Why The Data Center Boom May Be Digging In The Wrong Dirt

InnovationAIWhy The Data Center Boom May Be Digging In The Wrong DirtByCraig S. Smith,Contributor.Forbes contributors publish independent expert analyses and insights. Craig S. Smith, Eye on AI host and former NYT writer, covers AI.Follow AuthorMay 14, 2026, 04:21pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.business man engeneer in modern datacenter server roomgettyThe numbers are staggering: The five largest American cloud providers have committed between $650 billion and $700 billion to build data centers in 2026 alone, nearly double their 2025 levels. Television’s Shark Tank investor Kevin O'Leary is planning a data center complex in Utah that would cover more than twice the area of Manhattan and consume as much electricity as Utah and Nevada currently do combined.Yet even some AI insiders are beginning to question whether the industry is building for a future that may never fully arrive. In a recent interview about decentralized AI infrastructure, Tether CEO Paolo Ardoino argued that “it’s not at all clear that the compute paradigm that we’re currently operating under is going to continue, in which case maybe you don’t need all those data centers.”The industry is committing capital at levels that assume not just sustained growth, but exponential increases lasting years into the future. If sheer scale were proof of sound strategy, this would be the most rational building program in American history. But it isn't.Construction Is Already StallingDespite the headline commitments, many U.S. data centers announced for 2026 have been delayed or canceled outright, according to Bloomberg and other news outlets. The reason isn’t wavering demand; it’s that the physical prerequisites for a functioning data center simply aren’t available in the markets where most of them are planned. Meanwhile, the wait to connect power-hungry data centers to the U.S. power grid is measured in years, no...