Artificial intelligence may be booming. But it’s a massive data center filled with powerful chips that are actually training and running top AI models like Gemini, ChatGPT, and Claude. These hyperscale data center projects, which underpin the artificial intelligence boom and in turn fuel U.S. competition with China, are changing the landscape, stressing the energy grid and reshaping the economy.
In a recent feature, my colleague Sharon Goldman flew to Arizona’s Hassaampa Ranch, a 2,000-acre ranch 50 miles west of Phoenix. There, developer Anita Verma-Lallian is trying to seal a $51 million deal to build a massive data center backed by the likes of VC and Trump megadonor Chamath Palihapitiya. Target? Introducing hyperscalers like this Google, Microsoft Or OpenAI.
“We probably have six to eight large hyperscalers interested in looking at it,” Verma-Lallian told Goldman Sachs.
As Sharon writes, these data centers are not just about technology or economics, but about politics, zoning rules, and the environment:
In an era when investment in artificial intelligence infrastructure accounts for a growing share of U.S. economic growth, Republicans and Democrats alike are racing to prove they can build projects quickly — a priority that aligns with those of deep-pocketed tech and infrastructure investors who have expanded and solidified their political clout as demand for computing power surges. For example, venture capitalist David Sacks, co-host of Palihapitiya’s All-In podcast, is now Trump’s “AI and cryptocurrency czar,” helping guide federal strategy on AI competitiveness and infrastructure.
In 2025, AI data centers became a political flashpoint, sparking heated debates and grassroots movements over power, water, land and jobs. Critics, mostly from the left but also including populist Republicans like Missouri Sen. Josh Hawley and Florida Gov. Ron DeSantis, warn they are driving up power costs and straining scarce water supplies. At the same time, supporters (again, from both parties) believe they can bring economic growth and long-desired tax revenue to struggling communities.
Tensions are rising as big tech companies, Silicon Valley money, politics and local communities clash. Read the entire story here.
See you tomorrow,
Ellie Garfunkel
X: @agarfinks
e-mail: alexandra.garfinkle@fortune.com
Submit a Deal for Term Sheet Newsletter here.
Joey Abrams curates the Deals section of today’s newsletter. Subscribe here.
This story was originally published on wealth network