Hyperscalers face local pushback over data center water and power costs
The Wall Street Journal’s Morning Risk Report on October 16 identified the lack of available insurance for artificial-intelligence companies as “the next big obstacle” facing the fast-growing industry, citing what it described as a string of AI safety incidents exposing a “gaping hole” in coverage.
The newsletter, written by WSJ reporter Richard Vanderford, opened its October 16 edition by stating that “a string of artificial-intelligence safety incidents is exposing a gaping hole for the fast-growing industry: the lack of available insurance.” The Journal did not enumerate specific incidents in the lead item.
The same edition carried several additional risk developments. Bank of America faces more than $1.2 billion in penalties over failures to detect financial crime, the Journal reported. U.S. tariff pressure is prompting countries to tighten their forced-labor rules, changes that could prove more durable than the tariffs themselves, the newsletter said.
Expected global economic growth this year will come in below the 3.5% recorded in 2025, according to the International Monetary Fund, with growth buoyed by strength in a few countries leading the AI boom and other nations — particularly in the developing world and parts of Europe — getting hit.
Google has begun outreach to Lea County, New Mexico, an area of arid pastureland in the oil-rich Permian Basin with about 75,000 residents, about a possible new data center. “We’re listening,” the company told the community via a website, saying its plans remain “in the very early stages” and that the data center would consume water “at a similar rate to an office building.” A survey asks what additional investment the area might need. Hyperscalers — large tech companies operating vast networks of computing infrastructure — are seeking to publish construction plans sooner to head off local opposition, though answering concerns about electricity prices and water waste is becoming harder, the Journal reported.
The Journal separately highlighted its prior reporting that Tether, the company with the most at stake in the Genius Act stablecoin legislation signed by President Trump in July 2025, steered “millions of dollars” to a business called Nxum co-owned by Bo Hines, the president’s 29-year-old crypto adviser, while Hines was leading the White House push to pass the bill. A Nxum representative said Hines was unaware of the business dealings with Tether and did not receive Tether-derived funds while at the White House. Tether later hired Hines to run its U.S. operations.
The newsletter also carried a quote from Ukrainian President Volodymyr Zelensky: “It is important that everyone in America stand not with the aggressor, but with our efforts to protect lives, end this war, and guarantee security.” The quote accompanied reporting that Ukraine had resumed strikes on Russian refineries.