American ingenuity, fueled by public and private investment, has transformed breakthroughs—from the locomotive and automobile to the computer and internet—into engines of growth, opportunity, and rising incomes. Building the infrastructure to lead in the rapidly evolving digital age is essential to America’s economic prosperity and national security.
Illustrative image: large-scale data center development.
Yet this buildout now faces a political firestorm from both the left and the right. Resistance to technological progress is nothing new; every generation confronts transformative technologies with a mix of optimism and fear. Concerns about noise, water use, energy costs, traffic, pollution, and property taxes cannot be dismissed. Communities have legitimate interests and should not be expected to accept big tech companies dictating what happens in their towns and cities without their input. The bottom line: Not in my backyard “NIMBY” concerns must be respected and addressed if we are to build the public support necessary to move forward. As the Financial Times reported on October 19, 2026, “America’s $10 trillion AI infrastructure boom is starting to fray” discusses the mounting challenges, as “project delays, public backlash and shaky investor confidence” threaten the data center buildout underpinning the U.S. economy. If fear and political roadblocks prevail, America risks falling behind—and the American people will pay the price. China, meanwhile, stands to benefit if the U.S. fails to build the infrastructure needed to compete. Artificial intelligence is the next frontier, and data centers are its essential infrastructure. Following the launch of ChatGPT in 2022, developers moved quickly to acquire land and build capacity. Yet as the scale of electricity, water, and infrastructure demands became clearer, public scrutiny grew. By the end of 2024, about 1,240 data centers had been built or approved for construction in the United States. Most power the cloud and internet services Americans rely on every day; AI is the newest and fastestgrowing source of demand. The challenge is how America can lead in AI while working in partnership with communities to ensure data center development delivers shared benefits while addressing local concerns.
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But America’s next chapter of technological dominance is threatened by two unworkable extremes:
A moratorium on new data center construction.
“Build, baby, build” without reasonable regulations, safeguards, or meaningful community input.
This report offers a policy roadmap to address public backlash, build community support, and move forward with the investment and infrastructure needed to secure America’s technological leadership—while ensuring the benefits are shared broadly across the nation.
DATA CENTERS: FROM BUILDOUT TO BACKLASH Data centers are emerging as a significant driver of America’s construction boom, generating demand for skilled tradespeople and supporting manufacturing of the power, cooling, and electrical equipment these facilities require. The Bureau of Labor Statistics identifies data center expansion as an important contributor to projected construction employment growth over the coming decade. For many states and communities, this investment offers an opportunity for reindustrialization, new jobs, and economic growth.
Illustrative image: the computing infrastructure behind AI growth.
A multitrillion-dollar wave of investment would ordinarily be welcomed as an economic windfall. Instead, political opposition has turned data centers into a liability in communities across the country. Even in Texas, long a leading destination for data center investment, political resistance is challenging the industry’s continued expansion. So how did a booming industry, once viewed as essential to America’s technological leadership, become a political flashpoint?
2022 In 2022, data center development accelerated while public concern was still limited. State and local officials weighed the promise of investment and jobs against electricity demand, infrastructure costs, land use, and potential community opposition. Supporters, including Texas Governor Greg Abbott and Pennsylvania Governor-elect Josh Shapiro, saw an opportunity to attract business and strengthen local economies through STEPHEN MOORE & ROBERT WOLF • UNLEASH PROSPERITY NOW | OCTOBER 2026
investment and job creation. The central question was already clear. Officials had to weigh the economic benefits against the infrastructure costs, energy demands, and political backlash that large data centers could trigger in host communities. Northern Virginia, home to data centers for more than 25 years, was already the nation’s leading hub, thanks to available land, power access, and favorable tax policies. Governments offered incentives to attract investment, but facilities also required substantial electrical infrastructure, reliable connectivity, and specialized cooling. Although construction created temporary employment opportunities and facilities provided long-term technical and maintenance jobs, the number of permanent positions was often smaller than the number of jobs associated with construction. Local officials therefore had to assess not just the investment promised, but also the infrastructure required and the lasting public return. Early debate focused on economic development. Supporters cited investment, modernization, and tax revenue; residents and environmental advocates raised concerns about electricity, emissions, water use, noise, and the loss of open land. Planning meetings and zoning hearings became the first venues for a debate that would soon intensify over the next several years.
