Across 10 states, voters approved restrictions or rejected data center proposals in 40 of 41 local ballot initiatives, according to tracking by Redbud Consulting.

The measures passed by an average margin of 49 percentage points, cutting across traditional partisan lines in communities ranging from conservative Edgewater, Fla., to progressive Alhambra, Calif. Only one restrictive measure failed, in Harwood, N.D., where local leaders successfully argued that an ongoing project was vital for municipal revenue.

The backlash against the massive energy- and water-intensive facilities also reverberated in high-profile statewide races. In Texas, where Bernstein estimates data center construction accounts for 28% of the state’s gross domestic product, Democratic Governor-elect Gina Hinojosa unseated long-standing Republican control after campaigning on a moratorium on new data centers until lawmakers pass consumer, union labor, and transparency protections.

Similarly, in Ohio, Democratic Governor-elect Amy Acton pledged moratoriums on projects failing to meet union hiring and industrial zoning standards, while Democratic Senator-elect Sherrod Brown targeted incumbent Jon Husted over his past support for the industry.

According to NBC exit poll data, 56% of voters — and 68% of Black voters — said data centers were a major or crucial factor in their congressional vote.

While Democrats accounted for roughly two-thirds of those voters, opposition spanned ideological divides, uniting environmentalists, farmers concerned about land use, and residents facing higher utility bills.

Ahead of the election, President Donald Trump pushed back against critics, arguing that opposing data centers would leave communities “backwards and poor.” Yet bipartisan concern in Congress had already prompted the House to pass the Ratepayer Protection Act by a 417-3 vote, though the bill stalled in the Senate over debates regarding voluntary versus mandatory utility rules.

News of the election results and the prospect of a Democrat-led Congress pursuing tighter oversight triggered an immediate sell-off in AI infrastructure stocks. However, Wall Street analysts and industry participants suggest the political shift will prompt a regulatory reset rather than halt the AI building boom.

Investment bank Bernstein projected that even in an extreme scenario, only 9% of planned data centers would fail to break ground, with a realistic cancellation rate of 2% to 4% nationwide.

Susquehanna Financial Group similarly forecasts that more AI-training data centers will be built in 2027 and 2028 than this year. Major tech companies, including Amazon.com Inc., Microsoft Corp., Alphabet Inc.’s Google, and Meta Platforms Inc., which are on track to spend over $720 billion on capital expenses this year, have deep financial reserves to absorb higher power costs, reduced tax breaks, and stricter regulations.

Microsoft, for instance, has already begun drafting model state legislation addressing tax revenue and water limits after internal polling showed 70% of residents would accept data centers with proper safeguards.

Smaller, heavily leveraged builders known as “neoclouds” face greater vulnerability to rising costs and delays, which former Microsoft executive Brian Janous said will “separate the wheat from the chaff.”

Meanwhile, political observers note that while exit polls do not fully capture the breadth of national resistance against more than 600 proposed facilities, the narrative of voter pushback is already reshaping economic expectations and setting the stage for data center regulation to become a central issue heading into the 2028 presidential primaries.

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Huang’s departure followed a tense late-night board meeting on Wednesday, where people familiar with the matter described the typically commanding executive as visibly “broken and shattered.”

Ahead of the board’s vote that ultimately forced him out, Huang acknowledged his relationship with Alice Huang — a businesswoman suspected by U.S. intelligence agencies of ties to Beijing — and expressed remorse over the impact on his wife and the women publicly implicated, and said he no longer cared what happened to him. NVIDIA’s board has since launched an independent investigation, indicating it currently has no reason to believe company secrets or U.S. national security were compromised.

There has been no public finding that Jensen Huang violated export-control laws, and the Justice Department has not indicated it plans to pursue criminal charges against him or NVIDIA.

However, the scandal has cast a harsh spotlight on a complex corporate network tied to Alice Huang, whose Chinese name is Huang Le, and her alleged links to Huawei, NVIDIA’s chief Chinese competitor and a state-backed telecommunications giant.

According to corporate records compiled by private intelligence firm Tesari and shared with CNBC, Alice Huang held stakes in Chinese entities that supplied computing power to Huawei around late 2023, the same time she and Jensen Huang were first seen together publicly.

In 2016, she co-founded Shanghai Hexi, a financial firm that later acquired a 27% stake in data center developer Shanghai Century Longteng. That firm held a controlling stake in Shenzhen Yifeng Technology Co. Ltd., a mainland data center whose primary customer was Huawei Cloud. Hexi also guaranteed loans for the facility, while its business partner in Century Longteng, Zhejiang Century Huatong Group, began purchasing NVIDIA chips in 2023. Although Hexi exited its stake in 2024, Alice Huang’s husband and longtime business associate, Kang Wei, remains an executive at Century Longteng and attended the signing of its Huawei agreement.

