Americans' Views on Data Centers Have Soured

Last week’s post-election stock market rout was mostly driven by the fear that Democrats, who took control of both chambers of Congress, could slow down the buildout of AI data centers. The scale of the sell-off – around $3 trillion erased in a day – demonstrated once more how closely markets and the entire economy are now tied to the idea that artificial intelligence will be at the heart of almost everything in the not-too-distant future. According to Bloomberg, the wider tech sector now accounts for more than 50 percent of the S&P 500’s total market cap, meaning that pension funds and 401(k)s are heavily exposed to concentration risk through the AI trade. Moreover, recent projections suggest that the AI buildout could become the biggest infrastructure investment cycle in modern history, totaling $10.3 trillion from 2025 to 2032 and accounting for an average of 3.6 percent of U.S. GDP during that period.

Despite these numbers and the fact that most Americans now have skin in the game, in one way or the other, there is growing opposition to data centers across the country. According to a recent survey by the Pew Research Center, views on data centers have soured significantly over the past few months, as many Americans have become more aware of the negative side effects of the data center construction boom. 54 percent of respondents now say that data centers are mostly bad for the environment, up from 39 percent in January. Another pain point is the effect that data centers could have on home energy costs, with 50 percent of inflation-plagued Americans expecting them to drive up utility bills. 49 percent of respondents are worried about the negative impact on the quality of life of people living near a data center, which is consistent with the finding that 60 percent of Americans wouldn’t be comfortable with a new data center operating in their area.

Even with respect to local jobs and local tax revenue – too of the most obvious advantages of data center construction, especially in rural areas – Americans are no longer so sure. 24 and 21 percent of respondents now expect a mostly negative effect on local jobs and tax revenue, respectively, up from 15 and 12 percent in January.