2023 In 2023, larger projects pushed data centers further into public debate. Billion-dollar developments advanced in Illinois and Wisconsin, alongside projects worth hundreds of millions in Georgia, Nebraska, and Ohio. As AI became central to America's technological competitiveness, questions sharpened: who would pay for the electrical infrastructure, and how would host communities share in the benefits of these large-scale projects? Northern Virginia remained a global digital-infrastructure hub as companies expanded capacity for cloud services and computing. Major technology companies continued proposing and constructing large facilities to meet growing demand for cloud storage, internet services, and computing power.
2024 In 2024, the politics surrounding data centers became more contentious as community opposition grew and concerns about the consequences of rapid development received greater attention and scrutiny. Investment continued across Virginia and other states, but developers faced growing constraints: available power, transmission capacity, construction costs, and local approvals. Rising electricity demand also raised a critical concern: would new infrastructure costs be passed on to households and businesses? As a sharper focus took hold, supporters emphasized investment, taxes, and construction jobs, while critics questioned whether those gains justified the environmental and infrastructure burden. Residents increasingly organized through public meetings, advocacy groups, and social media. Communities in Virginia, Indiana, and Missouri raised concerns about noise, water, power use, land preservation, and opaque decision-making. In some locations, opposition resulted in projects being delayed or derailed. In Warrenton, Virginia, a proposed data center became a local flashpoint; in 2025, the town council amended its zoning ordinance to restrict future data center development, though the change did not affect the project already approved. Supporters continued to point to tax revenue and economic activity. By year-end, however, it was clear that developers and governments could no longer treat community concerns as an afterthought.
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2025 In 2025, data centers became a national political issue as AI demand drove a surge in computing and electricity needs. Federal, state, and local officials faced a common challenge: support innovation without shifting its costs onto consumers or communities. Proposals increasingly addressed power, water, environmental impacts, disclosure, and tax incentives. The underlying question was who would benefit from expansion—and who would pay for it. Development accelerated, but projects faced mounting constraints involving power supply, transmission, water, and zoning. In July, Amazon withdrew a proposed 7.2-million-square-foot data center in Louisa County, Virginia, after strong resident opposition. The episode showed that even major developers could not ignore local resistance. Residents protested, petitioned, attended hearings, and challenged projects online. Concerns included cooling-equipment noise, loss of farmland, water consumption, environmental impacts, and higher utility costs. In Chesapeake, Virginia, the city council voted to block a proposed facility in June 2025. Across the country, public opposition was increasingly shaping development decisions. Proponents continued to cite tax revenue, construction employment, and investment. Communities increasingly demanded early consultation, transparent impact assessments, and credible assurances that local residents would share in the gains.
2026 In 2026, data centers became a defining political issue, particularly ahead of the midterm elections. Officials increasingly aligned with one of two approaches: allow development with little federal oversight, or pause construction until stronger protections are in place. Neither approach makes sense and thrusting this critical industry into a transitional period is not a durable solution.
THE WAY FORWARD Two competing camps now dominate the data center debate. Neither “The Wild West Approach” nor “The Moratorium Approach” offer a workable path forward.
