5 Notable Data Center Links, May 30 2026
AWS Shares Network Design Breakthrough, Ohio Pauses Data Center Tax Incentives
Each week I curate 5 links from the data center sector that I find particularly interesting, with my commentary on why they merit your attention.
Sound interesting? Subscribe and get them every Saturday.
5 Notable Data Center Links
AWS Masters Flat Data Center Networks at Scale - In the age of AI, networking is the new hotness, and the focus of innovation by hyperscale operators. Amazon says its teams have developed an approach to “flat” data center network that will be faster and more resilient than previous designs. Amazon describes it as a ”breakthrough that will deliver greater reliability and performance for AWS customers, save billions of dollars in hardware, and lower CO2 emissions.” The Amazon team applied random graph theory and new networking hardware (the “ShuffleBox”) and a new routing protocol (Spraypoint) to manage connections. The end result: The network uses 69% fewer routers, delivers up to 33% better throughput, and projects a 40% reduction in network equipment electricity consumption. Given the global scale of AWS operations, this innovation could generate enormous savings across the company’s data center footprint.
While Amazon’s approach may be novel and delightfully nerdy, it’s not the only hyperscaler implementing a flat network. Last November Microsoft said its new Fairwater AI data center design "uses a single flat network that can integrate hundreds of thousands of the latest NVIDIA GPUs into a massive supercomputer" and features "an advanced network architecture that can scale reliably beyond traditional Clos network limits with current-gen switches." In April, Google unveiled its Virgo Network, a scale-out fabric custom built for AI networks. It’s built on high-radix switches that reduce network layers by allowing more ports per switch, and employs a flat, two-layer non-blocking topology. “Compared with traditional datacenter networks, this significantly reduces latency by minimizing network tiers,” the Google team writes.
As for AWS, it began rolling out the new network design in Spain, Germany and Ireland in 2025, and “will implement it across the majority of its data centers globally in 2026.” The company has shared a detailed narrative of its process, as well as an explainer video on its YouTube channel, while the full white paper is posted on arXiv.Ohio Governor Pauses Data Center Tax Incentives - Ohio, which is home to one of the world’s largest cloud clusters, is pausing tax incentives for data centers while the state legislature weighs their future. The Ohio exemption provided $1.6 billion in tax breaks for data centers in 2025, as the industry invested $27.2 billion in the state. “The governor felt it was the right time to let the citizens know, let businesses know that we’re going to pause on new offers of this tax incentive while that process plays out,” Gov. Mike DeWine’s spokesperson, Dan Tierney, said Thursday.
The pause comes just hours after the state legislature opened hearings for a committee studying the impact of the 200 data centers in the state, including a massive cluster in New Albany, near Columbus. “The Ohio Tax Credit Authority will stop accepting new data center tax exemption proposals after its currently scheduled meeting on Monday, where an existing data center tax exemption request will be considered,” DeWine said in a statement, emphasizing that the pause is “not a data center ban.”
VA, NJ, PA Governors Outline Options for Data Centers - I’ve been trying to avoid having “5 Notable Links” become a litany of data center moratoriums and bans. That said, this week brought consequential updates in leading data center markets beyond Ohio, with growing implications for site selection and future investment.
In Virginia, Gov. Abigail Spanberger said she opposes a move by some in the state legislature to revoke the existing tax incentives, which have played a huge role in making Northern Virginia the world’s largest data center market. But Spanberger said told the Virginia Mercury that she is “open to discussions” about whether the tax break continues past 2035. The dispute over tax breaks is delaying the state budget, and must be resolved by June 30 to avoid a state government shutdown.
In New Jersey, Gov. Mikie Sherrill laid out a four-point plan that will require data centers to pay for the electricity they use, and report their power and water consumption. Sherrill said guidelines are also being developed for community development agreements, which will require data centers to address noise and pollution concerns.
In Pennsylvania, Gov. Josh Shapiro outlined a plan tying incentives for operators to impacts on the power grid and environment.Modine Receives $4 Billion Cooling Contract With Strategic Customer - In our resource-constrained environment, data center builders are planning ahead and locking down key equipment years ahead of time. That translates into large orders with key vendors. This week cooling specialist Modine said it has signed a long-term capacity agreement that will supply more than $4 billion of its Airedale data center cooling products for sale to a strategic customer from 2027 through 2029. Modine received an upfront cash payment of $165 million to secure the capacity, the company said. “This landmark agreement is a testament to the successful execution of our long-term strategy to grow our Data Centers business and validates our position as a technology leader,” said Neil D. Brinker, President and Chief Executive Officer of Modine, who told analysts the agreement focused on chillers.
I Squared Acquires 10 Cogent Data Centers for New Platform - We’re still seeing new data center platforms emerge. Infrastructure investor I Squared Capital announced plans Tuesday to acquire a portfolio of 10 data center facilities from Cogent Fiber (a subsidiary of Cogent Communications) for $225 million. The facilities will be used to create a new data center platform focused on high-density colocation and AI inference infrastructure. I Squared has committed up to $1 billion to build the platform through targeted capital investment, customer-led expansion, and additional acquisitions. The 10 data centers total 53 megawatts of power capacity and 259,000 square feet of available colocation space across nine U.S. markets: Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville and Stockton. We’ve been tracking the trend in distributed networks for AI inference, but most are using modular designs engineered to support liquid-cooled AI equipment. Telecom data centers historically have not been designed for extreme density, which may account for the planned capital investment.
If you found 5 Notable Links useful, please subscribe so you can get it each week!