Brian Andersen, a former Homeland Security Investigations supervisory special agent now at Tesari, said the convoluted nature of the corporate web appeared designed to obscure ties to Huawei and warranted a federal counterproliferation investigation into potential smuggling and export-control violations.

Alice Huang’s business footprint also intersects with Megaspeed, a Singapore-based cloud company at the center of federal scrutiny. In 2019, she sold a cloud business to Chinese gaming company 7Road, which later spun off Megaspeed in 2023. Megaspeed subsequently became a major NVIDIA partner, facilitating at least $7.5 billion in NVIDIA chip shipments to Chinese firms. Megaspeed has denied illegally diverting chips to China.

In Washington, the controversy has intensified political and legal pressure on the tech sector. According to administration officials, the Justice Department is conducting an antitrust probe into NVIDIA alongside two separate inquiries into Megaspeed and server maker Supermicro regarding Alice Huang’s involvement.

Supermicro has denied that Megaspeed was ever a customer and stated it is fully cooperating with U.S., Taiwanese, and Singaporean authorities. Meanwhile, the scandal has fueled criticism in Congress and the administration toward Commerce Secretary Howard Lutnick, with detractors accusing the Commerce Department of being too cozy with NVIDIA and failing to adequately police Asian chip sales.

The leadership vacuum coincides with mounting evidence that U.S. export restrictions — first imposed in 2022 and later tightened — have failed to halt China’s access to advanced NVIDIA processors.

While Jensen Huang previously stated that NVIDIA’s Chinese market share had dropped from 95% to zero, a Reuters review of more than 150 procurement notices, corporate disclosures, and construction contracts uncovered over 23 billion yuan ($3.2 billion) in Chinese computing projects built around restricted NVIDIA H100, H200, and H800 chips.

Spanning coastal tech hubs to remote provinces like Gansu, the projects involve universities, regional computing centers, and local government ventures.

Separately, an IDC report estimated NVIDIA still accounted for 34% of Chinese AI-accelerator shipments in the first half of 2026.

Although the Reuters findings have not been linked to Megaspeed or Alice Huang, analysts warn that Washington must shift its enforcement focus from initial buyers to the end users of computing power. With Huang’s resignation stripping NVIDIA of its most influential lobbyist and visionary leader, the company and its broader AI supply chain face deep uncertainty as U.S. lawmakers push for even stricter export controls.

NVIDIA, Huawei, Jensen Huang, Alice Huang, Megaspeed, the Justice Department, and China’s commerce ministry either declined to comment or could not be reached.

Indeed, NVIDIA’s dominance over AI may be nearing an end as rival chipmakers close the technological gap, according to Ian Weisberger, CEO of institutional trading platform CoinRoutes.

While market observers point to Jensen Huang’s departure as the immediate catalyst for NVIDIA’s recent stock decline, Weisberger argues the deeper issue is commoditization. As rivals such as AMD catch up, hardware is becoming increasingly interchangeable.

Weisberger noted that this shift will force buyers to compete on price, shifting profit margins away from chipmakers and toward companies building software and products on top of the hardware.

Even strong results in Tuesday’s upcoming earnings report won’t reverse the trend, as quarterly figures only reflect past demand. While the broader AI boom remains intact, Weisberger warned that the era of a single stock carrying roughly 8% of the S&P 500 may be over.

The post NVIDIA Faces Mounting Scrutiny Over Future, Federal Probes, and China Ties After Jensen Huang’s Abrupt Exit appeared first on Techstrong IT.

Rowan Digital Infrastructure

Round: $1.545 billion Corporate financing capacity | Sector: Cloud / Data Center Infrastructure

Rowan Digital Infrastructure secured $1.545 billion in new financing capacity: a $600 million term-loan increase led by Apterra Infrastructure Capital, plus a $590 million revolving credit facility and a $355 million letter-of-credit facility led by Citibank. The facilities support early-stage data center development, including land, power and equipment commitments, with optional expansions excluded from that total. This financing can help projects advance before construction funding is arranged, but enterprise capacity planning still depends on firm power and delivery dates.

Fractile

Round: $720 million Series C | Sector: Semiconductors

Fractile raised a $720 million Series C co-led by Thrive Capital, Founders Fund, Lightspeed and Redpoint, with UK government-backed investors also participating. The company is developing AI inference chips and plans to launch its first commercial chip in 2027. Enterprise buyers will need production benchmarks and evidence of software compatibility before treating a new architecture as a practical alternative to established accelerators.

