How America’s Data Center Backlash Is Reshaping Midterm Politics

photograph: getty images

Once welcomed with tax breaks, AI data centers are now among America’s least popular infrastructure. Counties are blocking them, governors are reversing course — and the backlash is reshaping the midterms.

On August 31st Donald Trump entered the volatile dispute, unsettling Republicans in close midterm contests. Neighborhood critics of data centers would “end up being backwards and poor” if they strangled the “Golden Goose”, he cautioned. The revolt against data centers is upending familiar partisan patterns, reshaping upcoming elections and rattling technology companies and investors. Whether it will actually decelerate the AI surge remains uncertain.

The speed of the political reversal can be seen in three contrasting states: Illinois, Texas and Pennsylvania. In 2019 J.B. Pritzker, the governor of Illinois, enacted bipartisan incentives to encourage their building. “In today’s world,” he declared, “data centres are as critical a part of our infrastructure as our roads, trains and schools.” In Texas, Greg Abbott was still boasting last year that the state stood as “the epicentre of AI development” while celebrating fresh Google data centres. Josh Shapiro, Pennsylvania’s governor, sounded just as bullish: “We are already all in on AI.”

By August Mr Pritzker was striking a markedly different note. Data centres threatened “higher electric rates, higher water rates or…environmentally unsound practices”, he told reporters. In June he had single-handedly frozen applications for the tax credits created in 2019. In Texas, Mr Abbott directed the state’s electric utilities to review every data centre requesting grid power. The facilities “could endanger the reliability and stability of the Texas electric grid”, he warned. Mr Shapiro has likewise stiffened controls, expanding local veto power over proposals, while branding his gubernatorial rival as pro-data centre — now increasingly wielded as a political slur.

Slightly more than a year ago some surveys still registered majority backing for nearby data-centre building. By March that had reversed: one Gallup poll found 71% opposed. Annenberg surveys logged a 19-point swing in net favourability between February and June-July. An Economist/YouGov poll from the end of August put opposition at 63%. Data centres were viewed as bad for the country across every group of voters (see chart 1).

Chicago captures the turnaround. Well before the AI boom, the city and its suburbs already housed dozens of data centres, owing to their central place in America’s internet backbone and comparatively inexpensive power. Until lately, hardly anyone objected. Now residents are crowding town halls to halt development statewide. In August hundreds mobilized against a proposed South Side Chicago project that, its developers insist, is not even a data centre.

During the first eight months of this year, American counties weighed 409 moratoriums or comparable restrictions, nearly seven times last year’s total. In more than half a dozen states — including virtually every midterm battleground — more than a fifth of counties have passed at least one moratorium (see chart 2).

Some defenders of data centres have attributed the uproar to hostile foreign actors. “China could not be happier,” observed Mr Trump. In June OpenAI, a model-maker, said that a Chinese firm had produced images designed to undermine support for data centres in America. On August 27th X, the social-media platform, said it had identified a 200,000-strong Chinese bot farm circulating the material. Yet evidence indicates those campaigns had minimal impact. OpenAI concluded that they generated “little or no observable engagement” among Americans.

Too close to home

The genuine driver of fury is more straightforward. Americans remain doubtful about AI, mistrust its builders and dread employment losses. Yet survey after survey indicates their sharpest anxiety about data centres involves neighborhood consequences — or at least perceived ones. A recent Fox News poll found that 75% of respondents cited concerns such as energy use, water bills and traffic, as the main reason they opposed a data centre in their area. Just 11% pointed to AI itself.

Much of that alarm is exaggerated. Google, a hyperscaler, says that in 2025 its data centres and offices consumed around 10.9bn gallons (41bn litres) of water — roughly equivalent, it noted, to the annual irrigation of 73 golf courses in the south-west. Amazon, another hyperscaler, says its global fleet of data centres used 2.5bn gallons last year, down by 2% from 2024 despite adding more facilities. In 2023 crop irrigation consumed 74 times more water than data centres, even after accounting for the water used to generate their power.

Electricity is a different matter. The Lawrence Berkeley National Laboratory, a federally funded research centre, estimates that data centres consumed 4.4% of America’s electricity in 2023 and could account for between 9.5% and 15.3% by 2030. Their impact on consumers is less clear. Wholesale prices are being pushed up. That could eventually impact households. But the Electric Power Research Institute, a think-tank, estimates that the growth of data centres actually reduced average electricity prices by 6% between 2019 and 2024 by spreading the grid’s fixed costs.

In recent weeks three big utilities — Georgia Power, Pacific Gas & Electric and Indiana Michigan Power — have all linked data centres to lower bills. Meanwhile, 30 states have approved or proposed “large-load” tariffs designed to ensure that big customers such as data centres pay for infrastructure upgrades.

The question is whether public opinion is still malleable. A poll this month by Echelon Insights found that opposition to data centres could be reversed if respondents were told about just one potential benefit, such as lower property taxes or more spending on schools. “Voters are open to making a deal on data centres,” argues Patrick Ruffini, a Republican pollster who runs Echelon. They also seem open to bribes. Another poll, by the University of Virginia, found that most people would accept a few thousand dollars to support a local data centre.

Still, the backlash shows few signs of abating. “We’re going to see the same thing happen in 2028,” says Darrell West of the Brookings Institution, a think-tank. Governors who escape the issue this year will face it in two years’ time, he argues, when they come up for re-election.

The topsy-turvy data-center debate could prove especially awkward for Democrats in Illinois, where trade unions are powerful. Many unions are enthusiastic supporters of data centres. After Mr Pritzker’s decision in June, a group of union leaders issued a critical statement. The move, they said, “will send billions of dollars in investment and thousands of union jobs to Indiana, Kentucky and Ohio”. Tim Gillooley, a local union official, is even more emphatic: “These data centres are going to be built! Let’s get them built here.”

The path of least resistance

Mounting resistance is acting as grit in the industry’s gears. Sales-tax exemptions for computer chips — the biggest cost of building a new data centre — remain in place in most states, including Texas. But they have been paused in others, including Arizona and Ohio, or made conditional, as in Pennsylvania. That, along with satisfying local demands, will inevitably increase the cost of new data centres. Even so, a handful of states still wield outsize influence. Texas alone has more data centres under construction than Georgia, Arizona and Pennsylvania combined (see chart 3).

Data-centre investment may simply flow to more permissive states. “Enough of these data centres are going to find a home in a community willing to work with them in return for the tax revenue and other benefits,” says Jack Painter, an energy analyst at Capstone, a strategy firm. As Mr Trump put it amid the furious politics: “Let Data Reign.”

Report a correction