Why tech giants are ditching the power grid

The rapid growth of artificial intelligence is fueling an unprecedented demand for electricity, prompting tech giants to bypass traditional power grids and construct their own off-grid power solutions. This trend, highlighted in places like central Ohio, sees companies building power plants using a combination of batteries, giant engines, and mobile natural gas generators due to lengthy wait times for grid connections, which average four years or more in the U.S. Joe Kava, a former Google data center development lead, noted that "hyperscalers are not going to be curtailed because they can’t get power." New Albany, Ohio, near Columbus, has become a pioneer in this shift, with Mayor Sloan Spalding expressing surprise as three gas-fired power plants, intended exclusively for data centers, are now under construction. EdgeConneX is behind one of these plants, while Williams Cos. is building the other two for Meta, which has committed to buying power for at least a decade. In 2024, Elon Musk’s xAI opened a data center in Memphis, Tennessee, powering it with gas turbines, and subsequently faced claims from the Southern Environmental Law Center for alleged permitting violations and Clean Air Act breaches in Memphis and Southaven, Mississippi. While companies like Meta, which cites a local utility's pause on new data center applications, pledge to offset emissions with renewable energy purchases, the off-grid approach is costly and raises significant environmental concerns. An analysis by the Environmental Defense Fund, performed for The New York Times, indicates New Albany's new plants are expected to emit more nitrogen oxides per unit of electricity than larger gas plants in Ohio, impacting air quality. Noah Malik, a New Albany resident, expressed worry that this infrastructure cements dependence on fossil fuels. Despite the immediate necessity, industry figures like Siemens Energy CEO Christian Bruch question the long-term efficiency and sustainability of these smaller, decentralized power solutions. However, manufacturers like Baker Hughes are betting on strong data center demand for several years, investing in equipment to meet the urgent need for power, even as regulators like the Ohio Environmental Protection Agency and Ohio Power Siting Board ensure compliance with environmental and noise standards.