Over 500 jurisdictions across the US are slamming the brakes on construction of massive data centers, threatening the US’ position in the AI race against countries like China.
More than 150 localities passed bans last month alone, as tech giants and developers face a tsunami of opposition from local Luddites, news site The Information found.
Over the summer, activists protested from Fredericksburg, Va., to Tyler, Texas, and beyond to voice their opposition to planned data centers. They cited concerns like the environmental impact and energy consumption of the gargantuan sites.
“There’s a pretty strong sense that local people want to oppose these and part of it is the tech bros are forcing AI on us,” Paul Triolo, a partner at consulting firm DGA-Albright Stonebridge Group, told The Post.
“The popular message around AI is like pretty pretty negative. Part of the game is changing that public narrative. We’re saying, ‘Hey, there may be a way to solve this problem that’s good for both sides.”
The backlash is not confined to the local level, and two states have pushed back against data center growth. New York Gov. Hochul, a Dem, enacted a one-year moratorium on new data centers. Texas is taking a less strict approach, with Gov. Greg Abbott, a Republican, implementing a pause so state agencies can audit projects. There is no end date for the hiatus.
In the meantime, developers are getting vilified.
“A lot of folks who challenge any kind of development project, they think developers and the nefarious lawyers like us want to come in and just bulldoze people,” said Robert Loftin, a lawyer who represented a data center builder in a Northern Virginia dispute, told Bloomberg.
The Post reported in April that one AI data center developer weathered vicious online attacks, lawsuits and even Luigi Mangione-inspired death threats as he sought to build a behemoth AI project in southern California. The fiery opposition has delayed the project, which would be California’s largest data center, according to the developer.
The hurdles are proving to be a major thorn in the side of AI firms. Only about 50 to 60% of data center capacity is expected to come online on time over the next two years due to delays and cancellations, according to Goldman Sachs Commodities Research.
And experts warn the fierce opposition could hamstring US efforts to stay in front of rival China in advancing AI.
The White House has been drafting a ban on US imports of new models of Chinese data center components, Reuters reported earlier this month.
For his part, President Trump – who has said data centers could be bigger than oil – has sought to quell the domestic opposition. Last month, he championed a voluntary pledge signed by governors and electricity companies to shield US consumers from higher utility bills from data centers.
“AI is probably the biggest thing anybody’s ever seen, and whoever wins that race is probably going to win, period,” the president said in remarks at the Environmental Protection Agency as part of the pledge signing.
Roughly 60% of data center capacity planned to come online in 2027 hasn’t even begun construction, according to JPMorgan. That’s despite some $750 billion in AI infrastructure investments this year alone.
Triolo said business at his firm advising tech clients on navigating layers of bureaucracy and local concerns has exploded.
“It’s gone from basically nothing to now we’re seeing a much bigger business opportunity here,” he told The Post.
His Washington DC-based firm recently launched a practice dedicated solely to helping clients, including energy companies and server infrastructure firms, cut through the mounting challenges of the AI buildout, Triolo added.
He said that while widespread bans on data centers across the country surely hamper the US’s ability to compete with China, the bans seen so far likely won’t impact the US’s position in first place. He noted Texas and other states are taking a more friendly approach to data centers.
In the Lone Star State, energy companies in Texas’s Permian Basin, the country’s largest oil field, are exploring leasing land to data centers and selling them the needed water and construction materials with the hopes that the region’s plentiful land, cheap energy and business friendly environment will be a draw.
Chevron struck one such agreement with Microsoft in June for what could become one of the country’s largest AI data centers in West Texas.
But even Texas is seeing rising opposition. Gina Hinojosa, the Democratic nominee for Texas governor, has sounded off on data centers, saying they are “owned by the richest men in the world … We’re all footing the bill. There are no rules. It is the Wild West of data centers.”
In spite of the opposition, the data center buildout is slated to be massive: there were 5,427 data centers in the US at the end of last year, according to Stanford University’s AI Index Report. That number is set to nearly double as AI companies have announced plans for about 4,000 new US data centers, according to data center research firm Aterio. Of those, 802 are currently under construction.
Credit: Source link