The Wild West Approach The “Wild West” approach worked remarkably well for the internet. In 1996, President Bill Clinton signed bipartisan telecommunications legislation that helped establish a relatively light-touch regulatory framework for the emerging digital economy. Section 230 of the Communications Decency Act, part of that same law, provided important legal protections for online platforms. Over the following decades, American companies —including Apple, Microsoft, Google, Nvidia, Meta, and Amazon—became global leaders in the digital economy. Some on the right argue that data centers deserve the same hands-off approach: let the market drive construction, with minimal federal intervention. They point to economic growth, job creation, and America's need to lead in artificial intelligence. President Donald Trump has become the most prominent advocate of this position. In an August 31 Truth Social post, Trump declared:
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"The only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backwards and poor. If they want to be successful and rich, with far lower taxes and jobs all over the place, let Data Reign." Trump continued to defend this position through the fall, including while campaigning alongside candidates who support regulation, often making it the centerpiece of his remarks. He has also proposed using federal public land for data centers. Vice President J.D. Vance has opposed bipartisan regulatory efforts, while Commerce Secretary Howard Lutnick has emphasized economic growth and competitiveness and has dismissed concerns about local impacts. Nevada Governor Joe Lombardo has advanced a softer version and let’s call this “wild west lite”: development on public land if the community supports it. That position reflects the political reality that local consent has become increasingly important. Not surprising, he is engaged in a close re-election campaign against Nevada Attorney General Aaron Ford who opposes all data center building on public lands. Several governors who initially welcomed data center investment have also reconsidered their positions as the economic, environmental, and infrastructure impacts—and public opposition—have grown. This laissez-faire approach has collided with a political wall of resistance, putting the future of data center development at risk. As previously mentioned, the Financial Times and other industry analysts have warned, the consequences could be severe: trillions of dollars in investment and thousands of high-paying construction jobs left on the sidelines. As “data centers” have become politically toxic, elected officials who once supported unfettered development have faced mounting voter backlash. The message is clear: the industry cannot continue with business as usual.
The Moratorium Approach Moratorium advocates call for a temporary halt to new construction. Their concerns are substantial: data centers consume large amounts of electricity, may increase pressure on utility rates, use water, generate noise, and often move faster than permitting systems can assess their effects. Communities argue that development should pause until rules are in place. But a broad freeze also risks delaying investment, infrastructure, and technological progress rather than resolving the underlying problems. At the federal level, the Ratepayer Protection Act passed the House 417–3, seeking to prevent data center-related electricity infrastructure costs from being shifted to other utility customers. The Senate did not advance the measure in a procedural vote later that month. States have taken different approaches. New York Gov. Kathy Hochul signed Executive Order 62 in July 2026, pausing new state permits for data centers drawing 50 megawatts or more for up to a year while the state develops a regulatory framework—the first statewide moratorium in the nation. The legislature separately passed a broader moratorium bill covering facilities of 20 megawatts and up; as of this writing, the governor has not signed it. California adopted a package of seven oversight laws addressing electricity costs, water use, disclosures, and local oversight. New Hampshire Governor Kelly Ayotte expressed support for a moratorium, citing limited energy capacity and the risk of higher electricity prices. Most notably, Texas Governor Greg Abbott who originally was one of the most outspoken advocates for data centers, reversed his position amidst rapidly growing public opposition. In September, the Governor directed the state environmental agency to stop issuing new permits pending an audit of data
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centers’ demands on the electrical grid. Now, more than 30 states have reportedly considered or enacted moratorium legislation. These moves reflect a widening conflict between attracting investment and ensuring that power, water, and local infrastructure can support it. Nearly 500 communities in 26 states have reportedly adopted local moratoriums.
Public Activism Public opposition has intensified. On July 18, 2026, opponents held 142 protests across 42 states in a coordinated demonstration against data center expansion. By September, the issue had become a factor in local and state campaigns, with communities weighing restrictions and pauses on new approvals. Public engagement is now a central force in data center policy. Earlier in the year, as the EPA attempted to curb the ability for the public to weigh in on data center sites, it didn’t stop about 200 groups from over a dozen states from publicly pushing back. The Sierra Club, a nationwide organization with chapters in all 50 states, took several public actions this year including publishing guardrails for states and a legislative menu of options to remedy the “wild west” approach. Friends of the Earth, a prominent network of international environmental activists, led a coalition of over 500 groups from 47 states calling for moratoriums. Founded in 2019, the pro data center industry-backed trade group- Data Center Coalition - has emphasized investment, jobs, tax revenue, national security, and American AI leadership. Joining them in the fight are several powerful labor groups, including the International Brotherhood of Electrical Workers, North America’s Building Trades Unions, and the Laborers’ International Union of North America, which also support data center infrastructure and the jobs it creates. In June, AFL-CIO President Liz Shuler said the federation opposed moratoriums but supported stronger guidelines—a position that points toward a possible middle ground.
