(Psst…..The A+ Students Plugged In Early)

There is an old real estate adage that has been used so many times it has almost lost its meaning: location, location, location. But in the data center world of 2026, that phrase deserves a meaningful update: power, power, power.

We have spent considerable time in this blog discussing the NIMBY headwinds battering data center development – the moratoriums, the withdrawn permits, the 42 activist groups now camped out in Northern Virginia. The resistance is real and, if anything, is intensifying. But something important has emerged from all of this friction: a very clear two-tiered market. On one side are those data centers still searching for power. On the other are those who had the foresight (fortune?) to anchor with it years ago.  

AWS alone added 3.9 GW of new power capacity in 2025 and has publicly committed to doubling its total capacity by end of 2027. Amazon CEO Andy Jassy acknowledged in his Letter to Shareholders that AWS “could be growing even faster” if not for capacity constraints yielding what he described as unserved demand.  

Against that backdrop, the data center operators who quietly locked in power purchase agreements with a utilities years ago are  extremely well-positioned. Power interconnection queues in many markets now stretch five to seven years. You cannot simply write a check and fix this. The queue is the queue.

To be fair, there are those dreaming  (quite literally!) beyond the grid altogether. Both SpaceX and Amazon have been increasingly vocal about orbital data centers. One of the main parts of this thesis is no reliance on the grid or being at the mercy of the utility interconnection queue. It is a compelling vision. The physics, latency challenges and launch economics suggest this remains a longer-horizon opportunity rather than a near-term fix for hyperscalers who need power on the ground today.

This dynamic is reshaping how sophisticated capital is evaluating the sector. We have long talked about the “moat” around the data center business. Capital, land and interconnection were the traditional sharks in that moat’s water. Power access has now swum to the front of the tank. Investors are increasingly differentiating – and rewarding – those platforms which can demonstrate contracted, deliverable power.

The operators best positioned today share a few common characteristics. First, they built relationships with utilities early, well before AI demand made power negotiations adversarial. Second, many had the strategic patience to site in markets that were less glamorous but ‘grid-friendly.’ Third, and perhaps most importantly, they treated power not as a cost line to be minimized but as a strategic asset to be secured.

There is an important lesson here from a parallel we have discussed before. For those that are as old as me (!!) and very much remember when the tower companies faced their own NIMBY battles in the late 1990s, the winners weren’t the ones who fought the hardest in the courts. They were the ones who had quietly assembled the right portfolios of locations before the fight got expensive. The data center story of today rhymes.

The winners in this environment will be determined by who has electrons waiting when the servers arrive.  

Power is not the long pole in the tent anymore. It is the tent.