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World's Largest Data Center Project On Verge Of Collapse After Blackstone Unexpectedly Pulls Out
Up until now, when it comes to real estate, Blackstone was best known in recent years for dumping many of its trophy office properties - which in the aftermath of work from home never recovered their projected cash flow potential - at a huge discount. Now, it may be pulling a page from its old, pre-Lehman playbook by calling the top in yet another commercial real estate segment: data centers.
Two days ago we reported that Blackstone was selling its stakes in a trio of data centers across Northern Virginia for $3.5 billion, cashing out of part of a bet it made less than three years ago. According to Bloomberg, Digital Realty Trust would pay $1.2 billion of cash and offer $2.3 billion of its shares (which the PE giant has largely cashed in by now) to Blackstone funds; in exchange, the data center company will acquire Blackstone’s 80% interest in two 96-megawatt data centers in Manassas, Virginia, and a 50% interest in a 96-megawatt center in nearby Sterling.
We said that "the question is why did Blackstone decide to pull the cord now, just as fresh doubts are creeping whether the Mag 7s will continue funding the AI expansion with virtually unlimited capex."
Two days later we have an answer.
The digital ink is barely dry on its Virginia data center sales, and we learn that Blackstone’s QTS (QTS Realty Trust) is again quietly fading its AI exposure by walking away from plans to build its portion (which at this point is the only portion left after its partner already pulled out days ago) of a 2,100-acre data center campus in Virginia - also known as Prince William Digital Gateway which would house as many as 37 data-center buildings - handing a win to residents who fought for years to topple the project.
QTS's proposed facility at 9400 Godwin Drive in ManassasThe data center developer had planned to transform more than 800 acres in Northern Virginia’s Prince William County, a project that would have spanned 22 million square feet, making it the largest data center campus in the world. Located on the edge of an historic Civil War battlefield and on what used to be land protected from development, the project ignited strong pushback from homeowners and has been stalled by lawsuits.
As part of Wall Street’s broader push into data centers, investment has poured into Northern Virginia, which is considered the country’s largest data center market, and is better known as "Data Center Alley"
But in a strategic U-turn, in recent days QTS executives decided that it isn’t worth pressing forward in court, the Bloomberg sources said. The firm’s attorneys plan to inform the court of their decision as soon as this week, the people said, asking not to be named discussing non-public information.
QTS’s rapid growth has made it a poster child of how private equity has fueled the data center industry’s breakneck expansion. Those ambitions are colliding with public anxiety over strains to electricity grids and home prices from AI data centers.
The retreat may be the final blow to Virginia’s “Digital Gateway” project, a mega site roughly twice the size of New York’s Central Park with city-sized power needs. The initiative was supposed to bring in some $100 billion in spending and create one of the world’s largest technology corridors. Not any more.
The project had sparked contentious, drawn-out public hearings. A clerical blunder related to a key zoning meeting created setbacks for developers. Already, Brookfield-backed Compass Datacenters, which was supposed to build on more than 800 acres at the site, had pulled out in May.
The U-turns by both firms, Bloomberg writes, amount to one of the most dramatic retreats by developers from a data center project.
It’s a reminder of how tech firms’ race for the computing infrastructure to support AI advances is increasingly facing the same bottlenecks, from power shortages to supply crunches, we have been warning about for the past two years and which Citadel Securities warned about just yesterday.
Organized opposition is mounting, forcing firms and developers to be more deliberate about where they choose to build. This is precisely what we warned one year ago would happen as more grassroots organizations pushed back against the relentless data center rollout. At least we haven't gotten to the arson stage (yet).
between exploding electricity bills and lack of jobs for grads, a new luddite revolution is coming - they will be burning down data centers within a year
— zerohedge (@zerohedge) August 25, 2025To account for the costs of such build outs, Virginia recently passed a budget with an energy consumption tax on data centers, and more states are threatening moratoriums on new development. Data centers - and how their costs and benefits are shared - are now emerging a major swing issue in the lead up to the US midterm elections. These hurdles raise questions for investors over whether the AI build out can keep going at this pace.
