This Week in Data Center News 10.7.25

This week's data center news highlights major strategic investments, localized development challenges, and significant economic impacts, all against the backdrop of the intense demands of AI and High-Performance Computing (HPC) workloads. The industry is rapidly advancing liquid cooling technologies, as evidenced by Johnson Controls' investment in Accelsius's two-phase, direct-to-chip solution, which promises substantial efficiency and cost savings. Simultaneously, while states like Ohio tout the economic benefits—reporting over $5.2 billion in tax revenue since 2017—local opposition, as seen with the rejection of a proposal in Plymouth Township, underscores ongoing siting and community relations challenges. For developers looking at large-scale capacity, significant debt financing is enabling massive projects, with Lancium securing $600 million for its Abilene site, home to one of OpenAI's StarGate developments, and major players like Centersquare completing a $1 billion acquisition, signaling robust market consolidation and investor confidence in mission-critical infrastructure.

Johnson Controls announces investment in Accelsius to power direct-to-chip liquid cooling

Johnson Controls has made a multi-million dollar strategic investment in Accelsius, a company specializing in two-phase, direct-to-chip liquid cooling for data centers. This move comes as the industry grapples with the intense cooling demands driven by the sharp growth in AI, with cooling systems already accounting for 30-40% of a data center's energy consumption.

Accelsius's two-phase technology uses a non-conductive fluid that changes from liquid to vapor to extract heat more efficiently, promising significant operational and cost savings. According to Accelsius, their solution enables a 35% OpEx reduction over single-phase direct-to-chip cooling and up to a 17% total cost of ownership saving. This investment signals a strong industry push towards advanced liquid cooling to manage power-dense AI and HPC workloads more sustainably.

This partnership combines Johnson Controls' extensive portfolio in thermal management, including its award-winning YORK® YVAM chillers and Silent-Aire Coolant Distribution Units, with Accelsius's innovative direct-to-chip solutions. For developers, this collaboration points to a future of more integrated, scalable, and energy-efficient cooling systems designed to unlock new levels of performance and sustainability in high-density data centers.

Plymouth Township votes 4-0 not to recommend data center proposal on old steel mill site

On October 1st, the Plymouth Township Planning Agency voted 4-0 to not recommend a special exception for a proposed data center on the former Conshohocken steel plant site. Developer Brian O’Neill, who has the property under agreement, sought the exception, arguing that data centers are of a similar character to laboratories and warehouses, which are permitted uses under the current zoning.

To address common concerns, O'Neill explained the proposed data center would use a closed-loop water system and generate its own power via on-site natural gas turbines, not by drawing from the local grid. He positioned the project as a significant financial benefit, estimating it would generate substantial tax revenue for the township, school district, and county, offsetting the area's high office vacancy rate.

Despite these arguments, the proposal faced unanimous public opposition during the meeting, with residents raising concerns about noise, pollution, and the retention of industrial uses along the riverfront. Some professionals in the data and AI fields also challenged the developer's comparisons. Following the planning agency's negative recommendation, O'Neill must now decide whether to proceed to the zoning hearing board or seek a zoning amendment from the township's council.

Ohio Chamber of Commerce releases study indicating data centers have contributed over $5.2 billion in state tax revenue

A recent study by the Ohio Chamber of Commerce Research Foundation highlights the significant economic impact of data centers in the state, with projections showing approximately $40 billion in investments by 2030. In 2024 alone, the industry is expected to generate $1 billion in state and local tax revenue. Since 2017, the total tax revenue contribution—including direct, indirect, and induced impacts—has reached $5.2 billion.

This growth is accompanied by a projected 800% increase in energy demand over the next six years, posing a challenge as building out the electric grid can take five to ten years. The report also emphasizes the importance of maintaining favorable policies, such as sales tax exemptions for construction materials, which Governor Mike DeWine has supported. The study argues that eliminating these incentives could reduce investment by 35% and decrease revenues by $500 million by 2030.

Despite debates over tax incentives, with some analyses suggesting potential revenue losses for the state, the Chamber's report concludes that the economic benefits—including GDP growth, job creation, and local revenues—make a strong case for pro-data center policies. The Ohio House is still considering whether to override the governor's veto on the tax exemption elimination, signaling an ongoing discussion about the future of data center development in the state.

Lancium LLC secures $600 million in debt financing for Abilene site hosting one of StarGate’s data centers

Data center and powered land provider Lancium has reportedly secured a $600 million debt financing package through financial services firm Cantor Fitzgerald. This funding is designated for Lancium Abilene LLC, a subsidiary that owns a 1.2 GW powered land package in Abilene, Texas. Lancium, a Blackstone portfolio company, originally launched as a crypto-mining firm but has since pivoted to developing large-scale "Clean Campuses."

The Abilene campus is a significant site, hosting OpenAI's debut Stargate data center development. Crusoe is developing multiple data centers on this site for Oracle, which will, in turn, be used by OpenAI. The first two buildings are already live, with work on another six underway for a planned launch next year.

This financing supports Lancium's broader strategy to build five data center campuses across West Texas, aiming for a total of 5GW of capacity. The company's expansion plans also include a potential 2GW site in Childress County and another development in Hall County, positioning it as a key player in the region's data center growth.

Centersquare announced $1 billion deal to boost its portfolio and investment in over 80 facilities across the country

Centersquare, a data center company created through a roll-up deal by Brookfield Infrastructure Partners last year, has completed a $1 billion acquisition that expands its portfolio to 80 facilities. This major investment demonstrates the continued consolidation and growth in the data center sector, driven by increasing demand for digital infrastructure.

The acquisition represents significant capital deployment in the data center market, reflecting the strong investor appetite for mission-critical infrastructure assets. For data center developers, this transaction signals robust market conditions and the potential for premium valuations, particularly as institutional investors like Brookfield continue to view data centers as essential infrastructure investments with stable, long-term returns.

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