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only  at  higher  prices  or  under  less  favorable  long-term  commitments.  In  order  to  secure  near-term  access  to 
compute, we may also elect, or be required, to procure long-lead-time generation and electrical equipment at 
prices  above  prevailing  market  rates  on  the  expectation  that  it  can  be  deployed  on  an  accelerated  timeline  to 
unlock  capacity  in  the  near  term.  Realizing  the  benefit  of  paying  such  prices  depends  on  the  timely  and 
successful  engineering,  procurement,  and  construction  of  the  associated  facilities,  which  requires  specialized 
expertise  that  is  currently  in  short  supply  and  involves  significant  execution  risk.  Delays,  cost  overruns,  or 
failure to secure energy on the anticipated schedule could mean that we do not obtain the energy and capacity 
for  which  we  paid  such  prices.  In  some  cases,  these  arrangements  also  depend  on  a  developer  or  other 
counterparty agreeing to purchase the equipment at such prices, finance such purchase, and recover those costs 
and associated financing costs from us over time, and we may bear these costs even if the underlying capacity is 
delayed or never realized. Our equipment supply framework agreements and similar arrangements may expose 
us to further risks, including minimum purchase or take-or-pay commitments, price escalation, and obligations 
that we are unable to align with our actual deployment needs.

Additionally, the U.S. government has imposed and may continue to impose export controls restricting the sale 
of advanced chips and chip manufacturing equipment to certain countries, including China. These restrictions 
have affected global chip and related equipment supply allocation, and future changes in export control policy 
could affect the availability or pricing of the compute resources on which we rely. Future export controls could 
be  more  restrictive,  for  example,  by  placing  restrictions  on  the  countries  in  which  advanced  chips  may  be 
installed or in which model weights may be stored, which could limit where we or our partners are able to build 
data centers, constrain our international expansion, or increase our costs.

Electrical Power and Fuel Constraints

The  operation  of  data  centers  at  the  scale  required  for  frontier  AI  development  and  deployment  consumes 
substantial  quantities  of  electrical  power.  The  availability  of  sufficient  electrical  power  has  emerged  as  a 
significant  constraint  on  data  center  development  and  expansion  in  many  geographies,  including  the  United 
States. Electrical grid infrastructure in the United States and other countries was not designed to accommodate 
the  rapid  increase  in  demand  associated  with  AI  development,  and  the  lead  times  required  to  build  new 
generation  capacity,  transmission  infrastructure,  and  grid  interconnections  can  extend  for  years.  Demand  on 
electric grid infrastructure is also increasing as a result of the increased electrification of homes, vehicles, and 
industry,  and  this  growing  demand  is  occurring  at  a  time  when  power  generation  capacity  additions, 
transmission  expansion,  and  grid  modernization  efforts  have  not  kept  pace  and  certain  existing  generation 
resources are being retired, all of which has contributed to higher electricity prices and longer interconnection 
timelines  in  certain  regions.  We  have  publicly  committed  to  covering  the  cost  of  electricity  price  increases  to 
consumers  caused  by  our  data  centers,  including  both  the  cost  of  electricity  itself  and  the  infrastructure 
necessary to deliver it. 

Our access to electrical power also depends on our ability, and the ability of the third parties on which we rely 
for  the  construction,  management,  and  operation  of  our  data  center  facilities,  to  negotiate  and  maintain 
contracts with utility providers and grid operators and to obtain approvals from public utility commissions and 
other  regulators.  These  parties  may  be  unable  or  unwilling  to  approve,  or  may  condition  or  delay,  the 
connections,  capacity  expansions,  special  or  negotiated  rate  arrangements,  and  infrastructure  investments 
necessary to support data center growth, or may grant them only at costs that limit the economic efficiency and 
viability of certain facilities, such as by requiring us to bear grid upgrade or interconnection costs beyond those 
attributable to serving our facilities—representing a larger share of costs than is required under existing or prior 
regulatory constructs. Interconnection queues for large new electricity loads have also lengthened substantially 
in many regions, which could delay or limit our access to grid power. Utility providers and regulators may also 
reallocate  previously  committed  capacity  that  our  data  center  facilities  may  require.  In  many  jurisdictions,  a 
single utility provider has substantial control over the terms, timing, and cost of the service and infrastructure 
necessary to power our data center facilities. The commercial and regulatory priorities of utility providers may 
differ  from  ours,  including  with  respect  to  which  infrastructure  investments  are  made,  how  their  costs  are 
allocated,  and  whether  alternative  or  self-supplied  generation  arrangements  are  permitted  and  on  what 
conditions. Utility providers and other stakeholders may also seek regulatory or legislative measures affecting 
large  electricity  loads,  self-supply,  or  alternative  power  generation  arrangements.  The  outcomes  of  our 
negotiations and regulatory proceedings involving utilities are uncertain, and unfavorable results could increase 
our  costs,  delay  our  projects,  or  limit  the  alternatives  available  to  us.  More  broadly,  regulatory  proceedings 

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