For community organizers and residents that spent the last five years opposing the Digital Gateway, QTS’s pullout will now validate a playbook that involved pressure campaigns on local politicians and legal attacks. It will also unleash even more powerful blowback nationwide against these unwanted developments.
As Bloomberg recalls, hundreds of proponents and critics showed up at a 27-hour zoning hearing in 2023 to lobby authorities on the project. After county officials narrowly voted to approve the conversion of agricultural and semi-rural land for data centers, community organizers and residents pursued lawsuits.
The outcome of the meeting - and whether the county properly advertised the event - was at the center of legal challenges. The lawsuits hinged on one detail: The first two newspaper notices publicizing the hearing weren’t separated by at least six days, as state and local codes required at that time. While it is unclear if Blackstone agents had tried to "grease" the zoning board's palms to quietly fast-track the data center, in the end the outcome was catastrophic to the builders.
In March, Virginia courts upheld an earlier ruling that the zoning approvals were invalid because the public notices for the meeting fell short of rules.
Opponents of the Digital Gateway data center project rallies at Manassas Battlefield Park.“While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward,” Compass Datacenters President AJ Byers said in a statement following the ruling.
After Compass bailed on the project, that left QTS as the lone developer. It was the only party that petitioned for an appeal of the case in Virginia’s Supreme Court.
Originally, the firm’s executives were concerned about the prospect of setting a legal precedent on the back of an administrative oversight. After Compass’s retreat, QTS lost a partner who would share the costs of upgrading various utilities needed for the massive developments, said one of the people familiar with the matter. QTS decided it was not worth proceeding with the project.
Blackstone, which acquired QTS in 2021, is a major financier of data centers, with a portfolio of more than $150 billion of such assets around the world.
The increasingly bitter political and grassroots pushback against new data center construction explains why Blackstone has been getting cold feet just as the AI bubble is peaking, first selling existing data centers and now walking away from upcoming projects. A recent Gallup poll found that 7 in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including nearly half, 48%, who are strongly opposed. Barely a quarter favor these projects, with 7% strongly in favor.
Half of opponents mention data centers’ excessive use of resources, including 18% each mentioning their use of water and energy. Sixteen percent mention a related environmental concern of pollution, including noise pollution and air and water pollution.
About one in five opponents are concerned with the impact on local quality of life, including increased population, increased traffic and preferring that the land be used for other purposes. A similar share mention potentially negative economic consequences, including higher utility bills, cost-of-living increases, and the cost of building the data centers (which could involve the use of taxpayer funds).
Most of the remaining opposition stems from general or specific concerns about artificial intelligence.
Blackstone, which manages more than $1.3 trillion, bills itself as the largest global provider of data centers, and also owns some of the utilities that power them. It acquired QTS in 2021 and bought Australian computing provider AirTrunk in 2024. In May, the firm held an initial public offering for Blackstone Digital Infrastructure Trust Inc., its data center acquisition vehicle, which aims to buy already built and leased properties benefiting from the artificial intelligence boom.
And now that the protest movement knows how to push back against uninvited Wall Street occupants, thanks to the BlackStone capitulation, expect an exponential increase in legal (and other) attempts to hinder the rollout of data centers across the US, assuring that the AI supercycle, which is already years behind schedule with just half of the data centers meant to be built in progress and on time, will expect to see an avalanche of delays and cancellations assuring that the return on debt-funded capex will be even less as eventual launch dates gradually move ever further into the unknown future.
Tyler Durden Thu, 07/02/2026 - 17:20US Nuclear Regulator Proposes Changes To Nuclear Safety Standards
Authored by Jill McLaughlin via The Epoch Times,
A U.S. nuclear regulatory agency proposed sweeping reforms July 1 to modernize nuclear reactor licensing and safety practices, shifting away from a global radiation measurement standard after 50 years.
