Data center opponents say an outpouring of nationwide protests against the spread of the energy- and water-intensive facilities show their development could become a major issue in upcoming elections, while analysts say the pushback threatens to affect facility planning and financing.
Thousands of protesters gathered in at least 142 locations across the United States on July 18 as local community and government opposition grows for the industrial real estate designed to support artificial intelligence.
“We believe opposition will put upward pressure on costs and timelines, contributing to project dispersion across the U.S.," for data center developers, Morgan Stanley analysts said in a research report this month.
An advocacy group called Humans First organized gatherings in 42 states this past weekend to protest what it called the “unaccountable” buildout of data centers and an “unacceptable infringement” on citizens’ liberty.
Humans First co-founder Amy Kremer, who also co-founded the tax-focused Tea Party that emerged in 2009, said opposition to data centers is nonpartisan and reflects concerns among a large swath of residents across the country.
“They just woke up one day and found out they’re going to have this monstrosity in their community, and they don’t want it,” Kremer told Reuters, adding data centers could be a defining issue in this November’s mid-term elections and the 2028 presidential election.
Working with lawmakers
Responding to the protests, the Data Center Coalition, an industry trade association, issued a statement saying data center operators are working with lawmakers and residents to ensure the facilities strengthen rather than strain communities.
“Data centers are committed to being responsible and responsive partners in localities where they operate,” the coalition's President Josh Levi said in the statement. “That’s why the data center industry is investing in new power generation and transmission upgrades that benefit all users, practicing responsible water usage, and generating significant tax revenue that enables important local priorities and helps make life more affordable for Americans across the country.”
New York recently became the first state to pause approvals of large data centers for one year, with at least 14 other states considering similar action and more than 150 cities, towns and counties weighing their own measures.
A number of objections are based on concerns about power consumption and rising electricity costs for neighboring residents and businesses, along with land use and other environmental matters.
With more than 1,500 data centers in planning stages nationwide, the steady stream of opposition has implications for location decisions and development timelines for years to come. Morgan Stanley estimated that pipeline projects subject to delays represent $877 billion in AI-related capital spending that was planned for 2026 alone.
Morgan Stanley said the fallout could affect financial returns for data center real estate investment trusts, along with power and other utility providers. “Just as relevant are the implications for the financing ecosystem supporting these developments, and the implications for the U.S. position in the AI race relative to countries like China.”
Community and government opposition to data centers resulted in at least 75 U.S. data center projects valued at about $130 billion being blocked or delayed in this year’s first quarter, according to tracking site Data Center Watch. That about matched the total volume of project disruptions for all of 2025.
A Reuters/Ipsos poll last month found just 14% of U.S. respondents would be comfortable with a data center being built in their community. The survey found that 77% of respondents were concerned that AI-driven data centers will raise their electricity costs.