Key Constraints That Could Derail The Data Center Buildout Story

 The data center investment macro story centers on hyperscalers such as Microsoft, Alphabet, Meta, and Amazon Web Services, whose massive cloud computing services are becoming the backbone for AI workloads, including ChatGPT and others. However, as we've previously noted, the data center buildout has run into supply-chain snarls, including memory chip shortages, power-grid constraints, and even a shortage of turbine blades for natural-gas generators.

The data center boom powering the AI revolution is certaintly impressive to watch unfold, but it won't be a straight line from here as the US attempts to hold the number one spot in the global AI race. Challenges are mounting, and the latest coverage on this comes from a conversation Goldman analyst Brian Singer had with Mark Monroe, a former principal engineer in Microsoft's Datacenter Advanced Development Group, who warned that data center buildouts face three major headwinds.

Here's a recap of the conversation between Singer and Monroe, which focused on three key constraints: power, water, and labor.

1. Energy: Power remains the most critical near-term constraint for data center deployment, while flexible load management and Behind-the-Meter solutions could help close the power gap. While cloud and AI inference workloads generally require proximity to end-users -- creating power shortages in these congested markets -- AI training workloads are location-agnostic and migrating to remote areas with available power. Grid conditioning or flexible load management for data centers during peak electricity consumption could unlock significant capacity. A Duke University study suggested that 76 GW of new load (10% of US aggregate peak demand) could be integrated if data centers accepted average annual load curtailment of 0.25% (99.75% up time) and 98 GW added for curtailment of 0.5% (99.5% up time). While this could potentially unlock ~100 GW of capacity, Mr. Monroe notes that adoption: (a) is hindered by the industry's inherent risk aversion of cycling IT equipment off and on; and (b) may require stronger financial or regulatory incentives.

Behind-the-Meter power is a costly and likely temporary bridge to initial grid gaps. While a single digit percentage of data centers in the pipeline have BTM requests, Mr. Monroe highlighted this can still be significant for power demand given these are typically larger data centers. Primarily deploying natural gas simple cycle generators, onsite power solutions cost 5x-20x more than grid power. However, Mr. Monroe highlighted that deploying BTM solutions to push forward data center startups can be an economically viable choice given the immense profitability of large scale AI data centers. According to Mr. Monroe, data centers deploying BTM power ultimately aim to connect to the grid eventually over three years, while either relocating to other data centers, integrating and selling power back into the grid, or retiring BTM assets.

2. Water: Community, regulatory and chip advancement pressures likely to shift the industry towards more water-efficient cooling technologies coming at significant energy costs. The industry is seeing a shift from the traditional water-intensive evaporative approaches towards more waterless designs, especially among hyperscalers, as community, regulatory and technological pressure mounts. According to Mr. Monroe, the shift towards closed-loop and waterless cooling systems is likely to raise Power Usage Effectiveness (PUE) from best-in-class levels of 1.08 to 1.35-1.40, representing a 35%-40% energy overhead versus 8% in evaporative systems. Although innovations such as direct-to-chip liquid cooling and higher-temperature water cooling could enable more efficient heat transfer in more geographic locations, co-location data centers are likely to remain committed to chiller-based designs given their diverse customer base and need to commit to cooling architecture early in construction. Regardless of any diminishing share of overall data center cooling solutions, according to Mr. Monroe the demand for chillers is expected to continue to see a material increase over the next decade, driven by overall growth in data center capacity.

3. Labor: Skilled labor shortage could become the next gating factor for data center deployment. Data centers are differentiated from generic industrial buildings by the specialized electrical and mechanical systems required, making electricians and pipefitters critical to the continued data center build out. According to Mr. Monroe, the skilled labor shortage represents the next major constraint after power. Industry organizations, in collaboration with technical universities and colleges, are actively developing training programs to address this gap, while attempting to reach students as early as middle school to make skilled trades more attractive career paths. We estimate the US will require >500,000 net new workers across manufacturing, construction, ops & maintenance, and transmission and distribution to deploy all the power to meet demand by 2030.