Public Opinion Public opinion has shifted quickly. Three recent surveys illustrate the challenge facing the industry.
Illustrative image: electrical infrastructure supporting data center expansion.
Pew Research Center surveys conducted in January and August 2026 found that public views of data centers had become markedly more negative. STEPHEN MOORE & ROBERT WOLF • UNLEASH PROSPERITY NOW | OCTOBER 2026
“More than half of Americans (54%) now say data centers are mostly bad for the environment, up from 39% in January. Half say they are mostly bad for home energy costs, up from 38%. And 49% say they are mostly bad for people’s quality of life nearby, up from 30%.” The July–August survey included 10,548 U.S. adults.
Only 4% said data centers would have a positive impact in these areas. Many respondents remained unsure or unfamiliar with the facilities, suggesting that clear, credible public information matters. In mid-September, Fabrizio, Lee & Associates—whose firm has advised President Trump and served as his campaign pollster—released a memo on voter attitudes toward data centers. Their survey found that nearly 65% of voters oppose new construction and 24% support. A majority of Democrats, Republicans and Independents oppose construction. The message that resonated the most was not about data centers' relationship to artificial intelligence, rather “household cost: enormous power consumption, higher rates for families and small businesses, a strained grid, scarce water, communities absorbing the costs and large technology companies keeping the benefit. Innovation, investment, competitiveness, and jobs do not answer it, because none establishes who pays.”
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Still, 61% favored construction with conditions. That finding suggests voters may accept development if meaningful safeguards are in place. A Quinnipiac University poll released in late September found that 73% of voters would oppose a data center in their community, including more than 85% of Democrats, 76% of independents, and 55% of Republicans. The survey was conducted September 24–27 among 1,032 voters nationwide.
Potential Midterm Election Impact As mentioned above, many local politicians have been thrown out of office because of their vocal support for or their actual votes to give the green light to building data centers in areas where the voters are oppositional. Data centers could influence a consequential midterm election year, with all 435 House seats, 35 Senate seats, 36 governorships, and thousands of state legislative seats on the ballot. According to a recent Pew Research Center survey, the economy ranks among voters’ top concerns with democracy, healthcare and education closely behind; and, a University of Chicago poll found that 63% believe data centers will raise electricity prices. CBS has reported that 75% of data centers under construction and 80% in planning are in predominantly Republican states. The risk is clear: when household costs are front and center, poorly managed data center expansion can become a political liability. Ohio, Texas, Michigan, and Iowa have competitive statewide races. Data centers have emerged as an issue for some Republican candidates who must navigate between President Trump’s full-throated support for rapid “wild west” expansion versus calls for safeguards from some Republicans such as Ohio Senator Bernie Moreno. There will be forty-one ballot questions related to data centers across 13 states in November, most of them in states with competitive elections. The midterm results may shape the pace and direction of regulation. Even with the White House not on the ballot, a shift in control of either chamber of Congress could intensify pressure for federal action. If this election is interpreted as a “referendum on data centers,” and the tech industry loses, the setback could have a long-lasting political tail.
