AI data center tenants demand penalties over $5M for delays

The Information: The Information is a subscription-based digital news outlet specializing in in-depth coverage of technology, business, startups, and Silicon Valley. It published a report on escalating penalty demands from AI data center tenants for delays in power and facility delivery by developers. • AI data-center demand is expanding faster than grid and construction capacity, with U.S. power demand forecast to rise from 31 GW in 2025 to 66 GW in 2027. • Grid interconnections can take five to seven years, versus roughly 12–24 months to construct a facility, creating a major timing mismatch. • Goldman Sachs expects only about 50–60% of capacity scheduled for the next one to two years to come online on time. • Delays reflect power shortages, permitting, transformers, labor, and supply-chain constraints rather than weak AI demand alone. • Daily penalties above $5 million materially increase contractual downside for developers and raise the value of secured power, permits, and turnkey capacity. • The headline is most relevant to AI infrastructure economics and listed data-center, utility, power-equipment, and real-estate operators.