Related coverage:

• Goldman Warns DRAM Shortage Not The Only Bottleneck In AI Data Center Buildouts

• Goldman: Local Resistance Against Data Centers "Are Not Slowing Development"

• Behind The $500 Billion Data Center Boom: Here's Who Makes All The Key Components

Looking ahead, the key question is whether the U.S. can sustain a largely uninterrupted surge in data center capex, given how much these buildouts are now embedded in both the macro narrative and tech valuations. The investment thesis assumes that continued buildout translates into measurable productivity gains and, in turn, a multi-year uplift in growth. Overall, the execution risk boils down to critical inputs and infrastructure, including core components, grid access, and related supply chain bottlenecks, which could slow buildouts and stymie overly optimistic expectations.

To bypass these ground-based constraints, that's why the narrative of data centers in space has emerged.

https://www.zerohedge.com/ai/three-key-constraints-could-derail-data-center-buildout-story

Healthcare billing fraud: 10 recent cases

 From an Ohio physician sentenced to prison for his role in a $14.5 million scheme to a Washington health system agreeing to pay $3.7 million to settle medically unnecessary surgery allegations, here are 10 healthcare billing fraud stories Becker’s has reported since Jan. 14: 

1. The owner and a senior executive of Vivature, a healthcare billing company, pleaded guilty to their roles in a multimillion-dollar fraud scheme.

2. Timothy Doyle, of Selden, N.Y., was sentenced to 14 months in prison for conspiring to offer and pay kickbacks to physicians in exchange for ordering medically unnecessary brain scans. 

3. Montana clawed back more than $23 million in fraudulent claims after PacificSource flagged more than 200 suspicious ACA enrollments tied to as much as $54.7 million in unjustified claims.

4. Tacoma, Wash.-based MultiCare Health System agreed to pay more than $3.7 million to resolve allegations that it fraudulently billed government and commercial insurers for spine surgeries performed by former neurosurgeon Jason Dreyer, DO.

5. A Wisconsin durable medical equipment company owner was sentenced to 18 months in prison for conspiracy to pay healthcare kickbacks to physicians. 

6. A Florida lab owner pleaded guilty for his role in a scheme that defrauded Medicare by submitting over $52 million in false and fraudulent claims for genetic testing and paying for physician’s orders. 

7. A former Indiana physician agreed to pay $1.7 million to settle allegations by the Department of Justice that he submitted fraudulent claims to the state Medicaid program.

8. Oakland, Calif.-based Kaiser Permanente agreed to pay $556 million to resolve allegations that it violated the False Claims Act by submitting invalid diagnosis codes for Medicare Advantage enrollees to obtain higher payments from the federal government.

9. A North Ridgeville, Ohio, physician was sentenced to 64 months in prison for his role in a healthcare fraud scheme involving more than $14.5 million in false Medicare claims.

10. A McAllen, Texas-based physician and a clinic employee were sentenced for their roles in a kickback scheme that resulted in more than $3.1 million in Medicare losses. 

https://www.beckershospitalreview.com/legal-regulatory-issues/healthcare-billing-fraud-10-recent-cases-37/

Texas sues Children’s Health System, physician over gender care for minors

 Texas Attorney General Ken Paxton has filed a lawsuit against Children’s Health System of Texas, claiming the Dallas-based system violated a state law banning the provision of gender transition-related care to minors and engaged in fraudulent practices to obtain Medicaid reimbursements.

The lawsuit also names Jason Jarin, MD, a Dallas-based pediatric gynecologist, as a defendant, making him the fourth physician to face legal action since SB 14 — which prohibits surgeries, puberty blockers and hormone therapies for minors — took effect in September 2023.

The complaint alleges Children’s Health and Dr. Jarin continued providing gender transition-related care to minors after the law took effect and billed Texas Medicaid for hormone therapies and puberty blockers. The attorney general’s office also alleges the defendants misrepresented medical records, prescriptions and billing documents to obtain payment for gender-related care provided to children.