The Path Forward: Federal Guidelines, Not a Free-for-All or a Freeze That is why a middle-ground path forward is imperative—now. American history offers a useful lesson: transformative technologies rarely arrive without disruption as well as varying levels of skepticism by the public. Railroads shortened travel, expanded trade, unified the country, and standardized time—but also raised concerns about safety, land use, public subsidies, monopolies, and lost jobs. The automobile, aviation, nuclear power, the internet, and e-commerce provoked similar debates. Critics warned of danger and disruption; supporters saw engines of growth, mobility, security, and global leadership. In each case, the challenge was not simply to embrace or reject progress, but to shape it responsibly. Data centers must remain part of America’s economic and technological landscape. They can strengthen AI leadership, national security, investment, and employment—but only if growth is planned and its costs are not unfairly shifted onto households and host communities. STEPHEN MOORE & ROBERT WOLF • UNLEASH PROSPERITY NOW | OCTOBER 2026
The choice between a Wild West approach and a moratorium is a false one. Unchecked development fuels public distrust and invites blanket bans. Moratoriums, meanwhile, can stall valuable investment without addressing the underlying concerns: grid capacity, water consumption, noise, utility costs, property taxes, and road congestion. The solution is clear, predictable federal guidance that establishes a framework for responsible development and the fair allocation of costs, while preserving the authority of states and localities to decide whether, where, and how data centers are built. This framework should allow states to compete, experiment, and establish best practices for safe, responsible construction. The objective is to make data centers economic assets that communities welcome, not liabilities they are forced to bear. That requires clear rules ensuring that data center owners pay their fair share—and, where appropriate, the full incremental costs—of the infrastructure they require and the impacts they create, including electricity, water, security, air quality, pollution, and road congestion. The principle is simple: communities should share in the economic benefits of data center development without being forced to subsidize its costs. Federal policy should establish the ground rules, states and localities should guide implementation, and data center developers should be accountable for the costs their projects impose. That is how America can continue to lead in AI while earning the public trust necessary to sustain that leadership.
THE RULES OF THE ROAD FOR DATA CENTERS Federal guidelines should establish a common baseline for responsible data center development in five key areas:
1. Ratepayer Protection Require developers to pay their fair share of the new power generation, transmission, and distribution infrastructure their projects require. Transparent cost-allocation rules should protect existing utility customers from subsidizing data center expansion or bearing unjustified rate increases.
2. Energy Security and Grid Reliability Require developers to disclose projected electricity demand, assess impacts on grid reliability, and present credible plans to meet their energy needs. Guidelines should encourage new generation, dedicated energy resources, storage, and other solutions that strengthen the grid rather than shift costs and risks to existing customers.
3. Water and Environmental Stewardship Require assessments of water availability, cooling requirements, emissions, noise, and cumulative environmental impacts before projects are approved. Establish appropriate monitoring, reporting, and mitigation requirements to protect local resources and quality of life.
4. Transparency and Community Engagement Require early public notice, accessible impact assessments, meaningful community consultation, and clear disclosure of projected jobs, tax revenues, public incentives, and resource consumption. Communities should understand both the promised economic benefits and the costs they may be asked to bear before major decisions are made.
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5. Local Flexibility and Accountability Establish a consistent federal framework that states and localities can adapt to their circumstances. Preserve local authority over siting and land use while promoting predictable permitting standards, enforceable developer commitments, and periodic reviews to ensure that projects deliver on their promises. The objective is not to dictate where data centers can be built, but to establish clear rules for how they should be built. A common federal baseline, combined with state and local flexibility, can provide the certainty developers need to invest, the protections communities deserve, and the foundation for America's continued leadership in AI.
Conclusion: Getting the Rules Right America should neither surrender data center development to a regulatory free-for-all nor freeze it through blanket moratoriums. Instead, it should establish clear national guardrails that hold developers accountable for the energy, water, environmental, and community impacts of their projects. With predictable federal standards, fair cost allocation, transparent review, and meaningful local input, America can build the infrastructure AI requires while protecting consumers, earning public trust, and preserving its competitive edge. The stakes could not be higher. Trillions of dollars in investment and thousands of high-paying jobs are on the line. Getting the rules right will help determine whether America can sustain its leadership in AI while ensuring that the benefits of this transformation are shared broadly—not achieved at the expense of the communities that make it possible. The choice is not between innovation and responsibility. It is between getting ahead of the challenges now and allowing them to undermine America's AI ambitions later.
About Stephen Moore Stephen Moore is a former senior economic adviser to President Donald Trump and served as chief economist for President Ronald Reagan's Privatization Commission. He is chairman of Unleash Prosperity.
About Robert Wolf Robert Wolf served as an economic adviser to President Barack Obama on the President's Economic Recovery Advisory Board and Jobs Council and served on President Joe Biden's Defense Business Board. He is the former chairman and CEO of UBS Americas and the founder of 32 Advisors.
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