HUMAIN

Round: Up to approximately $667 million Signed financing facilities | Sector: Cloud / AI Infrastructure

HUMAIN and Saudi Arabia’s National Infrastructure Fund signed two financing agreements totaling up to SAR 2.5 billion, approximately $667 million, for GPU procurement and power infrastructure. Announced November 9, the facilities support computing deployment and substations, transmission and grid connections; the stated amount is a financing ceiling, not reported cash disbursement. Funding the electrical infrastructure alongside processors addresses a practical constraint on AI capacity, although usable compute still depends on both arriving on schedule.

Torus

Round: $500 million Growth funding | Sector: Cloud / AI Infrastructure

Torus raised $500 million in growth capital led by Magnetar to expand manufacturing and deploy its energy storage and modular AI infrastructure across the United States. Its Foundry system combines compute, networking, cooling and power equipment in prefabricated units designed to use available capacity at existing grid connections. Enterprises considering this approach should assess site-level power headroom, cooling and service arrangements rather than assume a modular design removes deployment constraints.

LangChain

Round: $300 million Funding round | Sector: Cloud / AI Agent Operations

LangChain raised $300 million in a round led by CapitalG, with IVP, Sapphire Ventures, GIC and DFJ Growth also participating. Its paid LangSmith platform provides evaluation, version management and observability for AI agents, complementing its open-source development frameworks. For enterprise teams, those controls matter most when they expose failures before deployment and help operators diagnose problems after agents reach production.

The Weekly Funding Pulse tracks the most significant IT infrastructure, cloud, semiconductor, networking, and ITSM funding rounds each week. Coverage is curated for enterprise IT professionals and decision-makers.

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User reports began spiking shortly after 12:30 p.m. ET, affecting both individual accounts and enterprise customers, according to outage tracker Downdetector. By 1:09 p.m. ET, reports of issues with Outlook alone peaked at nearly 130,000, while disruptions for the broader Microsoft 365 suite climbed past 47,000 shortly afterward. Thousands of users also flagged connectivity issues with Copilot, Teams, SharePoint Online, Word, and Excel.

In updates posted to its official Microsoft 365 Status account on X, the tech giant confirmed the disruption was tied to an “elevated load” across a portion of its infrastructure, which initially affected Exchange Online mailboxes in the Americas before expanding to impact service connectivity across multiple regions globally.

To restore access, Microsoft said it paused all system deployments, began restarting affected servers, and started redistributing connection traffic across its broader global infrastructure to balance the load. The company noted it was also investigating an unexpected surge in a specific type of service traffic as a potential cause, though it did not immediately provide a timeline for a full recovery or respond to requests for comment.

By 1:50 p.m. ET, outage reports on Downdetector began trending downward, dropping to roughly 93,000 for Outlook and 37,000 for Microsoft 365. Thursday’s disruption follows another multi-day outage that plagued the Microsoft 365 suite in September.

“Everyone understands the importance of having out-of-band communications during a cyber incident, but as outages become an even more common business reality, that same principle needs to apply to any major disruption,” said Arvind Parthasarathi, CEO of CYGNVS. “When core systems like email and collaboration platforms go down, organizations can lose the tools they depend on to coordinate their response. Companies need a secure, independent environment where employees, executives and external partners can continue communicating, making decisions and managing recovery. Business resilience means being prepared to operate when the technology you rely on is unavailable.”

While Microsoft confirmed it was investigating Exchange Online mailbox access issues in the Americas, the lack of a clear root cause or restoration timeline fueled cyberattack speculation on X, alongside separate reports of Google and Amazon Web Services disruptions, according to analytics firm GlobalData.

GlobalData analyst Smitarani Tripathy noted that the incident demonstrates how a single service failure can ripple across email, collaboration, and AI tools, impacting healthcare workflows and daily business communications. With speculation filling the information vacuum, Tripathy emphasized that organizations dependent on a single tech ecosystem must prioritize alternative communication channels and timely updates to protect business continuity.

Global insured losses from the recent Microsoft outage are preliminarily estimated between $300 million and $500 million, according to Morningstar DBRS, signaling a limited overall credit impact on insurers.

While affected companies face operational disruptions and financial losses, compensation is not guaranteed. Many cyber insurance policies cover only malicious cyberattacks rather than technical failures, and strict waiting periods, deductibles, and exclusions often apply. Uninsured economic losses will ultimately fall on businesses.

The incident drew comparisons to the 2024 CrowdStrike Inc. outage, which disrupted 8.5 million Windows devices and generated $400 million to $1.5 billion in insured losses. Morningstar DBRS Vice President Mario de Cicco noted that while Microsoft’s outage currently appears less severe, a prolonged disruption could escalate its impact. Both events underscore growing systemic risks for insurers tied to concentrated technology providers and shared server infrastructure.