The state is seeking to block Children’s Health and Dr. Jarin from continuing the treatments and to recover more than $1 million, including Medicaid funds it claims were improperly paid, civil penalties and other damages allowed under Texas law. 

In a statement, Children’s Health said it complies with healthcare laws and declined further comment.

“Our top priority is the health and well-being of the patients and families we serve,” the health system said. “We comply with all applicable local, state and federal healthcare laws. Due to ongoing legal proceedings, we are unable to comment further at this time.”

In 2024, Mr. Paxton’s office filed similar lawsuits against three other physicians claiming violations of SB 14. The attorney general later dropped one of those cases —  filed against Hector Granado, MD, an El Paso-based physician — after determining no legal violations were found, according to The Associated Press.

https://www.beckershospitalreview.com/legal-regulatory-issues/texas-sues-childrens-health-system-physician-over-gender-care-for-minors/

Iran issues alert over rocket launches

 Iran issued a notice to air missions (NOTAM) within areas across its southern regions, the United States Federal Aviation Administration website showed on Wednesday.

The notice to airmen added that the country plans rocket launches in areas across its south on Thursday, February 19, from 3:30 GMT to 13:30 GMT.

https://breakingthenews.net/Article/Iran-issues-alert-over-rocket-launches/65701183

US said to withdraw all troops from Syria: WSJ

 United States officials said Washington is moving toward a full military exit from Syria, with plans underway to pull out roughly 1,000 troops over the coming weeks, the Wall Street Journal reported on Wednesday.

People familiar with the matter said US forces have already pulled out of key bases, including Al Tanf and Al Shaddadi, with remaining troops expected to leave over the next two months. US officials said the drawdown does not affect Washington's ability to respond to threats from the Islamic State.

The move comes as the administration of US President Donald Trump seeks to strengthen diplomatic ties with Syria's new leadership following the collapse of Kurdish-led control and a fragile ceasefire with Damascus-backed forces.

https://breakingthenews.net/Article/US-said-to-withdraw-all-troops-from-Syria/65701272

Bhattacharya to become acting CDC director

 National Institutes of Health head Dr. Jay Bhattacharya will serve as acting director of the Centers for Disease Control and Prevention, the White House told Politico.

Secretary of Health and Human Services Robert F. Kennedy Jr. ousted CDC Director Jim O'Neill last week as part of a large-scale shakeup at HHS. President Donald Trump plans to name O'Neill as head of the National Science Foundation.

Bhattacharya rose to prominence as a critic of COVID-19 mask mandates and lockdowns. Trump tapped him to lead the NIH in 2025.

https://justthenews.com/politics-policy/jay-bhattacharya-become-acting-cdc-director

Virtually All Countries Support Voter Photo ID – So Why the Filibuster?

 by John R. Lott Jr.

“The bottom line is this: voter ID is not controversial in this country,” Harry Enten, the chief data analyst for CNN, recently reported. Nor is it controversial in virtually any other country in the world. Yet despite massive support among both Democrats (71%) and Republicans (95%), only one Democratic member of the House and one in the Senate are supporting the SAVE Act. Unless seven more of the 47 Senate Democrats step forward, their filibuster will kill the bill.

Democrats argue that requiring free voter photo IDs – even when the ID itself costs nothing – harms eligible voters by creating practical barriers to casting a ballot. They contend that blacks would be especially hard hit. Interestingly, every country in Africa requires government-issued identification to vote.

They also argue that such requirements would disenfranchise Hispanic voters. Yet Mexico, all twelve South American countries, and Spain require government-issued photo IDs to vote.

All of these countries have lower per-capita incomes than the United States. If citizens in those nations can obtain the necessary identification to vote, why would American Hispanics and blacks be unable to do the same?

While 83% of American adults support requiring government-issued photo identification to vote, support is also strong among the very groups Democrats claim would be harmed: 82% of Hispanics and 76% of black Americans favor the requirement. Those figures suggest that most black and Hispanic Americans do not view obtaining a photo ID as the obstacle Democrats describe. Ten U.S. states have similarly strong photo ID requirements.

