With the November 3 midterm elections days away, data centers have become a political issue, and the argument is increasingly about specifics: where the buildings go, how much power they draw and who pays for the grid that serves them.
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that → become → them
Shawn Matthews, Chairman of Host Digital Inc., who has argued that politicians treat all data centers the same, told Bloomberg Tech on October 28 that projects sized to the power and real estate already in place can work with the communities around them.
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projects → argue → them
Lenders, he added, are looking harder at counterparties and cash flows before they commit.
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they → add → counterparties
Companies mentioned in today’s commentary include: Host Digital Inc. (NYSE American: HOST), Equinix, Inc. (Nasdaq: EQIX), Fermi Inc. (Nasdaq: FRMI) (LSE: FRMI), Soluna Holdings, Inc. (NASDAQ: SLNH), Galaxy Digital Inc. (Nasdaq: GLXY).
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Companies → mention → Inc.
The Question of Who Pays
Power costs are at the center of the argument.
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costs → pay → argument
In a July 27 presentation posted by PJM Interconnection, the grid operator’s independent market monitor said that of the $16.4 billion in capacity market charges in its latest auction, $6.3 billion was a result of data center load, or 38.2 percent.
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billion → post → load
Across the last four capacity auctions, the monitor said, capacity market charges resulting from data center load equal $29.4 billion, or 46.2 percent of the total.
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charges → say → total
States are writing their own rules.
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States → write → rules
Oklahoma’s Data Center Consumer Ratepayer Protection Act of 2026, which took effect July 1, sets guidelines for how the state’s utilities and regulators manage the energy demands of large-scale users, including data centers and AI facilities consuming 75 megawatts or more of power, according to the Oklahoma House of Representatives.
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utilities → take → Representatives
The law also requires developers to notify nearby landowners, county commissioners and the Oklahoma Corporation Commission within 60 days of acquiring land for qualifying projects.
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law → require → projects
Large operators are making the same commitments in their own markets.
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operators → make → markets
In its third-quarter results released October 28, Equinix, Inc. (Nasdaq: EQIX) highlighted a partnership in Georgia that it said protects ratepayers by having Equinix fund all grid infrastructure costs associated with its Hampton data center project through a 20-year commitment, and said it is supporting state standards in Texas on grid costs, water stewardship, community impact and transparency.
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it → release → costs
The company also raised its 2026 guidance.
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company → raise → guidance
“Our Q3 results and raised full-year guidance reflect the differentiated position and growing importance of Equinix,” said Adaire Fox-Martin, CEO and President, Equinix.
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Martin → raise → Equinix
Smaller Sites on Existing Power
Speed is shaping project size.
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Sites → exist → size
In the Federal Reserve’s September 2 Beige Book, contacts of the Kansas City Fed, whose district includes Oklahoma, reported historically strong electricity demand driven by growing data center development, and noted that price-insensitive technology companies are more concerned about the “speed to power” than the price of power.
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companies → include → power
Contacts said they are adapting to labor, supply chain and permitting constraints by vertically integrating operations and reducing the size of power developments to shorten project timelines.
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they → say → timelines
Host Digital Inc. (NYSE American: HOST), is built around that approach.
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Inc. → build → approach
The vertically integrated developer owns the land, the building, the power rights, the electrical equipment and the cooling at its build-to-suit sites.
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developer → integrate → sites
Its first project, Site I in northeast Oklahoma, came with an industrial building and a utility-owned substation already in place, has 55 megawatts of power available to the customer and is targeted for delivery in the first quarter of 2027, according to an October 19 letter to shareholders from Chief Executive Officer Harmol Samra.
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project → come → Samra
The site’s 15-year take-or-pay lease totals about $1.25 billion in contracted base rent over the term.
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lease → take → term
On Bloomberg Tech, Matthews said Host is looking at projects of between 20 and 100 megawatts at the start, which he described as reasonable sized projects, and argued that the jobs and tax base they create come from a footprint that stays the same.
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that → say → footprint
So we’re not changing the environment in any way.
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we → change → way
We’re just using what’s there and taking advantage of it,” said Shawn Matthews, Chairman of Host Digital, in the October 28 interview.
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Matthews → use → interview
Bringing power with the project is another route.
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Bringing → bring → project
Fermi Inc. (Nasdaq: FRMI) (LSE: FRMI), operating as Fermi America, announced on October 13 that it signed a credit support agreement with AMD supporting a lease for phase one of its Project Matador energy and AI buildout in Carson County, Texas, with 222 megawatts of gross power capacity, and a partnership agreement that establishes a framework for later phases.
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that → operate → phases
“We have the land, the permits, the water, the power equipment, and the fiber network that give us distinct performance advantages,” said Lee McIntire, Fermi Chief Executive Officer.
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McIntire → have → advantages
Lenders Take a Closer Look
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Lenders → take → Look
Matthews, a former chief executive of Cantor Fitzgerald according to Bloomberg’s introduction, said more discerning credit is healthy because credit that is readily abundant eventually causes bubbles, and that lenders are now focused on counterparties, cash flows and getting their money back with a return.
“And at this point in time, credit is becoming discerning.
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credit → accord → time
That’s not a crazy statement.
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That → ’ → ?
It’s reality,” said Matthews.
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Matthews → ’ → ?
Not everyone sees money slowing down.
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money → see → ?
In an October 7 interview published by the Federal Reserve Bank of Dallas, senior financial economist Srini Ramaswamy said project timelines may be getting a bit slower because of resistance to data centers, but that financing in the capital markets seems like it is still very much “foot on the gas pedal.”
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it → publish → pedal
Some developers are reducing leverage.
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developers → reduce → leverage
Soluna Holdings, Inc. (NASDAQ: SLNH), whose data centers are co-located with wind, solar or hydroelectric power plants, said on October 26 that it repaid in full the $28.7 million in principal outstanding to Generate Capital as of June 30, 2026, cutting its total debt principal from $37.9 million to $9.2 million and releasing Generate’s liens on the related project assets.
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it → co → assets
“Their team understood our business and backed us at an important stage of our growth,” said John Belizaire, CEO of Soluna.
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Belizaire → understand → Soluna
Others are financing at scale.
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Others → finance → scale
Galaxy Digital Inc. (Nasdaq: GLXY) reported in its third-quarter results on October 27 that Phase II of its Helios I data center campus is fully financed and under construction, following a $3.5 billion offering of senior secured notes, with data hall deliveries scheduled to begin in the second quarter of 2027.
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deliveries → report → 2027
Its Data Centers business generated adjusted gross profit of $79 million in the quarter.
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business → generate → quarter
“Our strategy is centered on two significant opportunities in the global economy: the modernization of financial markets through digital assets and the expansion of AI infrastructure,” stated Mike Novogratz, Founder and Chief Executive Officer of Galaxy.
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Novogratz → center → Galaxy
…and 21 more, not listed.
The Aporia