According to Matt Saunders, field CTO at Adaptavist, while some workers welcomed a reprieve from Friday morning meetings, the disruption demonstrates how heavily companies depend on cloud platforms like Microsoft 365 and Google Workspace.

Traditional disaster recovery plans often suggest maintaining a secondary backup service, yet Saunders notes that seamlessly switching between platforms is practically impossible due to differing architectures and a lack of interoperability.

Furthermore, recovery efforts are frequently hampered by a “thundering herd” effect, where waves of users attempting to reconnect overwhelm and delay system fixes. Because basic contact details are often trapped inside these offline tools, even falling back on traditional phone calls becomes difficult. Saunders urges organizations to proactively plan offline workarounds so daily operations do not completely halt during inevitable cloud failures.

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The company plans to spend $117 billion this year on computing infrastructure for AI and cloud services. But like all hyperscalers, Microsoft’s buildout faces a challenge beyond the cost of servers and GPUs: securing enough electricity without creating opposition from communities and government regulators.

The company’s commitment addresses one of the most urgent concerns for the data center industry. As local opposition grows, the question of who pays for the greater electrical demands has caused a powerful resistance to data centers that seems to be growing more powerful.

In fact, due to the rapid pace of data center development, not only are power supplies tight, but transmission infrastructure and regulatory approval have also become challenges in data center development. Still, Microsoft has also pledged to pay for necessary transmission and substation upgrades and to avoid seeking reductions in local property tax rates.

Behind-the-Meter Approach

One approach Microsoft is pursuing involves generating electricity near the facilities that consume it. The company is working with energy giant Chevron and Joulent, a company founded by investment firm Engine No. 1, on a large data center and power generation development in West Texas.

Known as Project Kilby, the initiative uses a behind-the-meter approach, in which electricity generation is connected directly to the customer’s facilities rather than relying entirely on power delivered through the public utility grid.

This model could help Microsoft secure dedicated electricity supplies while limiting additional demand on regional power networks. However, the approach does not automatically eliminate the need for grid connections or other infrastructure.

Project Kilby also illustrates the growing regulatory difficulties facing the industry. Texas Governor Greg Abbott imposed a moratorium on new data center approvals, delaying the development. The state’s recent election has added uncertainty: Democrat Gina Hinojosa defeated Abbott after campaigning on a potentially tougher approach to data center permitting.

Despite the political obstacles, Chevron is maintaining its development schedule. The energy company aims to begin operations at Kilby in 2028, with the project reaching full capacity by 2031. Chevron is also emphasizing the economic benefits of the development, including employment opportunities and tax revenue for communities in West Texas.

Jeff Gustavson, Chevron’s president of new energies, warned that projects unable to demonstrate tangible benefits for local residents are unlikely to succeed. Microsoft is promoting a similar approach through its community-first data center strategy, which seeks to establish local support for facilities that can place considerable demands on electricity infrastructure.

Whether Microsoft’s pledge is simply an attempt at public relations or a real commitment to data center energy self-sufficiency remains to be seen. Dedicated power generation offers one possible solution, but it introduces additional costs, construction requirements and permitting challenges. In any case, the company’s promise raises questions about how it will implement its policy across its infrastructure portfolio.

The post Microsoft Pledges to Cover AI Data Center Power Costs as $117 Billion Expansion Continues appeared first on Techstrong IT.

Chief Financial Officer Colette Kress has been appointed interim CEO while the board of directors conducts a search for a permanent successor, considering both internal and external candidates. To bolster corporate governance during the transition, the board also named venture investor and former Synopsys Inc. CEO Harvey C. Jones as NVIDIA’s first-ever independent board chair.

The leadership shake-up sent tremors through Wall Street. NVIDIA shares tumbled 14% at the opening bell Thursday before paring some losses to trade down 4.3%, dragging the tech-heavy Nasdaq down 0.4%. Over the past week alone, the approximately $4 trillion chipmaker has shed roughly $600 billion in market value as the scandal unfolded.

Huang’s spectacular fall and departure brings an abrupt end to his 33-year tenure at the helm of the company he co-founded, which became the dominant supplier of processors powering the global AI boom. His position became untenable after media reports late Wednesday revealed he had engaged in an extramarital relationship with a subordinate, Kimberly Powell, NVIDIA’s vice president of healthcare. On Thursday, Reuters reported Huang had an extramarital affair with a second unnamed NVIDIA employee who reported to the company’s chief information officer.

The revelations compounded an already escalating crisis triggered on Nov. 8, when NVIDIA announced its independent directors had retained outside legal counsel to investigate whether Huang had been targeted by a foreign intelligence operation.

In a memo to staff, Huang admitted to being unfaithful to his wife, apologized to his family and colleagues, and pledged full cooperation with the board’s inquiry.

