Data centers are expanding rapidly across the country to meet growing demand for AI and cloud computing, with capacity projected to triple by 2030. The siting of these facilities has sparked debate in communities nationwide over transparency in decision-making, economic benefits, electricity costs, and environmental impacts. This brief provides an overview of the opposition over data center siting decisions, looking into key arguments for each, allowing the reader to evaluate competing claims when this issue comes up in local and state policy discussions

Data Center Growth and Location

What Are Data Centers, And Why Do They Matter?

Data centers are facilities that house the computer servers and equipment that power the internet, cloud storage, Artificial Intelligence, streaming services, and social media. When you use Google, stream Netflix, or store photos in the cloud, you’re accessing a data center. While data centers date back to the 1940s, they’ve grown dramatically in size and electricity consumption in recent years, largely driven by the rise of AI and cloud computing.  Not all data centers are alike—they vary in size and purpose. The facilities generating the most community debate are ‘hyperscale‘ data centers—massive facilities operated by major tech companies like Google, Meta, and Amazon to power AI, cloud computing, and online services. 

Scale of Growth

Global electricity demand is forecasted to rise by 3,500 TWh through 2027, which is equivalent to adding more than the total annual electricity consumption of Japan each year. Data centers are less than 10% of the growth, but have a massive concentrated impact. Data center electricity consumption is projected to double to around 945 TWh by 2030, representing just under 3% of total global electricity consumption.

Where are Data Centers Located?

The concentration of data center impacts raises a critical question: which communities 

are bearing this burden? Figure 1 shows analysis using the Climate and Economic Justice Screening Tool (CEJST) shows that approximately 1,260 data centers (roughly 20%) are located in disadvantaged communities—areas identified by the federal government as marginalized by underinvestment and overburdened by pollution. This includes both existing facilities and top largest AI-focused (frontier) data centers. 

Figure 1: CEJST, 2026; Epoch AI, 2025; IM3 Open Source Data Center Atlas, 2025

Why Do Critics Oppose Data Center Development?

$64 billion of data center projects have been blocked or delayed due to local opposition. This opposition is bipartisan and widespread.

Bipartisan Opposition and Community Concerns

A review of public statements by elected officials who have taken public positions on large data center projects found that 55% were Republicans and 45% were Democrats. Though the specific concerns emphasized often differ by party—Democrats focus on environmental impacts while Republicans cite opposition to tax abatements. However, concerns over power consumption and grid strain have gained support across the political spectrum. Because most permitting decisions are made at the local level, even federal support for data centers cannot prevent local opposition from blocking or delaying projects. This skepticism extends beyond elected officials. While a majority of Americans support further data center construction, most are skeptical of projects in their communities, citing concerns about environmental impact, energy consumption, increased traffic, NIMBYism, and land use disruption.

The Double Burden: Electricity Costs and Pollution

Communities near data centers face disproportionate economic burdens. While residential electricity rates increased 5.2% nationally in 2024, Bloomberg’s analysis of tens of thousands of U.S. locations found that areas with significant data center activity experienced increases of up to 267% over five years. A research and consulting firm mentions that the increase is part of the data center boom. The surging demand is straining resources. 

Data centers also present environmental and health concerns. In January 2026, the EPA ruled that xAI operated methane gas turbines without air quality permits at its Memphis data center for over 18 months, exploiting a regulatory gap. Prior research reveals that data centers could contribute to 1,300 premature deaths annually by 2030, with disadvantaged communities facing a per-household health burden 200 times greater than less-impacted areas. Many of these disadvantaged communities already bear disproportionate pollution burdens from existing industrial facilities, meaning data center expansion compounds longstanding environmental justice concerns.

Why Do Proponents Support Data Center Development?

Economic Arguments: Jobs, Revenue, and Community Benefits

Proponents argue that data centers provide significant economic benefits through job creation, tax revenue, and infrastructure improvements such as expanding broadband access. In response to growing opposition and concerns for community siting burdens, Microsoft announced a community-first AI infrastructure initiative (Figure 2), anchored in five commitments: paying to ensure data centers don’t increase local electricity prices; minimizing water use and replenishing more water than consumed (for example, through leak detection partnerships and wetland restoration); creating jobs for local residents (such as the 1,300+ construction workers and 650+ operational employees in Washington state); contributing to the tax base for hospitals, schools, parks, and libraries; and investing in local AI training and nonprofits.

Figure 2: Microsoft, 2026

However, critics argue that actual benefits often fall short of promises. For example, in Ohio, data centers generally employ fewer than 150 permanent workers. In Tucson, local justice groups documented that Project Blue’s job creation has not matched contractual employment obligations, with actual employment figures falling below promised levels. Some activists argue that grassroots resistance reflects deeper concerns beyond what community benefit agreements can address. This resistance reframes data center development as part of broader questions about land rights, corporate extraction, and who controls decisions about community futures.

The Likely Future of Data Center Development

Data center development presents competing claims about costs and benefits. While proponents cite economic development and infrastructure needs, evidence of electricity rate increases, environmental impacts, and job creation shortfalls has fueled growing opposition. Yet the scale of planned development is staggering. According to state and local filings, U.S. data center computing capacity could jump by close to 1,000% if all currently planned projects come to fruition. In Texas alone, utilities project data centers will require more than 86 gigawatts of power by 2031—roughly equivalent to the state’s peak electricity usage. Despite this momentum, $64 billion worth of projects have been blocked or delayed over the past two years due to local opposition. How communities, policymakers, and companies navigate these tensions will influence the future of AI infrastructure development.

Frequently Asked Questions