Reality bytes: the US data centre pipeline additions halved in Q4 2025 compared to the previous quarter

In Wood Mackenzie’s quarterly analysis of the US data centre market, spanning projects with disclosure, permitting, construction or commissioning activity since January 2023, our analysts have reviewed the market’s momentum leaving 2025. 

Fill in the form on this page to download your complimentary extract from the report, and read on for a quick overview: 

Planned capacity additions halve on the quarter in Q4 2025 

US data-centre capacity additions halved from Q3 to Q4 2025 as load-queue challenges persisted. The decline underscores the difficulties of the current development environment and signals a resulting focus on existing pipeline projects. 

While Texas extended its pipeline capacity lead in Q4 2025, New Mexico, Indiana and Wyoming saw greater relative growth. Planned capacity continues to be weighted by new developers with a small number of massive, speculative projects, targeting in particular the South and Southwest. New Mexico owes its growth to a single, massive, speculative project by New Era Energy & Digital in Lea County. 

The traditional markets of Texas, Virginia and Georgia led when it came to capacity under development. Greenfield markets Wyoming and New Mexico are targets for massive campuses as a result of their natural gas availability, but only initial phases are under development. Some 80 GW of capacity is planned in Texas, far more than in Virginia. However, a significant share of this is speculative, based on future behind-the-meter (BTM) gas capacity and investor buy-in, resulting in a far more comparable amount of development capacity. 

Capex growth set to slow in 2026 

Disclosed capex associated with specific projects reached US$948 billion in Q4 2025, 15% of it tied to developers that had not been disclosed. We expect capex growth from the largest developers, including the established hyperscalers, to slow in 2026 for the first time since 2023, to US$94 billion, or 58% of last year’s growth.  

Planned capex remains skewed towards large, speculative projects. Around 2% of planned projects are worth over US$17 billion, accounting for more than a third of all planned capex, while 57% of projects are worth less than US$1 billion, accounting for just 7%. 

Per-MW costs in Q4 2025 were down from the highs of Q3. Economies of scale continue to hold, with smaller developers disclosing higher per-MW costs than larger developers. Even as costs per MW declined, however, rack power densification caused the cost per square foot to rise.  

Energy – PJM is still in trouble 

Large-load capacity that has signed construction or electricity supply agreements reached 183 GW, or 22% of 2025 US peak load. 

Utilities in ERCOT and PJM are responsible for 72% of large-load capacity commitments, with a majority of committed load (58%) contracted with wires-only utilities, which have no responsibility to ensure adequate supply. 

PJM remains in trouble, with utility large-load commitments three times as large as the accredited capacity in its risked generation queue, including pre- and post-interim service agreement (ISA) projects. Even with elevated capacity prices, long-term contracting would be required to incentivise the entry of new generation, particularly gas. 

Texas’ planned data-centre capacity with onsite generation is four times that of any other state. In PJM states Pennsylvania and Virginia, the lion’s share of onsite generation will be grid-tied, while onsite generation in states such as Texas, Wyoming and New Mexico will be invisible to the grid, if not fully off-grid. There are compelling reasons to be cautious on the seeming trend towards BTM supply, however, with established hyperscalers retaining a strong preference for grid power. 

Policy riddled with known unknowns 

New data-centre policy proposals are scrambling success criteria for developers, prizing state relationships for generators and strong balance sheets as well as power expertise for data centres. 

PJM, the White House and the governors of the states involved are aligned on market reforms, but key unknowns remain about an upcoming backstop auction. 

New interconnection rules in SPP and proposed rules in ERCOT pose operational risks to data centres, particularly voltage ride-through requirements and exposure to frequent curtailment. NERC is working towards a national standard for ride-through, which would make compliance a US-wide challenge. 

Learn more 

The above themes and more were discussed recently at our presentation at the DTECH 2026 event; the leading transmission and distribution event in the US. 

To find out more and receive a complimentary selection of slides from our quarterly report, simply fill in the form at the top of this page.  

Plus, sign up for DTECH’s upcoming Data Centers & AI event, taking place in Scottsdale, AZ on May 12th-14th 2026; where Wood Mackenzie is proud to be joining some of the brightest minds in the energy industry to discuss the US data center and AI landscape in even greater detail.