The national security probe centers on Huang’s relationship with Alice Huang (no relation), a former executive at Singapore-based tech firm Megaspeed International.

U.S. intelligence officials suspect Alice Huang of acting as an agent for Beijing and feeding information to Chinese authorities while facilitating illicit shipments of advanced NVIDIA chips to Chinese firms. On Sunday, President Donald Trump announced that the FBI had opened an investigation into the matter.

According to Singaporean authorities, officials questioned Alice Huang and confiscated her passport last year during an investigation into Megaspeed. Singapore’s government said on Thursday the U.S. provided little help in its investigation into Alice Huang, the woman at the center of a spy plot that has led to the investigation of Jensen Huang, the New York Times reported.

Though Singapore declined to bring criminal charges due to insufficient evidence, it barred her from returning to the country. She has since relocated to Beijing with the knowledge of Chinese security officials. China has denied attempting to ensnare the NVIDIA chief.

In its first public statement since the scandal erupted, Megaspeed — whose assets surged nearly 90-fold to almost $3 billion between late 2023 and 2024 — denied wrongdoing. Chairman and CEO Tan Yong Pong said Thursday that the firm takes U.S. export control laws “extremely seriously,” is cooperating with the Commerce Department’s Bureau of Industry and Security, and has hired a U.S. law firm to conduct a comprehensive audit of its chip inventory.

The implications of Huang’s potential entanglement with a Chinese spy ring extend to the Trump administration and the president, whose close ties to the NVIDIA CEO intensified over the past year.

Commerce Secretary Howard Lutnick is facing bipartisan scrutiny on Capitol Hill following reports that he repeatedly stalled efforts to block suspected third-party diversions of advanced NVIDIA AI chips to China.

According to administration officials cited by multiple news outlets, President Donald Trump approved crackdowns on suspected chip diverters three separate times this year — in May, August, and early November. Yet Lutnick delayed placing Singapore-based computing firm Megaspeed, which purchased over $4 billion in NVIDIA semiconductors, onto a federal export blacklist, warning that the move could spark a broader trade war with Beijing. (Trump urged Jensen Huang to fight for his job on Tuesday, according to a New York Times report.)

A Commerce Department spokesperson denied reports of internal White House clashes over the delays.

The stalled enforcement has sparked sharp national security and economic concerns. Lawmakers warn that allowing high-end hardware to reach Chinese entities through intermediaries accelerates Beijing’s military modernization and AI capabilities while draining scarce computing supply from U.S. firms.

The controversy has also intensified scrutiny of Lutnick’s former firm, Cantor Fitzgerald, over its NVIDIA holdings, and compounded fallout from Jensen Huang’s acknowledged relationship with a Megaspeed executive suspected of ties to Chinese intelligence — a dual crisis that has rattled markets and prompted congressional demands for document preservation and hearings.

NVIDIA has maintained that it has “no reason to believe” U.S. national security or proprietary secrets were compromised, though its board review remains ongoing.

The controversy is particularly sensitive given Huang’s prominent role in lobbying Washington to ease export restrictions, an effort that secured White House approval in January to sell NVIDIA’s H200 chips to China.

As NVIDIA navigates the leadership vacuum, Kress — who has served as CFO since 2013 following stints at Cisco and Microsoft — sought to steady the company’s workforce. She is scheduled to address employees directly on Nov. 18, a day after the company announces its quarterly financial results. Adding to the intrigue, Huang is scheduled to testify before Congress in a closed-door hearing on Nov. 18. (NVIDIA’s board is consulting an outside search firm to identify potential replacements for Huang.)

“The Board, staff and I recognize that this has been an extraordinarily difficult period and I want you to know how grateful we are for your resilience,” Kress wrote in a Thursday memo to employees. “We play a vital role in building the technology that is powering the AI revolution, and we have important work ahead of us.”

In a separate letter to staff, new board chair Jones credited Huang for his “profound” contributions to the industry while expressing “full confidence” in Kress’s ability to lead the company forward.

Industry analysts said the search for a permanent CEO — potential candidates range from AMD Inc. CEO Lisa Su (possible) to former Apple Inc. CEO Tim Cook (highly unlikely) — will be crucial not only to the long-term success of NVIDIA but the overall AI industry, which is dominated and dependent on the chipmaker.

Lindsey Stewart, Morningstar’s director of institutional investor content, warned the sudden CEO exit exposes the financial risks of unconventional governance structures. Stewart noted that NVIDIA’s surging share price previously overshadowed deeper scrutiny into succession planning, board oversight, and geopolitically sensitive strategies. Her colleague, Brian Colello, slashed his price target on NVIDIA stock to $250 from $310 on Thursday.

