Overwatch Capital and Idemitsu announce 1 GW partnership for high-density AI data centers: what this means for developers and builders
Overwatch Capital and Idemitsu Kosan Co., Ltd. have formed a strategic partnership to support next-generation, energy-resilient AI data centers across ten U.S. states. Idemitsu will launch nationwide natural gas supply operations in the U.S. and provide firm fuel to on-site generation that can support up to 1 gigawatt of power. Sites will run in grid-connected and private-grid configurations, reducing interconnection risk while prioritizing uptime.
The plan combines Overwatch's SIDE Platform-on-site natural-gas generation, battery energy storage (BESS), advanced cooling, and proprietary energy management-with Idemitsu's energy supply and services. The target tenants: hyperscalers, GPU-cloud providers, and institutional investors that need high-density AI compute at scale.
Where this is coming to market
Target states include Ohio, Texas, Illinois, Utah, Colorado, Arizona, Georgia, Nevada, South Carolina, and Pennsylvania. Expect parallel builds and standardized designs, with an emphasis on rapid site delivery.
For site selectors and owners, the short list tightens around: gas pipeline proximity and capacity, grid optionality, water access (or validated waterless designs), and zoning that supports large-scale data and energy assets.
Power strategy you can actually build around
The partnership pairs firm natural gas supply with on-site power and BESS for microgrid independence. Dual private-grid and grid-supplied models aim to speed delivery while maintaining resilience. This is a practical answer to interconnection delays and transformer lead times.
Overwatch's facilities will support next-generation GPU clusters, liquid-cooling systems, and ultra-high rack power densities. That translates into higher floor loading, specialized MEP, and different heat rejection profiles than traditional data centers.
What's in scope for Idemitsu
Idemitsu will supply natural gas to on-site generation and evaluate additional services: immersion cooling technologies, diesel for backup, and battery storage solutions. The company brings decades of energy and industrial operations experience across Japan and international markets to the U.S. buildout.
Why this matters to real estate and construction teams
- Speed to power: Private-grid options reduce reliance on long interconnection timelines.
- Higher density, different rules: Liquid cooling and ultra-high rack loads change structural, MEP, and commissioning requirements.
- Bankability: A single platform that integrates fuel, generation, and data infrastructure is easier to finance and replicate across markets.
- Pipeline visibility: Ten states with a common playbook-predictable scopes, repeatable procurement, and room for modularization.
Key platform features called out by Overwatch
- Mission-critical resiliency with multi-layered backup and microgrid independence.
- High-integrity environments engineered for enterprise and cloud-scale operations.
- Natural-gas generation paired with BESS to reduce carbon intensity and stabilize operations.
- Comprehensive energy services: low-emission molecules, fuel cells, immersion cooling, and diesel backup supported by Idemitsu.
- Rapid expansion enabled by Idemitsu's U.S. energy operations for simultaneous multi-market deployment.
- Grid flexibility with dual private-grid and grid-supplied models to cut interconnection risk.
Financing and timeline
Marathon Capital served as exclusive financial advisor to Overwatch in forming the partnership and will lead structuring and capitalization at both corporate and project levels. Overwatch expects to start two projects in 2026: Resilience Dallas-Fort Worth and Resilience Columbus (Ohio).
What owners, developers, and GCs should do next
- Pre-vet parcels: 50-200+ acres near gas transmission or robust LDCs, fiber routes, and permissive zoning. Validate substation proximity, but don't rely on it.
- Confirm gas realities: Capacity, pressure, interconnect costs, easements, and construction windows. Lock a fuel supply agreement early.
- Plan for cooling: Liquid or immersion cooling shifts structural loads, floor penetrations, fluid handling, and maintenance access. Align with OEM specs.
- Permits and compliance: Air permits for on-site generation, BESS safety compliance, sound studies, and water rights where used.
- Modularize: Standardize electrical rooms, skids, and heat-rejection blocks. Shorten commissioning with repeatable test scripts.
- Supply chain: Long-lead items include switchgear, transformers, engines/turbines, heat exchangers, and BESS. Place framework orders across the portfolio.
- Community engagement: Build early relationships with local authorities and emergency services for BESS and on-site generation safety plans.
Helpful references
What the teams said
"This partnership sets a new standard for high-density, low-carbon AI data centers, empowering our clients to deploy class-leading compute at scale through Overwatch's SIDE Platform while advancing resiliency and sustainability in the communities we serve," said Sean Lyle, Managing Partner, at Overwatch Capital.
"This collaboration with Overwatch Capital marks an important step in connecting reliable, lower-carbon energy with next-generation data infrastructure. Demand for electricity to support AI is expected to grow, and through our natural gas supply operations in the United States, we are committed to providing sustainable and efficient energy solutions that contribute to the advancement of an AI-enabled society," said John H. Happ III, Senior Vice President of Idemitsu Americas Holdings.
"This collaboration represents the convergence of two global capabilities - Idemitsu's dependable energy support and Overwatch's ability to integrate that energy directly into the compute layer," said Gerry Willinger, Managing Director at Marathon Capital. "By combining deep energy market expertise with digital infrastructure innovation, Idemitsu and Overwatch are building the physical foundation to enable AI scale - positioning Overwatch as a key partner and gateway for tenants seeking resilient, financeable, and scalable energy solutions," added J. Patrick Brandt, Vice President at Marathon Capital.
Companies
Overwatch Capital focuses on sustainable digital infrastructure. Its SIDE Platform and Resilience Series data centers integrate energy and compute for high-demand AI and cloud workloads.
Idemitsu Kosan Co., Ltd. is one of Japan's largest energy and industrial companies, active in fuels, petrochemicals, high-performance materials, lubricants, renewables, and advanced energy services. Through Idemitsu Americas Holdings, the company is expanding U.S. natural gas supply operations and data center energy services.
Marathon Capital is an investment bank dedicated to the clean economy, advising across M&A, ECM, DCM, tax credits, offtake, and energy transition. Headquarters in Chicago, with additional offices across the U.S. and internationally.
Contacts
- Overwatch Capital - Megan Hulsey, Director of Marketing - megan@overwatchcap.com
- Idemitsu Americas Holdings Corporation - John H. Happ III, Senior Vice President: Gas & Power - John.Happ.0110@idemitsu.com
- Marathon Capital - Andrea Rosko, Head of Marketing & Communications - arosko@marathoncapital.com
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