Data Center Pushback: Capital Gets Selective

Part 2 of 3 in the series Who Pays for the AI Grid.

Two weeks ago, I asked who should pay for the AI grid buildout. The answer is becoming clearer.

Regulators are shifting more risk to large-load customers

• FERC approved Duke's tariff, including a 15-year commitment tied to 75% of scheduled load.

• Indiana approved AES's plan to power a Google campus, with Google covering most, but not all, of the costs.

• Oregon paused environmental permits for new and expanding data centers through July 2027.

Meanwhile, capital markets are tightening

• CoreWeave's bonds are flashing credit warnings.

• Firmus's IPO failed. AirTrunk delayed its listing.

Having worked in both Wall Street research and utility strategic finance, I see an emerging distinction: AI demand remains strong, but capital is becoming more selective.

Hyperscalers have an advantage. Smaller, leveraged developers face a tougher financing environment. For contractors and equipment suppliers, the takeaway is backlog quality: who the customer is matters as much as how big the job is.

Strategic finance takeaway: Underwrite the counterparty, not just the megawatts.

My earlier thesis was that weaker developers (e.g., smaller, constrained balance sheets, no investment grade tenants) would feel the squeeze first. That's now playing out.

My next call: 50% odds another state pauses data center permits within six months.

Healthy discipline, or the start of an AI infrastructure credit cycle?

Background: Utility Dive

Originally posted on LinkedIn on October 15, 2026. Join the discussion on LinkedIn.