Democrats claim that women are disproportionately disenfranchised by voter IDs, but women are also strongly supportive of IDs and have exactly the same level of support as men.

Democrats argue that voter ID requirements disproportionately disenfranchise people with the least education and lowest incomes. Yet, ironically, survey results show that voters who did not graduate from high school were 27 percentage points more likely to support photo voter ID laws than those who attended graduate school. Similarly, individuals earning less than $30,000 per year were seven percentage points more likely to support photo ID requirements than those earning over $200,000 annually. The well-educated and higher-income individuals thus express more concern about the impact of ID laws on the less educated and lower-income groups than those groups express themselves.

But it isn’t just South American countries and all of Africa that require voter IDs to vote. Both of our neighbors, Canada and Mexico, require them, with Mexico also requiring a thumbprint. All 47 European countries, except parts of the United Kingdom, require a government-issued photo ID .

After widespread vote fraud, Mexico enacted major voting reforms in 1991. The government mandated voter photo IDs with biometric information, banned absentee ballots, and required in-person voter registration. Even though these changes made registration more difficult and eliminated absentee voting, turnout increased after the reforms took effect. In the three presidential elections following the 1991 changes, an average of 68% of eligible citizens voted, compared with 59% in the three elections before the reforms. As confidence in the electoral process grew, more citizens chose to participate.

Many countries in Europe and beyond have learned the hard way that fraud can result from looser voting regimes – and they have instituted stricter voting measures in direct response to it.

In Northern Ireland, where a bitter sectarian conflict fuels hardball electoral tactics, parties on all sides have engaged in what observers describe as “widespread and systemic“ voter fraud. Both Conservative and Labour governments enacted reforms to curb it. In 1985, under the conservative Margaret Thatcher, the U.K. began requiring voters to show identification before receiving a ballot, but that measure did not solve the problem. In 1998, a Select Committee on Northern Ireland reported that people could “easily forge” medical cards – accepted as ID under the 1985 law – or obtain them fraudulently, enabling non-existent individuals to cast votes.

By 2002, the Labour government strengthened voter identification cards to make them far harder to forge and used the more secure IDs, along with additional rules, to stop people from registering multiple times. These anti-fraud measures immediately reduced total registrations by 11%, suggesting to Labour how extensive earlier fraud had been.

A study of vote fraud in Northern Ireland before the 2002 reforms interviewed Brendan Hughes, the former IRA Belfast commander. Hughes described how he operated a fleet of taxis to transport fraudulent voters from one polling station to another. He said they dressed volunteers in wigs, different clothes, and glasses, and noted that this practice continued for decades. He added that they typically used young women for voter impersonation because officials were more likely to let them vote if any doubt arose.

A 2002 survey of Northern Ireland by the U.K. Electoral Commission, conducted after the rules passed but before they went into effect, found that by a 64% to 10% margin, voters thought that vote “fraud in some areas is enough to change the election results.”

“I support the SAVE America Act because I believe in a fundamental principle: American citizens should decide American elections,” Henry Cuellar, the one House Democrat voting for the bill, noted. “That principle strengthens our democracy and protects the value of every vote.” There are currently seven states that require proof of citizenship just as required in the SAVE Act (e.g., birth certificate, passport, tribal documents, naturalization papers). Sen. John Fetterman, the only Democrat in the Senate to speak out favorably for the bill, said requiring voters to show identification is not “unreasonable.”

But Democrats follow the line of Senate Minority Leader Chuck Schumer, who claims “The SAVE Act would impose Jim Crow style restrictions on voting.”

If banning voter IDs is a hallmark of democracy, Democrats will need to start castigating virtually all the other countries in the world as anti-democratic nations.

John R. Lott Jr. is president of the Crime Prevention Research Center. He served as the senior advisor for research and statistics in the Office of Justice Programs and the Office of Legal Policy in the U.S. Department of Justice during 2020-21.

https://www.realclearpolitics.com/articles/2026/02/17/virtually_all_countries_support_voter_photo_id__so_why_the_filibuster.html