The cooling towers for units 4 (L) and 3 (R) are seen at Plant Vogtle, operated by Georgia Power Co., in east Georgia's Burke County near Waynesboro, Ga., on May 29, 2024. Arvin Temkar/Atlanta Journal-Constitution via AP, FileThe regulatory changes are expected to make it faster and easier to build more nuclear reactors to meet increased energy demands.
The Nuclear Regulatory Commission (NRC), an independent federal agency that oversees licensing and regulation of nuclear energy and radioactive materials, expects the changes will streamline regulations without lowering safety standards.
"NRC's regulations have not kept pace with new technologies and our energy needs," Chairman Ho Nieh said in a July 1 statement. "This proposed rule strips out rigid frameworks and unnecessary conservatism to accelerate the safe deployment of new reactors and expand existing capacity across America."
The effort is part of President Donald Trump's executive order, "Ordering the Reform of the Nuclear Regulatory Commission," signed May 23, 2025, calling for his administration to reform the agency's regulations and operations to achieve dominance in the global nuclear energy market.
The order also sets out goals to quadruple American nuclear energy capacity from about 100 gigawatts in 2024 to 400 gigawatts in 2050.
To get there, the order calls for adopting science-based radiation limits and reconsidering reliance on the decades-old framework of the linear no-threshold model for radiation exposure and the "as low as reasonably achievable" (ALARA) standard.
"Those models are flawed," Trump's order stated.
The agency was directed to consider adopting determinate radiation limits and consult with the Department of Defense, Department of Energy, and the Environmental Protection Agency.
Changing the model would represent the first major shift in U.S. nuclear policy in half a century.
Critics say that the deregulation could prioritize economic growth over public health.
Changing the radiation model has drawn criticism from nuclear safety expert Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists.
Last year, Lyman told the agency in July 2025 there was "absolutely no technical or practical basis" for changing the agency's use of the ALARA principles in its radiation protection regulations.
A report last year by the Conservative Coalition for Climate Solutions found the change would be a step in the right direction for nuclear energy.
Using ALARA standards is enormously costly, raising the price of building and operating nuclear plants by billions of dollars, the 2025 report found. The standards have also created public phobia and misinformation that "any radiation is harmful," according to the report by the coalition's Nick Loris and Prasanna Pydipalli.
Other countries - France and South Korea - are shifting toward threshold-based models using data collected from worksites but haven't yet made the change, the report found.
The coalition concluded that adopting the new threshold standard for radiation would unleash the potential of nuclear innovation.
"By moving from outdated fear-based models to proportionate, risk-informed regulation, the U.S. can lead the next era of safe, reliable, clean, and globally competitive nuclear energy," Loris and Pydipalli wrote.
The commission issued proposed rules to modernize reactor oversight and radiation protection, and issued draft text to reshape its environmental review process under the National Environmental Policy Act.
The agency's proposed changes would give nuclear power plant operators more flexibility in evaluating radiation doses to workers and the public using more up-to-date methods.
Jay Timmons, president of the National Association of Manufacturers representing 13 million workers, commented on the announcement.
"Building more nuclear reactors here at home is how we secure America's energy future and unleash American energy dominance," Timmons posted on X on July 1.
The U.S. Department of Energy's "Reactor Pilot Program shows what is possible when policymakers embrace innovation instead of standing in its way," Timmons said.
Energy Secretary Chris Wright testifies before the Senate Armed Services Committee hearing on the budget request for the Energy Department on Capitol Hill in Washington on May 13, 2026. Manuel Balce Ceneta, File/AP Photo Tyler Durden Thu, 07/02/2026 - 17:00‘Elle’ star raves about how Reese Witherspoon surprised cast, James Van Der Beek’s ‘absolute light’ on set
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Warren Pushes Progressive Agenda In Senate Primaries As Schumer Prioritizes Path Back To Majority
Senate Minority Leader Chuck Schumer and Sen. Elizabeth Warren are engaged in a high-stakes contest for influence over the future direction of Senate Democrats, with the Massachusetts progressive working to reshape the caucus through targeted primary support while the New York leader focuses on expanding the map to retake the majority.