Those governance questions are now expected to take center stage — not only for NVIDIA, Stewart said, but across other founder-led tech giants, including Anthropic, Meta Platforms Inc., and SpaceX.

“We certainly believe NVIDIA without Jensen is not the same NVIDIA. That said, this is an exceptionally well-run organization with extraordinary engineering depth, a deeply entrenched ecosystem, and demand for its products that continue to significantly outpace supply. None of those fundamentals have changed,” said Lior Prosor, a partner at Deep33.

While no CEO is irreplaceable, the sudden ouster of Jensen Huang poses significant operational risks.

Tech analyst Jack Gold noted that NVIDIA lacks a clear succession plan because Huang largely structured the company around himself without an obvious leadership team to step in. The abrupt exit could disrupt management performance, bottleneck research and development, and slow new technology deployments. Over time, these internal challenges could allow rivals to catch up and erode NVIDIA’s market dominance.

“The bottom line is uncertainty,” Gold said, noting that markets and customers paying a premium to work with the chipmaker dislike instability.

“Other U.S. tech leaders are now going to have step in up even more as visionaries with Jensen gone, including Nadella, Sundar, Cook, Dario, Zuckerberg, Altman, Karp, Jassey, Su, Nikesh, Kurtz and many others,” said Wall Street analyst Dan Ives, who lowered his price target on NVIDIA shares to $225 from $300 following Huang’s exit. In previous notes to investors, Ives often referred to Huang as the “Godfather of AI.”

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The expansion would more than quadruple the number of programmable qubits per processor. IBM is designing r3 to run circuits with 10,000 quantum operations, compared with more than 7,500 demonstrated on r2. Each r3 chip would contain 2,034 physical qubits in all.

Making the chips work together will require 10 L-couplers per r3 processor, IBM-developed superconducting links that transfer quantum information between chips. In October, IBM used four L-couplers to connect two Nighthawk r1 processors, reporting 99% average state-transfer fidelity. The company aims to improve that figure to 99.9%.

IBM is also preparing the cooling infrastructure needed for linked processors. In August, it tested two custom cryogenic modules joined into a shared cooling environment. They reached below 15 millikelvin, roughly −459.6°F, less than 0.03°F above absolute zero. Each module’s larger enclosure provides up to 12 times as much wiring space as IBM’s other quantum systems, making room for the connections needed to control and link more processors.

For researchers, last week’s Chicago installation is a working predecessor to the proposed 2027 machine. IBM unveiled the Nighthawk r2-powered Quantum System Two at the University of Chicago’s Hyde Park Labs on Nov. 6, offering hardware for research into drug discovery, power grid optimization and high-energy physics. The r2 processor delivers up to 100,000 measurement samples per second, 25 times the throughput of IBM’s earlier Heron processor, according to the company.

IBM says partners including E.ON, Algorithmiq and Q-CTRL have completed more than 34 billion quantum circuit executions on r2. E.ON reported a 15-fold speedup over Heron for an electric grid machine learning workload, while an experiment with Algorithmiq executed quantum circuits eight times faster than on Heron.

IBM is also adding classical high performance computing resources to its Quantum Platform. Researchers can now connect quantum workloads to their own computers or supercomputers, or use classical computing resources available directly through the Platform. IBM says Cleveland Clinic and RIKEN used the expanded platform to automatically process 608 million quantum measurement samples, completing the work 33 times faster than manual processing.

Separately, on Nov. 5, IBM, Oak Ridge National Laboratory and AMD announced a research platform at IBM’s Poughkeepsie facility pairing Nighthawk r2 with ORNL’s Umbra HPC system. IBM says the co-located hardware reduces delays between quantum measurements and the classical calculations used to identify errors and guide further operations.

That integration of quantum and classical computing will be demonstrated at SC26 in Chicago next week. IBM and University of Illinois Urbana-Champaign researchers, working with the National Center for Supercomputing Applications, plan to study electronic conductivity in quantum materials using IBM Quantum System Two and NCSA’s GPU-powered DeltaAI supercomputer.

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The Mirantis Agent Platform comes with a set of built-in Prism agents and third-party agents to proactively detect production issues, diagnose root causes and propose fixes. IT teams can also work with forward deployed engineers (FDEs) that Mirantis has previously made available to build additional AI agents to automate additional IT operational workflows. The platform also integrates with existing developer tools to enable IT teams to manage any AI agent in any IT environment.

Ronen Kofman, vice president of product management for enterprise at Mirantis, said the overall goal is to make it possible to safely deploy AI agents that will not, for example, inadvertently delete a production database. IT teams are able to define what each agent can access and then deploy them in an isolated sandbox to limit unauthorized access or other rogue behaviors that, if they do occur, can be immediately terminated. IT teams can also require a person to approve proposed fixes before agents apply them and set spending limits at the organization, project and individual agent levels. Additionally, audit trails record every agent action to support operational reviews, incident investigations and compliance.

