Power & Sites · United States

Political opposition to data centers mounts in US and abroad

Credited to Semafor · semafor.com · 22h ago

Photograph · Semafor

A competitive Texas governor’s race could shape the future of one of the biggest US data center markets, as opposition to the AI buildout goes global.

Republican Gov. Greg Abbott has scrambled to revise his earlier pro-data center policies, while his Democratic opponent has pledged a stringent moratorium, which could affect about 29% of the net capacity additions planned nationally for 2028.

While roughly 300-plus state and local moratoriums are threatening the US buildout, governments’ ambitions to harness the AI boom elsewhere are also facing hurdles: The developer of a massive data center in the Australian outback scrapped its construction timeline after the regulator extended its review period, and Singapore-linked projects in Indonesia have run into stiff opposition from environmentally concerned locals.

CapitalUnited States

AI boom raises financial crisis fears among US regulators

Credited to DigiTimes$ · digitimes.com19h ago

Useful

The expanding artificial intelligence (AI) investment boom is exposing risks tied to financing and returns, with US regulators warning that a failure of AI growth expectations could trigger shocks across financial markets and the broader economy.

View the article · $DigiTimes

Front

Capital · United States

DigitalOcean sets up a $1bn share sale as its lease bill grows

Credited to Rackline · Daniel Reeves · sec.gov · 1h ago

DigitalOcean can now sell up to $1bn of new shares into the market over time through eight banks, including Goldman Sachs, J.P. Morgan and Morgan Stanley, under a prospectus supplement filed on Nov. 3. At the Nov. 2 closing price of $89.79, the full program would mean about 11.1m new shares, roughly 9.4%* of the stock outstanding at Sept. 30.

The company, which now calls itself an AI-native cloud built for inference and agent workloads, named no specific use for the money beyond general corporate purposes, including operations, growth initiatives and possible acquisitions. The banks can earn up to 2% of gross proceeds.

The supplement came out the same morning as third-quarter results and the 10-Q, and the 10-Q shows why a standing source of equity is useful. DigitalOcean is paying for more of its expansion with leases. Equipment held under finance leases rose to $758.9m at Sept. 30 from $13.3m at the end of 2025, and finance-lease and equipment-financing liabilities reached $923.6m*, up from $130.5m*.

More is lined up. On Sept. 10 DigitalOcean signed an equipment lease facility with MUFG's leasing arm, still undrawn at Sept. 30. It funds up to 90% of the cost of data-center equipment, with DigitalOcean paying the rest as prepaid rent. Commitments started at $725m and rose to $785m on Oct. 6, when the company used part of a $300m expansion option. Each drawing carries a fixed rate set at the time, 2.75 percentage points over a swap benchmark, and is paid off in full by Sept. 10, 2030.

DigitalOcean swapped debt for leases this year

Balance-sheet obligations, $m, end-2025 against Sept. 30, 2026

Dec. 31, 2025Sept. 30, 2026

Convertible notes and term loan
Dec. 31, 2025
1,317.3
Sept. 30, 2026
465.5
Finance leases and equipment financing
Dec. 31, 2025
130.5
Sept. 30, 2026
923.6
Operating leases
Dec. 31, 2025
274.9
Sept. 30, 2026
666.6

View chart data

DigitalOcean swapped debt for leases this year
Obligation	Dec. 31, 2025	Sept. 30, 2026
Convertible notes and term loan	1,317.3	465.5
Finance leases and equipment financing	130.5	923.6
Operating leases	274.9	666.6

Source: DigitalOcean Form 10-Q for the quarter ended Sept. 30, 2026Lease lines add current and long-term balances (Rackline calculation). Debt is principal outstanding.

The buildings come on longer terms. At Sept. 30, DigitalOcean had $2.96bn of signed data-center leases, mostly colocation space, that had not yet started. They begin between November 2026 and June 2028 and run 11.1 years on a weighted average. The company says it has about 180MW of committed capacity, including 20MW added for 2028.

That is a mismatch in timing. Equipment drawn on the MUFG facility must be paid off by September 2030, while the space that houses them is leased for more than a decade. Equity fills the gap without adding fixed payments, and DigitalOcean has leaned on it all year. It raised $887.9m net in a follow-on share sale, paid off its term loan and cut its 2030 convertible notes to $153.2m from $625.0m, funding the buyback with a concurrent share sale.

What debt remains is small and close. $312.3m of convertible notes fall due on Dec. 1, 2026. Cash stood at $666.1m at Sept. 30, plus $178.6m of marketable securities.

Demand is what the leases are betting on. Third-quarter revenue rose 40% to $321m, and remaining performance obligations reached $800m, against $61m a year earlier. The share program gives DigitalOcean a way to fund its part of that build-out with equity rather than more borrowing.

* Rackline estimate, calculated from DigitalOcean's Nov. 3, 2026 prospectus supplement and 10-Q: 11,137,097 shares over 117,920,731 outstanding at Sept. 30; liabilities sum current and long-term finance-lease and equipment-financing balances.