I want to continue sharing my thoughts on data centers because the issue not only motivates voters across party lines but is also shaping up to be a defining election issue in states experiencing heavy development.
First, the backlash is real. While researchers have documented Chinese, Russian, and Iranian efforts to inflame the debate, about three in five Americans now oppose a data center in their community, with majorities opposed across party lines. Given how much rides on America staying dominant in the AI race, politicians should take real steps to address household concerns and limit the damage these billion-dollar corporations might do in their scramble for market share.
Start with the competing motivations. Corporations want to build because of the revenue at stake; AI is lucrative and getting more so. The government wants American AI development to continue because of the military implications and broader economic growth. But the average American would much rather neither lose their job to AI nor have a monolithic data center go up in their backyard, especially when research finds that permanent employment opportunities at these facilities are relatively low.
But this is the new industrial revolution, and it is moving fast. The United States already has more than 3,000 operational data centers, and more than 1,500 are in various stages of development. Federal, state, and local governments are facing a blitz of projects from corporations that have spent decades perfecting lobbying and legal maneuvering. We're in a period of public revolt, and state regulation is following. I'd argue the political system is working as intended.
Setting aside for now whether any of it is wise, some politicians are calling for strict moratoriums while others propose more moderate reforms. While Trump campaigned in 2016 on punishing companies, specifically ones that moved jobs overseas, he now supports data center growth rather blindly. This position puts him at odds with Republicans who are turning against projects that have angered voters. The party's own Senate campaign arm calls data centers a sleeper issue for the midterms.
That could cost Republicans in November, and maybe even in 2028.
Below is a thought exercise. After hearing many complaints about data centers, I wrote out what I think should be happening: common-sense solutions that protect the public interest without bringing innovation to a grinding halt. Then I did the research to see whether these common-sense fixes are being proposed anywhere.
I should also note that my solutions would place a heavy burden on data center construction, which may seem unfair compared with the regulations manufacturing plants and other industries face. My reasoning is that data centers are extractive by nature. Once construction ends, they bring relatively few benefits or permanent jobs to a community unless they offset that burden with tax revenue or other tangible benefits.
WHAT GOVERNMENTS SHOULD DO
Immediately create a task force to study data centers and recommend policies.
Require data centers to fund decommissioning and cleanup (if the industry crashes) before construction.
Bar utilities like power and water companies from favoring data centers over households.
Ban secret, deceptive land purchases through NDAs and shell companies.
Ban eminent domain for data-center construction when other land is available and the need is nonmilitary.
Make data centers liable for nearby water-supply, pollution, and noise problems.
Encourage nuclear research and construction to power data centers.
WHAT GOVERNMENTS ARE DOING
Create a task force to study data centers and recommend policies. State and local efforts are emerging; no comparable federal task force.
Require data centers to fund decommissioning and cleanup before construction. Emerging at the state level. Michigan
Bar utilities from shifting data center costs to households. Already happening in multiple states.
Ban secret land assembly through NDAs and shell companies. NDA restrictions are emerging, while broader shell-company transparency remains limited. Delaware
Ban eminent domain for data-center construction. Emerging at the state level. North Carolina
Make data centers liable for nearby water-supply, pollution, and noise problems. Ohio is already proposing this within a five-mile radius. South Carolina has a bill imposing strict liability for environmental and public-health harms caused by data centers, along with at least $50 million in environmental bonding. But new federal proposals would exempt data centers from public-input requirements related to air pollution.
Encourage nuclear research and construction to power data centers. Already happening federally. White House
GOVERNMENTS ARE ALSO TRYING TO
Make data centers bring, build, or buy their own power. Federal pledge and state proposals. White House
Require data centers to guarantee payment for infrastructure built for them. Enacted in some states. New Jersey
Make data centers use less power before homes lose electricity during grid emergencies. Texas has adopted this policy. Texas
Require data centers to report how much water and electricity they use. Federal and state lawmakers have proposed this. Federal bill
Temporarily stop new data centers while new rules are developed. Enacted statewide in New York for hyperscale projects. New York
End or restrict tax breaks for data centers. State-level proposals. Georgia
Require public notice, meetings, and stronger local approval for data centers. State policy. Pennsylvania
Restrict utility service to data centers controlled by foreign adversaries. State-level policy. Florida law
Require greater energy efficiency and encourage reuse of data-center waste heat. State-level policy. New Jersey
Require a local referendum before a data center can be built. Happening in Ohio.
Require professional noise studies before construction. Happening in Michigan.
From the National Conference of State Legislatures: This year alone, "39 states introduced legislation tied to data centers and power, 31 considered bills addressing water use, and 15 looked at moratoriums or bans."
Of course, the free market is at play here too, responding to voters' concerns. Microsoft has stopped asking local governments to sign NDAs, and tech companies are offering greater community engagement and transparency as the backlash grows. Microsoft has also pledged to cover its electricity costs, minimize water use, create local jobs, and stop seeking local property-tax reductions. Operators are testing designs that can reduce peak demand, while closed-loop cooling can cut day-to-day water consumption.
THE SYSTEM AS INTENDED
To sum it all up, there are real reasons to oppose data centers, including job displacement from AI, harmful changes to neighborhoods and surrounding areas, and households potentially being left worse off. There are also real reasons to support them: innovation, progress, and military necessity.
There is also a certain hysteria—the idea that data centers spell doom and that Big Tech is steamrolling community after community while politicians do nothing. That may have been closer to the truth a few years ago, at the dawn of these projects. It is not now. If anything, the American system, the eternal contest between industry and government, appears to be working as intended.
