There’s a hot new type of power hitting the data center market: “braggawatts.” It’s a term for when developers overplay their ability to secure power — even if they haven’t fully lined up the permits, interconnection, or financing.
“There’s just so much noise out there,” said Chris Sharp, CTO of data center developer and operator Digital Reality, speaking recently on Catalyst with host Shayle Kann. “The amount of power, and even the amount of financing required to meet these upper end projections, it doesn’t exist.”
Developers and other players in the market may overplay their ability to deliver power to impress investors or else to signal market dominance. They may also file oversized interconnection requests to secure a place in the queue. It’s a hedge, even if they’re phantom requests that don’t represent real load.
But the hype makes it difficult to distinguish between speculative and shovel-ready projects — and also makes it hard for power providers to know how to plan.
In response, Sharp said that utilities are becoming more discerning, looking for customers and developers that make realistic requests and actually use the capacity they ask for. They’re not “chasing noise because nobody wants to invest in a bubble,” he said.
It’s not just developers inflating numbers; the noise is on the customer side, too. Sharp predicted there will be “very big challenges and failures” when customers overestimate their peak needs and ultimately underutilize infrastructure. Utilities need “a level of comfort that you’ll take and utilize that infrastructure they brought to market,” he added.
Listen to Chris Sharp’s whole interview on Catalyst:
The paradox is that all this noise in the market may obscure real demand.
“ Two things can be true at the same time,” said host Shayle Kann, partner at Energy Impact Partners, speaking to Sharp. “There can be explosive, actual demand growth for compute, leading to actual need for lots of gigawatts of new data centers. And also it can be true that the volume of data centers in development — and certainly the volume of load interconnection requests going to utilities — is like an order of magnitude more than is actually gonna happen.”
Solving for peak
One of the biggest constraints in data center development is power availability: not just a lack of total megawatts, but rather not enough megawatts in the right places.
For AI inference, proximity to other infrastructure, or what Sharp calls “data gravity,” is critical. New infrastructure needs to be close to central business districts to reduce latency and meet throughput requirements.
“The amount of data that’s required for delivering kind of an inference type of solution is something that is proximate not only to the consumer, but proximate to an ecosystem,” Sharp said.
While training models can run in remote areas, he explained that AI inference needs to be close to users, data, and other models. These needs become more acute as inference requests grow more complex, with a single prompt running through multiple models.
And like the power grid itself, data center planners must build for the peak demand expected at any given time. Sharp said this requires collaborative, long-term planning with utilities and power providers. Many inference customers want large contiguous infrastructure — for example, a 100-megawatt data hall that they can “densify” capacity incrementally in five-MW blocks of GPUs and scaleup as needed.
“A critical element of that is working with a utility operator so that they know that, when we say we’re gonna need a gigawatt,” he said, “they have an understanding of that power requirement.”
But that large contiguous infrastructure is becoming harder to site, especially when phantom requests clog the queue, load growth strains grid capacity, and permitting regulations complicate construction plans. And given these uncertainties in the market, some data center companies are tapping the breaks.
In March, Alibaba’s chairman Joe Tsai said he was starting to see “the beginning of some kind of bubble” in data center construction. In April, Microsoft said it was pausing the construction of data centers in New Albany, Ohio. That same month, PYMNTS reported on Wells Fargo research that found that Amazon Web Services “‘paused a portion of its leading discussions’ on colocated data centers, particularly those abroad.” In May, fossil gas microgrid developer Enchanted Rock also said in a blog post that the data center boom would not bust, but would “pause.”
