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Spotlight

How the Tech Industry Is Responding to Data Center Backlash

It’s aware of the problem. That doesn’t make it easier to solve.

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Data center construction and tech headquarters.
Heatmap Illustration/Getty Images

The data center backlash has metastasized into a full-blown PR crisis, one the tech sector is trying to get out in front of. But it is unclear whether companies are responding effectively enough to avoid a cascading series of local bans and restrictions nationwide.

Our numbers don’t lie: At least 25 data center projects were canceled last year, and nearly 100 projects faced at least some form of opposition, according to Heatmap Pro data. We’ve also recorded more than 60 towns, cities and counties that have enacted some form of moratorium or restrictive ordinance against data center development. We expect these numbers to rise throughout the year, and it won’t be long before the data on data center opposition is rivaling the figures on total wind or solar projects fought in the United States.

I spent this week reviewing the primary motivations for conflict in these numerous data center fights and speaking with representatives of the data center sector and relevant connected enterprises, like electrical manufacturing. I am now convinced that the industry knows it has a profound challenge on its hands. Folks are doing a lot to address it, from good-neighbor promises to lobbying efforts at the state and federal level. But much more work will need to be done to avoid repeating mistakes that have bedeviled other industries that face similar land use backlash cycles, such as fossil fuel extraction, mining, and renewable energy infrastructure development.

Two primary issues undergird the data center mega-backlash we’re seeing today: energy use fears and water consumption confusion.

Starting with energy, it’s important to say that data center development currently correlates with higher electricity rates in areas where projects are being built, but the industry challenges the presumption that it is solely responsible for that phenomenon. In the eyes of opponents, utilities are scrambling to construct new power supplies to meet projected increases in energy demand, and this in turn is sending bills higher.

That’s because, as I’ve previously explained, data centers are getting power in two ways: off the existing regional electric grid or from on-site generation, either from larger new facilities (like new gas plants or solar farms) or diesel generators for baseload, backup purposes. But building new power infrastructure on site takes time, and speed is the name of the game right now in the AI race, so many simply attach to the existing grid.

Areas with rising electricity bills are more likely to ban or restrict data center development. Let’s just take one example: Aurora, Illinois, a suburb of Chicago and the second most-populous city in the state. Aurora instituted a 180-day moratorium on data center development last fall after receiving numerous complaints about data centers from residents, including a litany related to electricity bills. More than 1.5 gigawatts of data center capacity already operate in the surrounding Kane County, where residential electricity rates are at a three-year high and expected to increase over the near term – contributing to a high risk of opposition against new projects.

The second trouble spot is water, which data centers need to cool down their servers. Project developers have face a huge hurdle in the form of viral stories of households near data centers who suddenly lack a drop to drink. Prominent examples activists bring up include this tale of a family living next to a Meta facility in Newton County, Georgia, and this narrative of people living around an Amazon Web Services center in St. Joseph County, Indiana. Unsurprisingly, the St. Joseph County Council rejected a new data center in response to, among other things, very vocal water concerns. (It’s worth noting that the actual harm caused to water systems by data centers is at times both over- and under-stated, depending on the facility and location.)

“I think it’s very important for the industry as a whole to be honest that living next to [a data center] is not an ideal situation,” said Caleb Max, CEO of the National Artificial Intelligence Association, a new D.C.-based trade group launched last year that represents Oracle and myriad AI companies.

Polling shows that data centers are less popular than the use of artificial intelligence overall, Max told me, so more needs to be done to communicate the benefits that come from their development – including empowering AI. “The best thing the industry could start to do is, for the people in these zip codes with the data centers, those people need to more tangibly feel the benefits of it.”

Many in the data center development space are responding quickly to these concerns. Companies are clearly trying to get out ahead on energy, with the biggest example arriving this week from Microsoft, which pledged to pay more for the electricity it uses to power its data centers. “It’s about balancing that demand and market with these concerns. That’s why you're seeing the industry lean in on these issues and more proactively communicating with communities,” said Dan Diorio, state policy director for the Data Center Coalition.

There’s also an effort underway to develop national guidance for data centers led by the National Electrical Manufacturers Association, the American Society of Heating, Refrigerating, and Air-Conditioning Engineers, and the Pacific Northwest National Laboratory, expected to surface publicly by this summer. Some of the guidance has already been published, such as this document on energy storage best practices, which is intended to help data centers know how to properly use solutions that can avoid diesel generators, an environmental concern in communities. But the guidance will ultimately include discussions of cooling, too, which can be a water-intensive practice.

“It’s a great example of an instance where industry is coming together and realizing there’s a need for guidance. There’s a very rapidly developing sector here that uses electricity in a fundamentally different way, that’s almost unprecedented,” Patrick Hughes, senior vice president of strategy, technical, and industry affairs for NEMA, told me in an interview Monday.

