AI may be booming. But it’s sprawling data centers, filled to the brim with powerful chips, that are actually training and running top AI models like Gemini, ChatGPT and Claude. These mega-scale data center projects—which underpin the AI boom and, by extension, the U.S. race against China—are changing landscapes, straining energy grids, and reshaping the economy.
In a recent feature, my colleague Sharon Goldman flew out to Arizona to Hassayampa Ranch, a 2,000-acre site 50 miles west of Phoenix. There, developer Anita Verma-Lallian is trying to bring to life a $51 million deal to build a massive data center, one backed by (among others) VC and Trump mega-donor Chamath Palihapitiya. The goal? Bring in a hyperscaler like Google, Microsoft or OpenAI.
“We have probably six to eight large hyperscalers that are interested in looking at it,” Verma-Lallian told Goldman.
As Sharon writes, these data centers aren’t just about technology, or economics—they’re also about politics, zoning rules and the environment:
In an era when AI infrastructure investment accounts for a growing share of U.S. economic growth, both Republicans and Democrats are vying to prove they can get projects built quickly—a priority that aligns with those of deep-pocketed tech and infrastructure investors who have grown and consolidated their political influence as demand for computing power has surged. For example, Palihapitiya’s All-In podcast cohost, venture capitalist David Sacks, is now Trump’s “AI and crypto czar,” helping steer federal strategy on AI competitiveness and infrastructure.
In 2025, AI data centers emerged as a political flash point, fueling heated debates and grassroots campaigns over power, water, land, and jobs. Critics, many from the left but also including populist Republicans such as Sen. Josh Hawley of Missouri and Florida Gov. Ron DeSantis, warn they are driving up electricity costs and straining scarce water supplies. Meanwhile supporters (again, from both sides of the aisle) argue they can deliver economic growth and long-sought tax revenue to struggling communities.
Tensions are coming to the fore, as Big Tech, Silicon Valley money, politics, and local communities collide. Read the whole story here.
See you tomorrow,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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VENTURE CAPITAL
- Cellares, a South San Francisco-based developer of cell therapy manufacturing technology, raised $257 million in Series D funding from BlackRock, T. Rowe Price, Baillie Gifford, Gates Frontier, and others.
- Rogo, a New York City-based AI platform designed for finance, raised $75 million in Series C funding. Sequoia Capital led the round.
- Factify, a Pittsburgh, Pa. and Tel Aviv, Israel-based developer of an intelligent document format designed to replace PDFs, raised $73 million in seed funding. Valley Capital Partners led the round.
- Gyde, an Austin, Texas-based AI-powered insurance brokerage, raised $60 million in funding. Lightspeed led the round and was joined by Optum Ventures, Crystal Venture Partners, Virtue, MVP Ventures, and others.
- Zocks, a San Francisco-based developer of an AI platform designed for financial advisors, raised $45 million in Series B funding. Lightspeed Venture Partners and QED Investors led the round and were joined by Illuminate Financial and existing investors.
- Outtake, a New York City-based agentic AI platform designed for identifying digital threats and responding to them, raised $40 million in Series B funding. ICONIQ led the round and was joined by CRV, S32, and others.
- Phia, a New York City-based platform designed to be an AI-shopping assistant, raised $35 million in Series A funding. Notable Capital led the round and was joined by Khosla Ventures and existing investor Kleiner Perkins.
- Adaptive6, a New York City and Tel Aviv, Israel-based cloud cost governance platform, raised $28 million in Series A funding. U.S. Venture Partners led the round and was joined by New Era Capital Partners, Forgepoint Capital, Pitango VC, and Vertex Ventures.
- Slice Global Equity, a New York City-based AI-powered equity compliance and management platform, raised $25 million in Series A funding. Insight Partners led the round and was joined by Fenwick and Cooley and existing investors.
- XFuel, a Dublin, Ireland-based low-carbon drop-in fuel technology company, raised $20 million in Series A funding from Audacy, Future Planet Capital, Light Ray Ventures, and others.
- Concourse, a New York City-based agentic AI platform designed for financial analysis, raised $12 million in Series A funding. Standard Capital led the round and was joined by Andreessen Horowitz, CRV, Y Combinator, angel investors.
- Datatruck, a Lombard, Ill.-based AI-powered operating system designed for long-haul trucking carriers, raised $12 million in Series A funding. Avenue Growth Partners led the round and was joined by existing investors.
- Sentra.app, a San Francisco-based enterprise general intelligence platform, raised $5 million in seed funding. a16z speedrun and Together Fund led the round and were joined by Parable, Precursor Ventures, and others.
- Carbonaide, a Joensuu, Finland-based green concrete company, raised €3.7 million ($4.4 million) in funding. Vantaan Energia, Redstone, and Ihantola Invest led the round.
- Emobi, a San Francisco-based EV charging network, raised $3.4 million in seed funding. Florida Funders led the round and was joined by existing investors Aves Ventures, Collaborative Fund, Gaingels, Gener8tor, and others.
PRIVATE EQUITY
- Premier Radiology, a portfolio company of Grovecourt Capital Partners, acquired National Radiology Solutions, a Winter Garden, Fla.-based radiology company. Financial terms were not disclosed.
- Residence, a portfolio company of Gemspring Capital, acquired OK COOL, a London, U.K.-based creative agency. Financial terms were not disclosed.
- Rover, backed by Blackstone, acquired Meowtel, a Dover, Del.-based cat sitting marketplace. Financial terms were not disclosed.
EXITS
- CVC agreed to acquire Equine Network, an Albuquerque, N.M.-based equestrian sports league, from Growth Catalyst Partners. Financial terms were not disclosed.
- Executive Equity Partners acquired Notonthehighstreet, a London, U.K.-based online gift retailer, from Great Hill Equity Partners and Burda Principal Investments.
IPOS
- Eikon Therapeutics, a Millbrae, Calif.-based drug discovery company, plans to raise up to $316.8 million in an offering of 17.6 million shares priced between $16 and $18 on the Nasdaq. Lux, Foresite Capital, The Column Group, Innovation Endeavors, Mahler International, and Catalyst4 back the company.
FUNDS + FUNDS OF FUNDS
- Basis Set Ventures, a San Francisco-based venture capital firm, raised $250 million for its fourth fund focused on AI-native companies.