In general, IT teams are struggling to inject AI agents that generate probabilistic outputs into IT workflows that are largely deterministic in the sense they need to be executed the same way every time. AI agents that are not properly constructed will also require constant supervision, noted Kofman. Too many IT teams are deploying AI agents in sandboxes without realizing that a sandbox is only one piece of a larger system that needs to be deployed, he added.

AI agents deployed by different members of an IT team are also likely to come into conflict with one another. In effect, IT teams that build their own AI agents without an appreciation for the best practices and sandboxes needed to manage and secure them are creating a recipe for disaster, said Kofman.

Many of those IT teams are also in danger of becoming overly dependent on a small number of engineers that are the only ones on the team that know how to maintain those AI agents, he noted. If those engineers for some reason wind up no longer working for the organization, then the investments made in AI agents are for all intents and purposes lost, said Kofman.

It’s not clear how many AI agents that IT teams have deployed themselves but most are clearly experimenting. It’s becoming apparent that IT teams will not be able to manage applications at scale in the AI era without relying more on AI agents. The challenge is acquiring and retaining the expertise required to successfully deploy what might easily become thousands of AI agents.

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The IBM Quantum System Two is now operating at the University of Chicago’s Hyde Park Labs, where IBM, the university and Illinois officials introduced it on Nov. 6. It is IBM’s first quantum computer installed in Illinois and will serve as the main hardware platform for the National Quantum Algorithm Center, established in 2024 to bring together companies, universities and national laboratories to develop and test quantum algorithms for practical applications.

The IBM Quantum System Two (Image courtesy of IBM)

Inside the new system is IBM’s Nighthawk r2, a quantum processor with 120 qubits linked by 218 tunable couplers. The connections form a square lattice that gives most qubits four nearby neighbors to interact with. IBM introduced the Nighthawk processor in 2025 and announced the updated Nighthawk r2 in August. The newer chip uses faster qubit resets to execute up to 25 times as many circuits per second as IBM’s earlier Heron processors, according to the company.

The new machine will support several industry research projects already underway. IBM says AbbVie and Deloitte are working with IBM and Northwestern University on quantum molecular simulations for drug discovery. The Electric Power Research Institute and the University of Illinois Urbana-Champaign are exploring whether quantum algorithms could improve power grid efficiency. Fermilab is also collaborating with IBM on high-energy physics and distributed quantum computing.

In July, IBM and University of Chicago researchers reported achieving quantum advantage in an experiment involving 70 logical qubits. They completed a calculation in about 15 minutes that they said was beyond the practical capabilities of leading classical simulation methods. The experiment also introduced a method for assessing the reliability of the results, addressing a persistent challenge in quantum computing.

Hyde Park Labs will serve as the computer’s temporary home until the Illinois Quantum and Microelectronics Park is ready. The research campus, under construction on Chicago’s South Side, will eventually house both the computer and the National Quantum Algorithm Center. IBM has not announced a relocation date.

The Chicago installation is one of several major quantum developments IBM has announced this year. In September, its subsidiary Anderon finalized an agreement for up to $1 billion in federal funding under the CHIPS and Science Act to support quantum chip manufacturing research. That same month, IBM and Lockheed Martin announced plans for another Nighthawk r2-powered Quantum System Two in Switzerland, expected to become operational by the end of this year.

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This is especially true in end-user computing (EUC), where platforms such as Citrix can span application delivery, virtualization, networking, security and user experience. When costs climb, the instinct is often to negotiate harder, cut licenses or look for an alternative. But before doing any of those things, IT leaders should ask a more important question: Are we getting enough value from everything we’re already paying for?

Measure What You Use

Any cost review should begin with actual consumption. Flexera’s 2026 State of ITAM Report found that complete visibility into IT assets has fallen to just 36%, even as organizations face growing pressure to control technology spending. Not surprisingly, 78% of ITAM teams now identify maintaining an accurate inventory of licensed software as a top responsibility. Among advanced organizations, the percentage reclaiming unused software jumped from 59% to 79% in just one year.

In an EUC environment, license counts tell only part of the story. Look at active users, peak concurrency, application usage, session patterns and infrastructure consumption. Have employees changed roles? Has the workforce grown or contracted? Are licenses assigned to people who rarely use the service? Renewing based on what you bought several years ago rather than what you consume today simply carries old assumptions into a new contract.

Find What You’re Missing

Unused licenses are obvious waste, but unused entitlements can be just as costly. Bundled enterprise agreements increasingly include functionality that organizations may be purchasing separately from another vendor. Depending on the Citrix agreement, for example, capabilities associated with NetScaler, XenServer, Workspace Environment Management, Autoscale and other technologies may already be available but underused.

