PG&E's AI datacenter pipeline more than doubles in Q2 2026, signaling hyperscaler leasing acceleration and grid strain.

PG&E Corp. reported a 7.6-gigawatt increase in its data center pipeline during the second quarter, signaling accelerating momentum in the artificial intelligence infrastructure build-out. The California utility's pipeline of proposed data center projects totaled 12.7 gigawatts at the end of June, more than doubling from 5.1 gigawatts in March. This expansion underscores that the data-center boom is beginning to extend beyond the states that have dominated AI infrastructure development thus far, including Virginia and Texas.

The utility categorizes projects in its pipeline according to the stage of the interconnection application process. The largest gain in the second quarter came from projects that have completed the initial application and paid the study fee. PG&E now has 26 projects totaling 8.2 gigawatts in that category, up significantly from 1.7 gigawatts in March. However, far fewer projects have progressed to the final stages of interconnection: only four projects, totaling 490 megawatts, have secured actual interconnection construction agreements, up from 140 megawatts in the prior quarter.

PG&E has stated it is working to reduce customers' electricity bills while managing the challenges of connecting increasingly large data centers to its power grid. According to the company, each additional gigawatt in its data center pipeline reduces customers' bills by 1% or more. However, the company cautioned that those results can "differ materially" depending on the pricing and rate design for large electricity users—an issue that utilities and regulators continue to work through.

The company's stock fell as much as 3% following the announcement, marking its largest intraday decline in over a month, after PG&E reported second-quarter operating revenue that fell below analyst expectations.