AI data center backlash spreads as 71% oppose local builds

A bipartisan grassroots revolt against AI data centers is scrambling US politics, with 71% of adults opposing local construction and more than 500 counties passing bans or moratoria, threatening the industry's expansion plans.

"We have lost the muscle memory around actually what it takes to get out of Silicon Valley and get people—real human beings—engaged locally," Rachael Horwitz, a longtime tech public-relations professional who worked at Google, said.

Candidates in at least 21 races across 18 states have aired television advertisements mentioning data centers this cycle, almost evenly divided between both parties. On the grid serving Ohio and 12 other states, demand from data centers drove up capacity costs by $9.3 billion in a single year, a 174 percent increase, according to an independent market monitor.

The backlash threatens to complicate the path to public markets for OpenAI and Anthropic, whose IPOs face mounting political and regulatory risk even as Wall Street prices in lofty valuations.

Texas Halts 1,800 Projects

In Texas, Republican Governor Greg Abbott has frozen new projects while regulators weigh their impact on power and water supplies — a reversal for a governor who once called his state the "epicenter of AI development." Abbott's move halts roughly 1,800 projects, scales back some tax incentives, limits certain water and energy use, and imposes new requirements on developers. His Democratic challenger Gina Hinojosa wants a moratorium until lawmakers pass stronger safeguards, accusing Abbott of putting wealthy interests ahead of ordinary Texans.

The shift is playing out across both parties. In Ohio, Democrat Sherrod Brown has run at least four ads attacking Republican Jon Husted for courting data center investment as lieutenant governor, branding him "the face of data centers." Senate Republicans have warned the issue could cost Husted the race, calling data centers a "sleeper issue" that would chill political support for the industry nationwide.

Trump Stands Alone

Almost alone among Republicans, President Donald Trump has not moved. He still calls the industry essential to beating China on AI, leaving him at odds with candidates running under his own banner. His administration has signed up Google, Microsoft, Meta, Oracle, xAI, OpenAI and Amazon to a voluntary "Ratepayer Protection Pledge," under which the companies undertake not to leave consumers paying for the power plants and grid upgrades their facilities require.

Trump's aggressive plans to accelerate the buildout include opening federal lands for hyperscaler construction, axing public participation processes in permitting, and waiving Clean Air Act and Clean Water Act requirements on national security grounds. His spokeswoman Karoline Leavitt said Thursday that "America must remain dominant in the AI race that is the future."

A Singular Opportunity

The movement against data centers is uniting Americans across the political spectrum. "On many issues, people come in with a baked-in partisan lens that influences their thinking," said Ben Inskeep, program director at Citizens Action Coalition. "On datacenters, we don't have those firm camps formed."

William Lawrence, a Sunrise Movement co-founder who made opposition to data centers a focus of his successful campaign for the Democratic nomination in Michigan's Lansing area, said the issue brings people together. "At a time when people are so polarized and isolated from each other, something that brings people together is rare," he said.

For OpenAI and Anthropic, the political headwinds arrive as both companies prepare for IPOs. The industry's failure to build local support — a contrast with Uber a decade ago, which turned to a powerful user base to lobby on its behalf — leaves AI labs without the political muscle to counter the backlash. "After the Tylenol crisis, this is the next great comms case study but in this instance it's what not to do," Horwitz posted on X.

This article is for informational purposes only and does not constitute investment advice.