

On the same day, the EPA's investigation of the Meta Stanton Springs data center in Morgan County, Georgia, triggered by the AOC brown water hearing covered in Issue #19, was reportedly moving forward, though no formal investigation start date has been announced.

This is the data center industry in June 2026. Communities are voting projects down. State governments are nearly shutting down over tax exemptions. Federal agencies are investigating water contamination. And the buildout is still accelerating.

That last point is the one most people miss. The opposition is real and growing. The construction is real and growing faster.

Both are true. That contradiction is the entire story.

For Issue #20, I want to do something different. Instead of one focused topic, this issue synthesizes everything we've covered since #14, the political tipping point, the waste heat opportunity, the land game, the opposition economy, the Cedar Rapids playbook, the brown water crisis, into a single picture of where this industry actually stands.

I also want to introduce what comes next: a new project under The DC Pipeline that addresses the constraint that connects every story we've covered. More on that toward the end.

Let's get into it.

The mid-year picture, drawn from the reporting tracked across the last 19 issues:

The Capital:

The Build:

The Power Demand:

The Opposition:

The Economic Activity:

The Hidden Markets:

The story those numbers tell: this is the largest single category of capital deployment in American history right now. And it's running on infrastructure, regulatory frameworks, and community relationships that weren't built for it.

Five things have become clearer over twenty issues:

1. The political tipping point is real and accelerating.

Six months ago, Monterey Park voting down a single data center would have been a curiosity. Yesterday, it was a national story covered by ABC. Northampton County, North Carolina passed a 32-month moratorium in May. Durham passed a 60-day moratorium that the council member explicitly framed as "the first, not the only." Maine's veto of LD 307 didn't end the conversation, the legislature is already drafting modified legislation for next session. Ohio voters may decide a statewide ban in November.

This isn't fringe. NPR has called it a kitchen table issue for the 2026 midterms. AOC held up two jars of brown water at a congressional hearing and forced the EPA to commit to investigation under oath. The opposition has gone from local NIMBY to organized, professional, multi-million-dollar national movement.

The buildout will continue. But the terms under which it continues are getting renegotiated in real time.

2. The information vacuum is the source of the political crisis.

Issue #17 documented the pattern: NDAs in 80% of Virginia data center deals. Shell companies in Wisconsin, Michigan, Minnesota, Arkansas, Arizona. Project Bigfoot. Project Maize. Project Delta. "Ken Confidential."

When local officials cannot tell residents what is being built or by whom, the vacuum gets filled with speculation. Some of it legitimate. Some of it edges into theories that aren't supported by facts. Either way, the developers blame the activists for "misinformation." The activists point out that you can't be informed about something nobody will tell you.

The Cedar Rapids playbook (Issue #18) demonstrated the alternative. Google and QTS were publicly identified throughout the process. The contracts are public. The community fund is governed in open council meetings. Both deals closed at scale, $2.3 billion combined, without NDAs or shell companies.

Transparency isn't fatal to deals. Secrecy is fatal to communities accepting them.

3. Power is the binding constraint behind everything else.

Every story this newsletter has covered traces back to power.

The political fights are about cost-shifting from data centers to residential ratepayers. The land game (Issue #16) revealed that substation proximity is now the most valuable feature of American real estate. The waste heat opportunity (Issue #15) only exists because data centers generate gigawatts of heat that have to go somewhere. The brown water story (Issue #19) is fundamentally about cooling, which is fundamentally about power dissipation. The Cedar Rapids deals depend on Alliant Energy's ability to deliver. The Maine veto was driven by power infrastructure concerns. The Virginia budget standoff is about who pays for the grid upgrades.

The interconnection queue in Northern Virginia now stretches up to seven years. The companies that can deliver megawatts to a tenant on a developer's underwriting timeline have the most pricing power in this entire industry. The bottleneck isn't capital. The bottleneck isn't even land. The bottleneck is power.

