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by AUSTIN DENEAN | The National News Desk
Mounting resistance to the rapid expansion of data centers to power artificial intelligence is spreading into city halls and statehouses, posing a potential challenge for the industry to continue to scale up.
Tech companies have made plans to invest billions and started construction on sprawling facilities across the country to house the infrastructure to power AI applications and services. As AI models get more advanced and adoption becomes more widespread, tech companies need to ramp up processing power to handle the growing workload.
But the industry is running into intense voter pushback that is starting to turn into political issues ahead of this year’s midterm elections.
Republican Texas Gov. Greg Abbott became the latest elected official to propose new restrictions on data centers, calling for water efficiency requirements and repealing tax incentives. He also asked the state’s utility regulators to “take immediate steps” to safeguard Texans from economic ramifications of the projects like higher energy bills.
“Data centers must operate in ways that reduce costs for residential electricity customers, do not drain water needed for our communities and take into consideration the needs of our neighborhoods,” Abbott said in a statement.
Texas is approaching surpassing Virginia as having the most data centers in the U.S. and has welcomed the influx of tech investment into the state. Other states that have held up the centers as an economic boon have also started to backpedal with calls or plans to roll back tax breaks or other subsidies.
Backlash against data centers has spiraled into more than 100 proposed moratoriums at all levels of government across the U.S. calling for temporary pauses in permitting or construction, while some call for outright permanent bans. Dozens of cities and counties have already implemented temporary restrictions, though statewide proposals have generally struggled to advance.
At the federal level, Sen. Bernie Sanders, I-Vt., and Rep. Alexandria Ocasio-Cortez, D-N.Y., have proposed a national moratorium on new data center construction until “national safeguards are in place.”
Opposition to the AI buildout is mainly driven by concerns over increased costs being passed down to consumers. Americans have been hammered by years of elevated inflation, making voters particularly sensitive to concerns that data centers could contribute to higher electricity costs.
Goldman Sachs estimated in May that power demand from data centers is expected to double in 2027 compared with 2025 even though only about half of the capacity is scheduled to come online over the next one to two years. Data centers’ share of peak summer power demand is also projected to more than double from 4.1% in 2025 to 8.5% by 2027, squeezing electricity prices and grid stability.
Supporters argue data centers bring construction jobs, property tax revenue and long-term investment while helping ensure the U.S. remains competitive in AI development.
The pushback comes as the Trump administration has framed AI development as a strategic competition with China and encouraged rapid expansion of computing infrastructure needed to support the industry.
Only one-in-three Americans approve the rapid pace of data center construction and 57% said they would oppose one being built in their community, according to a Reuters-Ipsos poll released this week. Just 14% of people said they would be OK with a data center being built near them.
“The expansion of AI and the advancement of the frontier models is a national priority, certainly for the current White House, but also pretty universally, people are saying we want to stay ahead of China, we want to be the innovators,” said John Wihbey, an associate professor of media innovation at Northeastern University and author of “Governing Babel.” “But the cost is going to be that local permitting and even cultural traditions and the character of communities may come under a lot of stress in a very rapid way.”
There are also broad concerns about the impact AI will have on the availability of jobs after numerous predictions of massive economic upheaval as the technology develops and more companies adopt it. Half of Americans in the Reuters survey fear AI could put them or someone in their household out of work.
Fears of higher costs and a harder time finding work are creating a challenging political dilemma for the industry and politicians to navigate.
The industry has attempted to quell some of the public opposition by signing onto pledges to minimize the impact data center construction will have on taxpayers, promising to build their own power generation plants and covering the costs of infrastructure upgrades to connect to the grid.
But industry groups have also poured millions into the midterm elections, backing candidates who are supportive of America’s AI build-out or opposed to regulations. How and whether to regulate AI has been a mixed bag for lawmakers in Washington with an initial push to create guardrails for the industry taking a backseat since Trump returned to office in favor of allowing it to grow.
“This is happening so fast and the demand from the AI companies for more power and energy is so enormous right now that we're not really able to kind of rationally sort this out in the normal back-and-forth process that takes sometimes years,” Wihbey said.
Whether policymakers can balance voter concerns with the race to build AI infrastructure may become one of the first major political tests of the AI era.
2026 Sinclair, Inc.
