Developers added 36 GW of new data center capacity to the US pipeline in Q1 2026, marking a 19% drop from the previous quarter, according to a new analysis from Wood Mackenzie released in the firm's US data center pipeline Q2 report. Established developers are now turning their attention to advancing their existing project portfolios as the development and regulatory landscape grows more difficult, the report finds. Total disclosed US data center capacity has reached 331 GW, with roughly 40% currently moving through active development phases.
The Q1 2026 additions represent the third straight quarter of slowing growth, extending a deceleration that began after quarterly additions peaked above 60 GW in Q3 2025 before declining in Q4 2025 and falling further in the first quarter of this year. Texas now leads all states in cumulative planned capacity at nearly 100 GW, while Ohio holds the second-largest market position. Although 53% of projects have cleared permitting stages, this group accounts for just 32% of total pipeline capacity, revealing a significant gap between the number of projects and their actual scale. Large load capacity backed by signed construction or electricity supply agreements has climbed to 195 GW, equal to 26% of 2025 US peak load. Advanced discussion phases surged from 37 GW in Q4 2025 to 107 GW in Q1 2026, signaling that early-stage projects are moving closer to signed commitments, while uncommitted capacity rose substantially in the quarter, driven primarily by utilities in ERCOT.
Disclosed capital expenditure associated with specific projects crossed the $1 trillion mark in Q1 2026, though the figure is heavily weighted by a small number of large, speculative developments, with just 6% of projects accounting for 42% of total capex. "Established data centre developers continue to shift their focus to the maturation of their existing pipelines in the face of an increasingly challenging development and regulatory environment," said Caitlin Connelly, senior analyst at Wood Mackenzie. New entrants targeting gas supply and land access are focusing on states like Texas and Utah, but only a small portion of those projects have moved into active development, the report notes. Per-megawatt costs declined in Q1 2026, continuing the reversal from H2 2025 highs, while average building square footage is rising even as overall campus square footage declines, pointing to an industry shift toward fewer, larger, and more capital-intensive facilities.
The composition of utility commitments varies sharply by region, creating uneven risk exposure across the country, according to the analysis. In PJM, over a third of the utility commitment pipeline is classified as high confidence, while in ERCOT, 86% of commitments remain speculative or in early-stage study phases, leaving PJM most vulnerable to the risk of large load pipelines exceeding what its reliable generation queue can support. A growing number of pipeline projects are disclosing around-the-meter generation strategies, with the trend most pronounced in Texas, where strong gas supply, faster permitting timelines, and a robust renewables market create favorable conditions. Across disclosed around-the-meter deployments, gas accounts for 40% of projects and 48% of total site capacity, while renewables and storage represent 41% of deployments and 38% of capacity.
The regulatory environment for data center development is becoming increasingly complex and varies significantly by region, forcing companies to choose between speed-to-power and firm power as interruptible service options are deployed, Connelly noted. Policymakers tend to view firm service as unnecessary friction to interconnection, and fast-track capacity interconnection frameworks seek to bring new generation online quickly ahead of a supply crunch, the report states. It remains uncertain whether policy developments will help or hinder demand growth as policymakers attempt to balance the often-competing priorities of affordability and speed to power.