This Week in Data Center News: 12.15.2025

The data center industry is facing a critical inflection point, with the pursuit of Artificial General Intelligence (AGI) driving expenditure into the trillions while simultaneously exposing vulnerabilities in financing, supply chains, and local regulatory environments. This week’s headlines underscore the extreme capital commitments required for AI-scale infrastructure alongside the significant development risks and the continued push for specialized cooling innovations.

IBM CEO breaks down $8 trillion AGI push cost

IBM CEO Arvind Krishna has presented a stark estimate of the financial outlay required for the industry’s pursuit of Artificial General Intelligence (AGI), stating that a 100-gigawatt AGI effort could cost a massive $8 trillion. He noted that outfitting a single one-gigawatt AI data center costs about $80 billion at "today's number". This astonishing capital expenditure projection is based on announced AI infrastructure plans.

For data center developers, this figure validates the extreme nature of the AI infrastructure gold rush but also introduces significant financial risk. Krishna highlighted that AI hardware, such as GPUs, often needs to be replaced in about five years due to depreciation, placing constant pressure on future capital expenditure and return on investment (ROI). Developers must find financial models that can absorb these rapid refresh cycles and justify the staggering initial cost, particularly when the monetization path for AGI remains uncertain.

Oracle denies data center delays, considers “bring your own hardware” model

Oracle has denied a report suggesting delays for several OpenAI data centers—part of the "Stargate" venture—due to shortages in labor and materials, maintaining that all milestones remain on track. However, a related report indicated that Oracle is exploring a significant operational pivot: allowing customers to bring in their own hardware, including server chips, to its cloud data centers. This news came as the company's share price fell following the delay reports.

For developers and cloud providers, this "bring your own chip" model represents a pragmatic, high-level strategy to manage escalating capital expenditure (CapEx) and supply chain bottlenecks, particularly for high-demand GPUs. By shifting some hardware procurement responsibility to the tenant, Oracle aims to accelerate deployment timelines and reduce its financial burden. This move could reshape traditional cloud contracts and signals the extreme measures hyperscalers are taking to secure compute capacity amidst unprecedented demand.

Fermi America shares plunge as anchor tenant exits ‘Project Matador’

In a major blow to a marquee project, Fermi America's share price dropped significantly following the announcement that a prospective anchor tenant terminated a $150 million construction funding agreement for Project Matador, an 11GW data center campus in Texas. The stock price fell by about 33% on the news. The tenant’s exit occurred after the agreement’s exclusivity period expired, with no funds having been drawn.

This event is a severe wake-up call for developers relying on anchor tenant funding to de-risk and advance massive, multi-gigawatt power and data center complexes. It highlights the inherent volatility and financial fragility of projects built on speculative, forward-looking commitments in the highly competitive AI infrastructure market. For Fermi, the immediate challenge is to manage investor fallout—which has already prompted an investigation by a shareholders rights firm—while continuing lease negotiations and attempting to meet ambitious construction schedules for the complex.

Madison, WI advances one-year data center moratorium

Local resistance to data center expansion continues to build momentum, with Madison, Wisconsin, advancing a one-year moratorium on zoning permits for new facilities. This move makes Madison one of the largest U.S. cities to temporarily halt such development. The moratorium is necessitated by the city's lack of a defined 'data center' use in its current zoning code and is driven by concerns over potential strain on local energy and water resources.

From a developer’s standpoint, this action reinforces the trend of local governments using regulatory pauses to reassess the impact of power- and water-intensive AI facilities. The moratorium effectively forces developers to pause all new site scouting and permitting in the area until the city completes a comprehensive zoning overhaul. This emphasizes that successful development now requires significant and proactive community engagement to demonstrate that proposed facilities are multi-story, use closed-loop cooling, and align with the community’s vision for high-value, sustainable land use, especially in dense urban environments.

Schneider Electric’s Motivair launches new liquid cooling CDUs

In response to the extreme thermal demands of AI and High-Performance Computing (HPC) workloads, Schneider Electric’s Motivair has announced a new range of Coolant Distribution Units (CDUs) engineered specifically for optimized liquid cooling installation. These new models are purpose-built for installation in utility corridors, offering data center operators greater flexibility and integration options for high-density environments.

For data center design and engineering teams, these new CDUs—the MCDU-45 and MCDU-55—provide wider cooling capacities and support a broader range of chilled water temperatures. This enhanced flexibility is essential for adapting cooling strategies to diverse deployments, including hyperscale, colocation, and Edge sites, and for improving Power Usage Effectiveness (PUE) by enabling heat rejection systems to unlock energy efficiency. The product launch signals the ongoing race to deliver end-to-end liquid cooling solutions that can seamlessly scale with the ever-increasing power density of AI hardware.

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