The year is 2040. Data centers have proliferated across the Central Valley, powering multibillion-dollar artificial intelligence companies in Silicon Valley. To meet their soaring energy needs, hundreds of miles of new electric transmission lines have been built, along with battery storage facilities. Some of these data centers get their power from the grid, while others attach directly to a new power source: clean energy generated by the California High-Speed Rail Authority.
This is the vision Ian Choudri, who took the helm of the rail authority last year, has been outlining in closed-door meetings with elected officials and at industry forums. The long-delayed bullet train, he contends, is more than a transportation project. It’s an energy corridor, a catalyst for real estate development and a key piece of powering the state’s artificial intelligence boom and clean energy ambitions.
This pitch is part of an effort to bring in private capital to rescue a project that has become something of a cautionary tale of American infrastructure and bureaucracy. Approved by voters in 2008 as a $10 billion bond measure to connect Los Angeles and San Francisco with high-speed rail, the project didn’t break ground until 2015, and the final price tag has swelled from $33 billion to as much as $128 billion.
Currently limited to a Merced-Bakersfield segment scheduled to open in 2033, the project has struggled to secure stable financing. In July, the Trump administration said it would pull $4 billion in federal funding slated for the project.
Choudri is tasked with achieving what his predecessors could not: luring private investment to help fill the financial hole. He’s also asking the state to commit to a dedicated revenue stream over the next 15 to 50 years — a precondition, he says, for attracting capital from private developers.
In exchange, investors would help front construction costs in the short term, while collecting long-term payments from the state and a share of any revenue the rail generates, not just from passengers, but potentially from other sources such as land development, power generation or broadband leases.
The goal is to reposition the rail corridor as a multifaceted utility — one that can carry electricity as well as people, while building the physical infrastructure required to keep California at the center of the AI industry.
“I’m looking at how we can commercialize even further and generate more revenue,” Choudri said in a recent interview with this news organization. “What that means is that we can build more.”
Some see the approach as incredibly risky.
“Private investors would need to be promised a very high rate of return,” said Lee Ohanian, a senior fellow at the Hoover Institution at Stanford University and a critic of how the state has managed the bullet train.
But to Choudri and proponents of the rail within the private industry, alternative revenue streams may be the best hope of reviving the project as a 21st-century asset with benefits beyond mobility — and justifying its extraordinary price tag.
“You’re not just getting a train,” said state Sen. Dave Cortese, a Santa Clara County Democrat. “We’re talking about a project that will spur economic development on a large scale.”
Here are the ideas on the table:
1. The authority is set to build its own clean electricity plants. It could sell excess power.
High-speed rail is meant to be fully solar-powered. Beyond building out the rail line, the authority plans to build around 550 acres of solar farms and battery storage sites along the corridor. The system could end up producing more energy than what is required to power the railway itself.
The opportunity: Sell off the surplus power. One option is to sell the extra energy back to the grid. Alternatively, the rail authority could act as a utility company, providing power directly to customers.
“I’m discussing this with potential partners who are interested in making use of the surplus power to use for data centers in the Central Valley,” Choudri said.
Has it been done? California’s would be the first high-speed rail to run on solar power (with backup energy powered by the grid). But other rail systems have integrated solar and either used or sold the energy.
The Beijing-Shanghai High-Speed Railway built solar panels on the rooftops above its stations and sells excess energy to the grid. And in a public-private partnership with the Belgian rail authority, the solar developer Enfinity covered a 2-mile tunnel between Antwerp and the Dutch border with panels, generating enough electricity to power 4,000 trains a year.
2. Leasing right-of-way to utility companies
One of the most expensive parts of building a high-speed project is acquiring the land for the rail line. But once secured, that long, linear corridor of state-owned land is extremely valuable — not just to the rail authority, but also to public utilities, wireless technology companies and fiber-optic companies. Leasing from the rail company would allow them to avoid the hassle of getting permission from hundreds of landowners and government agencies themselves.
Leases between rail agencies and utilities like this are common, dating back to the early days of the railroad. The Southern Pacific Railroad, for example, commercialized its network of fiber-optic lines, which grew into the telecom giant “Southern Pacific Railroad Internal Networking Telephone,” also known as Sprint.)
The opportunity: The authority could lease its land to companies that want to build broadband, oil and gas, water or electric transmission lines along the train’s pathway.
That could be a big boon to the data center industry, said Sia Kusha, head of project development with Plenary Americas, one of the companies in talks with Choudri about investment.
“Data centers suck the energy grid dry,” he said. “On-site or nearby power generation capacity would be a major attraction.”
The greater energy grid could benefit, too. As farmers in the Central Valley grapple with dwindling water supplies and convert more of their agricultural land into solar farms, energy companies need to build more long-distance power lines to transport that electricity across the state.
Previous examples: Private infrastructure developers are laying a 339-mile transmission cable to carry hydropower from Quebec to New York City, with some stretches laid in railroad right-of-way. BART earns around $11 million a year by allowing telecom company Mobilitie Services to install cables along its tracks.
3. Rail-adjacent real estate
In addition to the miles of land the rail authority has bought to lay tracks, it has also purchased land for future stations, which could become valuable real estate.
The opportunity: The rail authority could lease its land to a developer to build retail, offices or housing around the stations.
“Merced, Fresno and Bakersfield could easily turn into subsets of what we see here in Silicon Valley,” Cortese said.
The rail authority could also capture the growth in land values and property taxes around the stations via special taxing districts. Cortese is sponsoring a bill to study the idea.
Past examples: Washington, D.C.’s I‑395 “Capitol Crossing,” completed in 2021, involved selling development air rights over a highway, raising $120 million upfront for infrastructure improvements. Office and retail developers built a 2.2 million-square-foot project atop the highway.
4. Letting freight service use the railway when passengers aren’t on it.
Most passenger trips take place during the day.
The opportunity: At night, the high-speed rail could allow freight services to use the tracks.
Previous examples: Getlink, the company that owns and operates the Chunnel between France and the United Kingdom, sells access to its rail line to passenger rail Eurostar by day and freight service by night.
At this point, these are just concepts.
In June, the rail authority issued an official request to private infrastructure developers, asking them to propose their own ideas on how to build out the line and generate revenue. The authority is expected to release information about the proposals it received in the coming weeks.
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