Sometimes the way to reduce software costs is therefore to use more of what you’re already buying. Map capabilities across the technology stack rather than reviewing each product in isolation. Look for places where multiple vendors provide similar functionality and determine whether existing entitlements can replace separate infrastructure, management, monitoring or security products.

This is also where an experienced solution provider can add significant value. Internal teams understandably know how they use their environment, but they may not have deep visibility into every capability included in a changing licensing agreement or how other organizations are taking advantage of those capabilities. A provider with specialized platform expertise can go deeper than a license-counting exercise, examining actual consumption, architecture and configurations alongside current entitlements. That can uncover opportunities to right-size what you’re buying, activate capabilities you’re already entitled to use, or eliminate redundant tools elsewhere in the stack. The objective isn’t consolidation for its own sake. It’s making sure you’re extracting the greatest possible value from what you already own.

Attack the Total Cost

A lower license price doesn’t necessarily mean a lower-cost environment. The FinOps Foundation’s 2025 research, based on 861 respondents responsible for roughly $69 billion in public cloud spending, identified workload optimization and waste reduction as the top FinOps priority. According to the 2026 State of FinOps Report, 90% of FinOps teams surveyed were managing or planning to manage SaaS spending, and 64% were doing the same with licensing.

The same thinking should be applied to EUC. A virtual application environment might have perfectly optimized license counts while wasting money on excess compute, idle resources, redundant infrastructure or inefficient configurations. Instead of isolating the software renewal, calculate the cost of delivering the service as a whole, including licenses, cloud or datacenter infrastructure, supporting tools and the people required to operate it. The biggest savings opportunity may have little to do with the price on the renewal quote.

Build for What’s Next

Rightsizing too aggressively around today’s environment can create tomorrow’s problem. Before signing a multi-year agreement, consider likely changes in workforce size, cloud strategy, datacenter footprint, security requirements and M&A activity. Potential cloud migrations, datacenter consolidation, acquisitions and new security mandates should all factor into renewal decisions.

The goal isn’t to predict the future perfectly, but to preserve flexibility. Model what happens if the workforce grows or contracts significantly, workloads shift between on-premises infrastructure and cloud, or the organization needs capabilities currently purchased separately. A slightly more expensive agreement that gives the business room to change can ultimately cost less than a rigid contract built around assumptions that quickly become obsolete.

Rethink Who Runs It

The people required to operate an environment are another major part of its cost. Complex EUC platforms require expertise across upgrades, performance, capacity, security, troubleshooting and architecture, and maintaining all of those skills internally can be difficult when IT teams are already stretched across an expanding technology estate.

Managed services should therefore be considered as part of the optimization strategy, not simply as an outsourcing decision. Underscoring this, KPMG research identifies access to global talent as one of the leading criteria organizations consider when selecting managed services providers.

The relevant question isn’t simply whether an internal team can operate an EUC environment. It’s whether doing so is the best use of scarce internal resources. Specialized managed services can provide deeper expertise without requiring organizations to staff every discipline themselves. They can also make optimization continuous rather than something that happens once every few years at renewal, helping identify configuration issues, underused capabilities and opportunities to improve efficiency as the environment changes.

Start Earlier

Waiting for the renewal quote is waiting too long. For complex EUC agreements, planning should begin months before expiration. Starting four to six months ahead can provide enough time to assess usage, understand entitlements and evaluate potential platform changes.

Use that time to establish baseline consumption, identify unused licenses and entitlements, map overlapping tools, model future requirements and calculate the resources required to operate the environment. Bringing in an expert solution provider early can also provide an independent view of where the organization is overspending, underutilizing its existing investments or overlooking capabilities that could improve the environment before the next contract is signed.

Optimize Value, Not Just Price

Rising subscription costs can provide a useful forcing function. Rather than focusing solely on negotiating a smaller increase, organizations can use the renewal to rethink consumption, eliminate duplication, activate capabilities they already own, optimize supporting infrastructure and reconsider how the environment is operated.

The most useful question at renewal isn’t, “How much can we get the vendor to take off the price?” It is, “If we were designing this environment today, would we buy and operate it the same way?” Answering that question may require expertise beyond procurement or even the internal IT team. But it can also reveal savings and value that negotiating another few percentage points off the renewal never will.

About the Author

Todd Hsu founded TH Consulting, one of the original Citrix Partners, which was later acquired by Citrix. With 27 years of experience in the Citrix ecosystem, including Director of Citrix Consulting and Citrix Education, he has held significant roles in the EUC space before his current role as President of Ferroque Systems, specializing in customer engagement and strategic development within the Citrix landscape.

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