When we launched “This Week in Hyperscaling” two months ago, it was a bit of an experiment. Meguire Whitney has provided our electric utility clients with issue-specific news roundups in the past, but as we dove deeper into the role AI will play in the energy sector, we recognized an opportunity to provide news and insights to a broader audience—one that includes policymakers and staff as well as energy industry professionals.

And while we’re not a news organization (we’re a government relations firm), there’s certainly a lot to monitor, including data center deals, energy policy shifts, and the overall landscape supporting AI infrastructure. We’re also increasingly involved in energy policy matters with some relationship to data center buildout. So, since we’re absorbing and responding to these opportunities anyway, dear reader, we’d love to know: how can we share what we’re seeing in a way that’s most valuable to you?

We truly appreciate your attention in this content-saturated world.

Big News:

• Lots and lots of coverage of the Big Beautiful Bill’s preemption of state AI regulation. Our take: this policy proposal doesn’t pass muster under the Senate’s Byrd rule, which requires every provision of a Reconciliation bill to be budgetary in nature.

• There’s a growing disconnect between the military budget for AI and that of the rest of the federal government, Politico’s Mohar Chatterjee observes after attending DC’s AI+ Expo this week. While defense applications are booming, other agencies are wary of DOGE cuts and personnel cutbacks. (“AI Companies Pitch Washington as Cuts Roil Federal Landscape,” Politico)

Big Deals:

• Meta has announced a deal with Constellation Energy to sustain an Illinois nuclear plant through relicensing, instead of retiring in 2027 as planned. The move follows last week’s investment in a pair of long-term power purchase agreements for solar power to support three new data center locations in the Southwest Power Pool footprint. (“Meta Goes Nuclear to Power AI with Clean Electrons,” Axios; “Meta Commits to 650-MW PPA for AES Solar in Southwest Power Pool,” Energy Tech)

• The Department of Energy’s next exascale supercomputer will incorporate AI using an Nvidia chip called “Rubin.” The new model will be able to train AI models, design weapons, model fusion reactors, and more. (“Energy Dept. Unveils Supercomputer That Merges With A.I.,” New York Times)

  

Rubin chips are shown in a Nvidia Kyber rack, courtesy Mike Kai Chen for The New York Times

Big Ideas:

• Are you a utility that needs more generation right away? Why not buy another utility! Politico highlights several recent mergers and acquisitions driven by the need for new generation to serve data centers, but some customers are bound to be caught without a seat when the music stops. (“How the AI Rush is Reshaping Electric Utilities,” Politico)

• Are you a hyperscaler who’s sick of the utility model? Bypass it entirely with new startup GridFree AI! Former Microsoft and Talen execs introduced a “power foundry” model integrating cooling systems with natural gas and batteries to power data centers more efficiently than the grid. (So they say.) (“Natural Gas, Energy Storage at Heart of New Group's Data Center Power Concept,” Power Magazine)

Big Challenges:

• Some states can’t attract data centers while others don’t want them. As Congress debates whether to preempt state AI laws, legislatures are grappling with ways to draw data center development and manage it once it arrives. (“States Roll Out Red Carpets for Data Centers. But Some Lawmakers Push Back,” Politico)

• Emissions from gas-powered data centers still disproportionately burden disadvantaged communities, and the local NAACP in Memphis is pushing back with a call for xAI’s operations to be suspended. (“NAACP Calls on Memphis Officials to Halt Operations at xAI’s ‘Dirty Data Center’,” TechCrunch)

Big Questions:

• After Budget Reconciliation, is permitting reform a possibility? Semafor’s Tim McDonnell argues that streamlining federal approvals is more important than maintaining clean energy tax credits, but Reconciliation is scorching the earth as far as bipartisan efforts are concerned. (“Tax Credit Cuts Could Spoil an Even More Important Clean Energy Goal,” Semafor)

That’s all for this week! We love keeping this a short read but can’t wait to hear what you’d like us to plus up. Thanks for reading, and don’t forget to subscribe and share!

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