Personally, I’m unsure whether these voluntary efforts will be enough to assuage the concerns of local officials. It certainly isn’t convincing folks like Jon Green, a member of the Board of Supervisors in Johnson County, Iowa. Johnson County is a populous area, home to the University of Iowa campus, and Green told me that to date it hasn’t really gotten any interest from data center developers. But that didn’t stop the county from instituting a one-year moratorium in 2025 to block projects and give time for them to develop regulations.

I asked Green if there’s a form of responsible data center development. “I don’t know if there is, at least where they’re going to be economically feasible,” he told me. “If we say they’ve got to erect 40 wind turbines and 160 acres of solar in order to power a data center, I don’t know if when they do their cost analysis that it’ll pencil out.”

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Q&A

Why the Wilderness Society Backs a Data Center Moratorium

Talking with Dan Hartinger, the land conservation group’s senior policy director.

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The Q&A subject.
Heatmap Illustration

This week’s Q&A is with Dan Hartinger, senior policy director for The Wilderness Society, a prominent land conservation organization in D.C. that this week called for a moratorium on data center development on public land. The public statement was relatively scant on details about the group’s stance, and a decade of reporting on policy in Washington has taught me that its positions are quite influential, especially in more traditional outdoor recreation and conservationist circles that are also often bipartisan. So I reached out and asked if someone could further explain the society’s position, and Dan obliged.

The following chat was lightly edited for clarity.

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Hotspots

Data Center Outrage Catches Up to Renewables Outrage in Michigan

Plus more of the week’s biggest development fights.

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The United States.
Heatmap Illustration/Getty Images

1. Central Michigan – I regret to inform you of this back-and-forth between candidates running for Congress and a would-be constituent because it’s a warning sign for the renewable energy sector (and sort of broke my brain).

  • This week brought the first and likely only debate between Rep. Tom Barrett and Sunrise Movement cofounder Will Lawrence, who are locked in a tight contest over the Michigan 7th congressional district. As I’ve written, their race is a must-watch not only for control of the U.S. House but also the political fortunes of the data center sector.
  • The debate contained a remarkable exchange: Moderators played taped remarks from Paula Caltrider, identified as “a local resident” in the city of Mason to ask the candidates a question about data centers. Instead, she offered a comment. “You know, you can’t be a part of this no data center movement without renouncing the large solar farms and dangerous battery storage facilities that power these data centers.” (Quick TL;DR on Caltrider: She’s been quoted in national media coverage of the data center backlash and last year won a legal settlement after allegedly being fired for refusing a vaccine mandate.)
  • Barrett then ran with Caltrider’s baton. “I appreciate Paula linking these together, the stripping away of local control that took place in pursuit of this Green New Deal agenda in Lansing that took away control from communities” – a reference to the state’s primacy law that other Michigan Republican candidates have opposed.
  • Lawrence, whose support for a federal data center moratorium made him a national political test case, did not take the bait, nor did he criticize renewable energy. Instead, this part of the debate became a tit-for-tat about whether the sitting congressman once backed tax breaks for data centers. “He stuck his finger up into the wind, saw which way it was blowing, did a complete 180 on this issue,” Lawrence said. Then Barrett and Lawrence got into a confusing back-and-forth about whether the Inflation Reduction Act was a giveaway to data centers.
  • To the best of my knowledge, this is the first time the Data Center Trojan Horse has reared its ugly head on any kind of prominent debate stage, but it won’t be the last. For example: The Wisconsin gubernatorial debate is Oct. 21, and we’ve warned you about that one.

2. Doña Ana County, New Mexico – I suggest you pay closer attention to the federal permitting fight playing out over Oracle’s Project Jupiter.

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Spotlight

The Data Center Backlash Is Coming for Permitting Reform

The Senate’s compromise bill enters the chat at a moment when federal land and anti-pipeline advocates are already quite activated.

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The Capitol and a data center.
Heatmap Illustration/Getty Images

The AI data center backlash is getting louder in D.C. ahead of the midterms – and it’s poised to collide head-on with the new permitting reform deal being negotiated in Congress.

This week, major environmental advocacy organizations are taking large public steps to lean in on the data center fight. The League of Conservation Voters and Natural Resources Defense Council, I’ve been told, are imminently announcing a $250,000 ad buy in the Washington, D.C. market focused entirely on decrying fossil fuel-powered data centers and Trump administration policies to speed up their construction. The Wilderness Society, a prominent land conservation organization, announced it now supports a moratorium against data centers on “public lands” focused on the roughly half billion acres under the Interior Department’s stewardship. And Earthjustice on Thursday did a detailed report claiming that 80% of the data centers under development “bringing their own power” are going to rely on gas generation.

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