Warren has thrown her weight behind several challengers who have explicitly said they would not support Schumer remaining as leader if Democrats regain control. She has framed her involvement as a response to voter demand for bolder action on economic issues and systemic change, pointing to recent primary successes by candidates aligned with New York City Mayor Zohran Mamdani as evidence that the party's base is ready for a sharper break from the status quo.
In comments to The Hill, Warren highlighted the outcomes in New York's House primaries, where three Mamdani-backed candidates prevailed against establishment-backed incumbents. She described the results as a reflection of broader voter sentiment rather than isolated events. "It says more about the state of voters. Voters want change. They want people who have clear ideas about how to make their lives better and to know that they will fight for them," Warren said.
Those New York victories were widely viewed as setbacks for the Democratic establishment. The wins featured strong showings by progressive and democratic socialist candidates and included moments of open frustration with party leadership, such as crowds at victory events chanting "You're next" when House Minority Leader Hakeem Jeffries appeared on screen. Warren had endorsed Mamdani during his successful 2025 mayoral bid; Schumer did not publicly support him.
Watch as supporter chant "You're Next" at Hakeem Jeffries during Claire Valdez' victory party last night after all three Mamdani-endorsed socialists won their Congressional races.
The Democrat Party is now the Party of socialism - and the establishment Dems can't put that genie… pic.twitter.com/anlIZFq0n7
Schumer, a prolific fundraiser, has concentrated on recruiting and backing candidates he believes have the best shot at winning competitive general elections. A spokesperson for the leader emphasized that his sole priority is "taking back the Senate" to block President Trump's agenda and deliver results for Americans, arguing that recent recruitment efforts have created a credible path to majority status that few anticipated a year ago.
The friction between the two senators has become harder to downplay. Democratic strategist Steve Jarding noted that successful Warren-backed candidates would likely serve as "soul mates" on key issues, elevating her standing within the progressive wing of the caucus.
An anonymous Democratic senator aligned with Warren described to The Hill growing unease among progressives that Schumer and DSCC Chair Kirsten Gillibrand are too closely tied to corporate interests. The senator singled out Gillibrand's role in advancing cryptocurrency deregulation legislation as particularly problematic and questioned Schumer's recruitment of 78-year-old Maine Gov. Janet Mills to challenge Sen. Susan Collins. The source called Mills a "conservative, business-oriented Democrat" lacking grassroots energy at a moment when the party's base wants the system disrupted, drawing parallels to concerns raised after President Biden's 2024 debate performance.
Warren has endorsed multiple Senate primary candidates who have distanced themselves from Schumer's leadership, including Graham Platner in Maine, Lt. Gov. Juliana Stratton in Illinois, and state Sen. Mallory McMorrow in Michigan. She has also backed Lt. Gov. Peggy Flanagan in Minnesota and Zach Wahls in Iowa, neither of whom has committed to supporting Schumer. Schumer, by contrast, backed Mills in Maine and Rep. Haley Stevens in Michigan.
In Iowa, the super PAC VoteVets - historically aligned with Schumer - spent roughly $10 million supporting Josh Turek, who defeated Wahls. Schumer and Gillibrand issued a joint statement celebrating Turek's nomination as putting the seat "firmly in play" for November.
Warren has supplemented her candidate endorsements with substantial fundraising, contributing a total of $800,000 to state Democratic parties in six battleground states this cycle: Alaska, Georgia, Maine, Michigan, North Carolina, and Ohio.
She has defended her choices, particularly her support for Platner, arguing that he connects directly with Mainers struggling economically and is committed to fighting corruption and lowering costs in Washington.
Despite the visible tensions, most Democratic senators do not expect Warren to mount a formal challenge to Schumer's leadership after the midterms. She is seen primarily as a policy advocate rather than someone positioned to manage a large and diverse caucus. A Warren spokesperson confirmed she "has no interest in being the Senate Democratic leader." When asked directly about the possibility, Warren laughed softly and replied: "I want to do everything that I can to help working families. We need a Democratic Party that's ready to be in the fight."
Tyler Durden Thu, 07/02/2026 - 16:40