4. The lifecycle business is bigger than the construction business.

This was the thesis of Issue #14, and it's been reinforced by every issue since. The construction phase is what dominates the headlines. The decades of operation, maintenance, equipment replacement, waste management, and eventual decommissioning are what generate the recurring revenue.

The numbers from across the series:

The installed base creates the recurring revenue. The construction phase just creates the installed base.

5. The third path works where it's tried.

Issue #17 named it. Issue #18 documented it. Cedar Rapids isn't an anomaly. DeKalb, Illinois (Meta), San Jose, Lancaster, El Paso, every place that has structured transparent, performance-tied, community-funded development agreements is producing better outcomes than places running the shell-company-NDA-confrontation playbook.

The Brookings Institution published a CBA template. The NAACP published one with proposed $50,000-per-day penalty provisions. Specialty firms are now positioning to help developers structure these deals. Multiple municipalities are studying the Cedar Rapids agreements as models.

The professional services market emerging around CBA negotiation and compliance monitoring, $200K-$1M per negotiation plus 20-year compliance contracts, is one of the most under-served opportunities in this industry.

If those are the patterns, here are the inflection points to watch:

Federal regulation is going to enter the picture.

The EPA water investigation following the AOC hearing is the leading edge. Once federal agencies start formally investigating data center impacts, the regulatory environment changes regardless of who controls Congress. Expect:

The Landsman bill (H.R. 8033, the No Harm Data Center Act) is unlikely to pass this Congress. But its provisions will become the template for federal action regardless of which party holds power in 2027.

The Virginia precedent will spread.

When Virginia's budget standoff finally resolves, and it will, before July 1 or shortly after, the structure that emerges will become the template for every other state. If the data center tax exemption survives in modified form (tied to clean energy requirements, capped at a lower amount, or restructured as a consumption tax), other states will copy that. If it's eliminated outright, that will trigger a race to the bottom among states still offering full exemptions.

Either outcome reshapes the economics of where data centers get built for the next decade.

Closed-loop cooling becomes the standard.

The brown water story will force this. So will the Cedar Rapids requirements. So will the Saline Township debate in Michigan. So will the multiple state-level reviews of large-load power demands.

By the end of 2026, expect:

This will be expensive for the industry in the short term. It also dramatically reduces the political risk to projects.

The Ohio ballot measure tests the limits.

The Ohio statewide ballot measure requires 413,488 valid signatures by July 1 to qualify for the November ballot. Whether it qualifies, and if it does, how voters respond, will be the most important political signal of where this industry is headed.

A failure to qualify suggests the opposition movement has hit organizational limits. Qualifying but losing at the ballot suggests there's still political capacity for the industry to win community fights. Qualifying and winning would change the entire national conversation overnight.

The data center industry should be watching Ohio more closely than Virginia. Virginia is about money. Ohio is about whether democracy can stop the industry entirely in a state that wants to.

The directory layer emerges.

This is the structural change happening right now that nobody is naming. The industry has gotten too big and too fragmented for ad hoc relationships. Developers need vetted vendors. Vendors need credible visibility. Cities need professional advisors. Contractors need supplier networks. Communities need legal expertise.

The information infrastructure to navigate this industry doesn't exist yet. It's about to.

Which brings me to what's next.

Over the last twenty issues, one theme has shown up again and again: power is not just a utility issue anymore. It's a supply chain, site-readiness, permitting, equipment, and execution issue.

Developers are chasing power-ready sites. Contractors are navigating lead times measured in years. Operators are thinking harder about redundancy, backup generation, UPS systems, cooling, and interconnection. The suppliers who can actually support mission-critical infrastructure are becoming as important to the project timeline as the developers themselves.

So I'm starting a new project under The DC Pipeline:

The DC Pipeline Power Equipment Map

A curated supplier intelligence project for the companies solving data center power bottlenecks.

This will not be a generic vendor directory. The goal is to build a practical sourcing layer around the categories that matter most when a data center project needs to get powered, cooled, connected, and built.

