US data center expansion faces supply and land challenges

The rapid expansion of data center infrastructure driven by the artificial intelligence boom is encountering significant operational and regulatory hurdles. Industry research indicates that between 30% and 50% of the 16 gigawatts of scheduled U.S. data center capacity are facing severe delays or cancellations. These bottlenecks have shifted from semiconductor shortages to industrial supply chain limitations and utility grid capacity constraints.

As AI-focused facilities grow in size and energy intensity, developers are increasingly seeking to utilize public lands. An analysis by the Center for Western Priorities identifies at least 35 active or pending applications before the Bureau of Land Management, covering more than 24,000 acres across Arizona, Idaho, Nevada, Oregon, Utah, and Wyoming. Notable proposals include nuclear-powered facility plans by Valar Atomics in Utah and multiple right-of-way applications by Copia Power.

While a 2025 executive order aimed to accelerate permitting for large-scale data centers, the movement faces growing local and environmental opposition. Some projects, such as an 88.5-acre facility in Nevada, have already been returned for additional environmental reviews following appeals.