The pace of data center development shows no sign of easing, and July 2026 delivered a dense mix of groundbreakings, regulatory actions, and community flashpoints that will shape the industry for years to come.
Construction Spending Hits Record Levels
New US Census Bureau data confirms that data centers have become the largest segment of commercial building construction, with project spending reaching a seasonally adjusted annual rate of $51 billion. That figure surpasses traditional categories like office development and is widely expected to keep climbing given current demand signals.
Power and Grid Policy Move to Center Stage
The Federal Energy Regulatory Commission (FERC) issued show-cause orders to the six largest US grid operators, directing them to defend or rewrite interconnection rules for large loads. The orders set deadlines for markets to define processes for handling gigawatt-scale load requests, evaluating co-located generation, assigning upgrade costs, and confirming sufficient generation at project launch.
Texas added its own layer of oversight: the state’s Public Utility Commission approved a one-time, systemwide process to evaluate new large loads and load expansions of 75 MW or more. The overhaul shifts oversight from a utility-by-utility approach to a centralized ERCOT-led evaluation, a direct response to the volume of data center and AI-related power requests hitting the grid.
Virginia, meanwhile, enacted a first-of-its-kind consumption tax on data center electricity use, set at $0.011 per kilowatt-hour beginning July 1, 2026. Legislative estimates project the tax will generate $600 million annually for the state’s general fund over the next two fiscal years.
Major Hyperscale Announcements
Missouri is emerging as a serious hyperscale destination. In Montgomery County alone, Amazon plans to invest $10 billion in a new data center campus, and Google will invest $15 billion in a separate project, bringing the total announced value for that single county to $25 billion.
In Wisconsin, Microsoft cut the ribbon on its $3.3 billion facility at Mount Pleasant, the first data center at that campus and now fully operational after a period of limited operations. The project has become one of Microsoft’s highest-profile AI infrastructure builds.
Microsoft also broke ground in La Porte, Indiana, pairing the announcement with the opening of Indiana’s first Microsoft Data Center Academy in partnership with Ivy Tech Community College. Separately, the company signed a 20-year power agreement with Chevron to supply dedicated electricity for a planned campus near Pecos, Texas, described as one of the largest pairings of compute infrastructure and on-site generation in the country.
Other notable moves include Digital Realty acquiring 1,440 acres in the Kansas City market, with an Energy Service Agreement for 600 MW of utility power by early 2028 and a projected full capacity of 2 GW. In Avondale, Arizona, Prime Data Centers opened the first facility in its 240 MW hyperscale campus on a 66.5-acre site.
Community Opposition and Legal Challenges
Voters in Monterey Park, California approved a ballot measure banning data centers within city limits by an 86% margin, concluding a months-long fight over a proposed 247,000 sq. ft. facility backed by Australian investment firm HMC StratCap. The measure appears to be the first voter-enacted municipal ban on data center development in the United States.
The episode reinforces a growing industry concern that community sentiment has become as decisive a constraint as power availability, land, transmission, and supply chains.
In Wisconsin, Oracle filed a court challenge seeking to overturn state utility regulators’ decision requiring some hyperscale data center developers to post hundreds of millions of dollars in financial security. The case creates an early legal test of how states allocate the financial risks of powering AI infrastructure at scale.