The first version will focus on nine categories:

Each supplier profile will eventually track practical buying information: service regions, equipment categories, brands handled, new/used/refurbished/surplus capabilities, emergency availability, typical lead-time ranges, data center or mission-critical experience, and whether the supplier accepts structured sourcing requests.

The goal is simple. Make it easier for data center developers, operators, contractors, and infrastructure teams to find credible suppliers for power-critical work.

This is a soft launch. The first version is being built. I'm sharing the categories now so the right suppliers, buyers, and partners can weigh in before the application process opens.

If your company sells, brokers, refurbishes, installs, engineers, or consults around data center power equipment or power-readiness, I'd like to hear from you. If you're a buyer, developer, contractor, or operator who has struggled to find suppliers in any of these categories, I'd also like your input on what would actually make this map useful.

A few important notes on what this is and isn't:

The DC Pipeline Power Equipment Map will not guarantee vendor performance, pricing, availability, licensing, insurance, or project outcomes. Profiles will be reviewed for basic fit and completeness. Buyers should always conduct their own due diligence. The platform will be built around first-party supplier data, profile claims, source tracking, and manual review, not scraped listings.

The application process and supplier portal will open soon. To be notified when applications open, simply reply to this email with "MAP" in the subject line, and you'll be added to the early access list.

If power is becoming the constraint behind the next wave of data center development, then the supplier ecosystem around that constraint deserves to be mapped. That's what I'm building next.

Monterey Park, CA - Measure NDC passed. Voters approved the citywide data center prohibition in a landslide. Organizer Steven Kung of No Data Center Monterey Park: "We had a victory landslide." The Australian developer behind the proposed 250,000-square-foot AI data center near residential areas had already withdrawn the application before the vote, citing new city restrictions. The group is now focused on the neighboring City of Industry, which is reportedly building a battery energy storage system to support a data center project.

Virginia. Lawmakers will return to Richmond June 18 for another attempt at a budget deal. The House reconvenes June 18, the Senate June 22. Senate Finance Chair Louise Lucas has reduced her revenue ask from $1.9 billion to $1.6 billion annually. As of Lucas's tweet on June 2: "The good news is that we're getting close to an agreement on how to pay for core services." Spanberger has held firm on not breaking signed contracts but has floated a "consumption tax" on data center energy use as an alternative. The fiscal deadline is June 30 to avoid partial government shutdown.

Morgan County, GA. The EPA's pledged investigation of water contamination near Meta's Stanton Springs facility continues. No formal investigation start date has been announced. Meta maintains a third-party study found no connection between the data center and well issues. The company has provided $4.5 million in direct funding to local schools and nonprofits and continues to publicly commit to becoming "water positive" by 2030.

Grimes County, TX. The June 3 public hearing on the SpaceX/xAI facility produced significant turnout but no final decision. Hearings will continue.

Ohio. Statewide ballot signature gathering continues. July 1 deadline. Organizers report continued volunteer recruitment but the deadline is tight.

Federal. Rep. Ocasio-Cortez and Sen. Bernie Sanders' AI data center pause legislation remains in committee. The EPA pledge to investigate Morgan County remains active. No formal Landsman bill (H.R. 8033) movement.

Coming Up:

Twenty issues in, the picture is clear.

The data center buildout is the largest single category of capital deployment in American history. It's also generating the most concentrated community opposition any industry has faced in a generation. Those two facts are not in tension. They are the same fact, viewed from different sides.

The professionals who recognize this, who can navigate between the developers and the communities, who understand that power is the binding constraint, who position themselves in the lifecycle services and supplier ecosystems that the construction phase creates, are going to define the next decade of this industry.

This newsletter exists to help you see what others miss. The DC Pipeline Power Equipment Map is the next step: not just covering the industry, but starting to map the supplier ecosystem that makes it work.

Thanks for reading these first twenty issues. The next twenty are going to be more interesting than the last.

The DC Pipeline tracks data center construction, policy, and market intelligence across North America. New issues weekly.

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