Week of 11/07/25 Industry News
Dylan Black, Editor
Contact: dylan.black@andersen.com
The AI Data Center Boom Is Warping the US Economy
By Louise Matsakis | WIRED | November 5, 2025
Tech giants including Microsoft, Alphabet, Meta, and Amazon are pouring hundreds of billions of dollars into AI data centers—$370 billion in 2025 alone—making AI infrastructure one of the main drivers of U.S. economic growth. The massive spending spree is boosting markets and GDP but raising concerns about sustainability, as companies use creative accounting and debt financing to fund expansion. Meanwhile, the surge in power demand is straining America’s electric grid and driving up energy prices, while the broader economy faces a hiring slowdown as capital shifts from traditional industries to AI infrastructure.
Power Crunch Threatens AI Datacenter Construction
By Dan Robinson | The Register | November 5, 2025
A global shortage of electricity and cooling equipment is jeopardizing the rapid buildout of AI datacenters, according to Turner & Townsend’s 2025–2026 Datacenter Construction Cost Index. Nearly half of industry professionals surveyed cite limited grid access as the top barrier, with U.S. connection queues stretching up to seven years. The report warns that AI projects—like OpenAI’s planned facilities requiring 55 GW of power—are competing with housing and manufacturing for scarce capacity. At the same time, 83% of respondents say supply chains can’t meet demand for liquid-cooling technology needed for high-density AI workloads. Turner & Townsend urges developers to adopt on-site or grid-independent power generation, noting that escalating costs and hardware shortages threaten to stall the AI infrastructure boom.
AI Is Helping Drive Up Your Electric Bill
By Scott Horsley | NPR | November 6, 2025
Electricity prices have surged 40% since before the pandemic—outpacing overall inflation—as demand soars from electric vehicles, home electrification, and especially AI data centers powering the tech boom. Utilities are racing to add generation capacity after retiring old plants, but the cost of new infrastructure and rising natural gas prices are pushing residential rates up twice as fast as inflation. Analysts warn that if regulators give AI operators discounted power rates, households could end up footing part of the bill. The Energy Department projects electricity demand will rise another 2% next year, as utilities invest over $1 trillion in new generation and grid upgrades to keep pace with America’s power-hungry AI economy.
What We Know About Energy Use at U.S. Data Centers Amid the AI Boom
By Rebecca Leppert | Pew Research Center | November 2025
America’s 4,000-plus data centers—critical to powering AI, cloud services, and digital life—are driving a surge in electricity demand that could more than double by 2030. U.S. data centers consumed 183 terawatt-hours of power in 2024, or 4% of national use, with hyperscale AI facilities using as much energy as hundreds of thousands of homes. Concentrated hubs like northern Virginia already draw a quarter of local electricity supplies, straining grids and pushing utilities to make costly upgrades that could raise household bills by as much as 25% in some regions. Natural gas remains the primary power source, though renewables and nuclear are gaining ground as states consider new sustainability mandates. As public concern grows, Americans remain divided over whether AI will ultimately help or harm the environment.
OpenAI Clarifies: Government Loan Talks Focus on Chip Plants, Not Data Centers
By Deepa Seetharaman, Krystal Hu, and Arsheeya Bajwa | Reuters | November 6, 2025
OpenAI CEO Sam Altman said the company has discussed federal loan guarantees with the U.S. government to support domestic chip manufacturing—but not to finance its data centers—after remarks from its CFO sparked criticism that OpenAI was seeking a bailout. Altman emphasized that taxpayers shouldn’t back private data center projects and said the talks align with broader efforts to strengthen America’s chip supply chain. OpenAI has pledged $1.4 trillion in infrastructure spending over eight years and is exploring ways to sell computing capacity directly through an “AI cloud” service to fund expansion. The company, which lost more than $12 billion last quarter, remains unprofitable despite projected 2025 revenues exceeding $20 billion. White House AI czar David Sacks reiterated there will be no federal bailout for AI firms, as OpenAI and other tech giants race to build the chips and data centers powering the industry’s explosive growth.
China Leans on Huawei Chip Clusters and Cheap Energy to Compete in AI Race
By Arjun Kharpal | CNBC | November 6, 2025
China is countering U.S. dominance in artificial intelligence with vast clusters of Huawei-made chips and abundant low-cost energy, even as its semiconductors lag behind Nvidia’s. Huawei’s Ascend 910C chips, linked in massive “CloudMatrix” clusters, can rival Nvidia’s top systems in performance—but at far higher power consumption. Beijing’s subsidies, cheap electricity, and expansion of nuclear and renewable energy make this approach viable, offsetting the inefficiencies of its less advanced chips. Huawei’s processors are built by SMIC using older 7-nanometer tools, limiting competitiveness with Taiwan’s TSMC. Analysts say China’s AI ambitions hinge on whether it can scale domestic chip production despite U.S. export controls that block access to cutting-edge manufacturing equipment.
China’s AI Boom Sparks Surge in Power Stocks
By Bloomberg News | November 7, 2025
Chinese power and energy equipment stocks are soaring as investors bet that the country’s AI-driven data center boom will supercharge electricity demand. CSI Solar has jumped over 40% this week and TBEA nearly 30%, far outpacing the CSI 300 Index. Analysts say the rally reflects growing optimism that China’s push to expand renewable and grid infrastructure will fuel long-term gains for power suppliers and energy storage firms. UBS forecasts national power demand to rise 8% annually by 2028, calling China’s energy sector the next big beneficiary of AI growth as domestic chip constraints begin to ease.
Nvidia CEO Walks Back Comment That ‘China Is Going to Win the AI Race’
By Chris Morris | Quartz | November 6, 2025
Nvidia CEO Jensen Huang is clarifying remarks after reportedly saying “China is going to win the AI race” at the Financial Times Future of AI Summit. Hours later, Nvidia released a statement from Huang saying China is only “nanoseconds behind America in AI,” stressing that the U.S. must “race ahead” to stay competitive. Huang has long argued that allowing Nvidia to sell chips to China makes Beijing reliant on U.S. technology—a stance complicated by recent trade tensions and China’s move to block Nvidia chips under a national security review. Despite the geopolitical strain, Nvidia’s valuation topped $5 trillion last week, with shares up more than 40% this year.