Consortium Aims to Deploy Prefabricated AI Data Centers at Utility Substations
February 5, 2026
A consortium of industry leaders is launching an initiative to address the dual challenges of surging AI-driven power demand and strained electrical grids by deploying prefabricated data centers directly at utility substation sites. The collaboration, announced this week, brings together chipmaker Nvidia, real estate giant Prologis, energy research organization EPRI, and modular data center provider InfraPartners. The partnership will study the feasibility of deploying "micro" data centers, with power capacities ranging from five to 20 megawatts, at or adjacent to electrical substations with available grid capacity. The core objective is to leverage existing grid infrastructure to rapidly deploy computing power for AI inference workloads closer to end-users.
The group has set an ambitious target of having at least five pilot sites across the United States in development by the end of 2026. "AI is transforming every industry, and the energy system will need to continue to evolve to meet increasing demand," said Arshad Mansoor, President and CEO of EPRI. He emphasized that the initiative represents the type of innovation required, stating, "Using existing grid capacity to bring inference compute closer to where it's needed - quickly and reliably - is a win for all." The move signals a strategic shift in data center deployment, focusing on smaller, distributed nodes rather than massive hyperscale campuses. Prologis, traditionally an industrial real estate firm, brings its development expertise and national land portfolio to the table. "As energy demand grows, we need infrastructure solutions that support grid reliability and make better use of what's already built," noted Parag Soni, Prologis's senior vice president of global utility strategy.
For InfraPartners, which specializes in turnkey prefabricated solutions for AI, the collaboration is about enabling a new infrastructure paradigm. "AI is becoming the real-time engine of growth for the modern economy, and it demands a new kind of digital infrastructure," said CTO Harqs Singh. The initiative could potentially reduce the lengthy timelines and complex power procurement processes associated with traditional data center construction, offering a more agile model to support the explosive growth of edge AI and sovereign AI applications.
Source: datacenterdynamics
