Tenants of AI data centers, primarily hyperscalers and AI labs, are increasing pressure on developers by raising penalty demands for construction and power delivery delays. By October 2026, daily penalties for missed deadlines reached over $5 million, a fivefold increase from the $1 million per day reported earlier in the year.
Contractual terms are becoming increasingly stringent. For example, an agreement between OpenAI and SB Energy for Ohio projects grants one day of free rent for every day of delay, with the penalty doubling after 90 days. A one-year delay under these terms could result in approximately 640 days of free rent for the tenant.
Developers face significant operational bottlenecks, including equipment shortages, permitting issues, and delays in grid interconnections. Lead times for critical components like transformers and generators have extended to 12–24 months, forcing developers to procure equipment well before project finalization.
The legal landscape is shifting as companies navigate these risks. In September 2026, Oracle issued a force majeure notice for its Project Jupiter campus in New Mexico to protect its right to defer rent if power delays impact the planned 2028 opening. Meanwhile, utility providers are demanding stricter collateral from developers.
