Power Shortage Stalls Data Center Expansion in Nvidia's Backyard

As of November 10, 2025, the tech sector in the United States is facing a significant challenge – the lack of access to reliable electricity is hampering the growth of data centers, particularly in areas with high demand for AI computing.

In Santa Clara, California, where Nvidia Corporation, the world's largest supplier of AI chips, is headquartered, two major data center projects have been left vacant for years. Digital Realty Trust Inc. applied to build a data center in the city back in 2019, but the development remains an empty shell, awaiting full energization. Similarly, Stack Infrastructure, which was acquired by Blue Owl Capital Inc. earlier this year, has a nearby 48-megawatt project that also remains vacant, as the city-owned utility, Silicon Valley Power, struggles to upgrade its capacity to meet the rising demand.

This power supply issue is not limited to Santa Clara. Across the country, the demand for data centers has never been higher, driven by the boom in cloud computing and AI. However, aging power infrastructure, a slow build-out of new transmission lines, and various regulatory and permitting hurdles are creating significant constraints. According to projections by BloombergNEF, electricity requirements from AI computing in the US alone are expected to more than double by 2035, further exacerbating the problem.

The pressure on power systems is only going to increase as corporate leaders, such as Nvidia's Jensen Huang and OpenAI's Sam Altman, have predicted that trillions of dollars will be poured into building new AI infrastructure in the coming years.