Despite concerns over how data centers may hurt your wallet, don’t expect a new data center to open near you anytime soon.
Data center development is slowing down, according to a new report from energy analytics firm Wood Mackenzie. In Q4 2025, developers only added 25 gigawatts of electricity capacity to their project pipeline, half of what was added the previous quarter.
The slowdown is a sign that endless data center growth projections to power AI technology may not materialize. As gas and power companies grapple with the economics of building new power plants or expanding their grids, growth remains limited to how much power is currently available.
“Utilities just don’t necessarily have either the grid capacity or the generating capacity to be able to build it fast enough to accommodate these new large energy demand centers,” Wood Mackenzie analyst Ben Hertz-Shargel told Fortune. The U.S. has not needed to rapidly expand electricity generation in a long time, which makes it difficult to match the pace of tech companies’ ambition, he explained.
This is shifting how companies approach their plans for data centers.
