Americans Delay $130B in Data-Center Projects

Residents and local officials blocked or delayed 75 data-center projects worth about $130 billion in the first quarter of 2026, slowing developments from New Jersey to Michigan. Opposition has expanded beyond isolated local fights and affected projects across multiple states.

The project tally comes from Data Center Watch. Objections center on large electricity draws, heavy water use, low-frequency noise and a growing resistance to facilities tied to artificial intelligence. A peer-reviewed study in Environmental Research Letters found data centers’ share of U.S. electricity use rose from 1.9% in 2018 to 4.4% in 2023. Analysts project national wholesale electricity prices could rise between 6% and 29% by the end of the decade as data-center capacity expands; in some states with concentrated buildouts, such as Virginia, projections show much larger generation-cost increases.

Large data centers rely on millions of gallons of water each year for cooling, a volume local officials say can strain supplies and aging infrastructure. Neighbors have reported a constant low-frequency hum near large sites and raised questions about health and quality of life. An Ipsos poll in June found 44% of Americans oppose data-center construction nationwide, 21% support it, and 57% would oppose a facility in their own community.

Municipalities including Tulsa, New Orleans, Birmingham and Ypsilanti Township, Michigan, have imposed temporary bans on permitting or construction. Dozens of counties and towns have taken similar steps, and lawmakers in more than a dozen states have proposed pauses on data-center approvals. One state legislature approved a temporary moratorium that was later vetoed by the governor.

The scale of planned investment is large. Morgan Stanley estimates hyperscale cloud providers will spend about $800 billion on capital expenditures in 2026. The Semiconductor Industry Association projects roughly $4 trillion in government and industry spending on data-center infrastructure through 2028. Monthly construction outlays for data centers have topped $50 billion in a single month, exceeding typical public spending on major transportation projects.

Industry groups and major companies have responded with public outreach and technical efforts. One company ran a multimillion-dollar advertising campaign to highlight local economic benefits. Some cloud providers pledged to cover incremental energy costs their facilities add to local grids, and several hardware and cloud firms announced technologies they say will reduce water use in cooling systems.

Smaller operators and builders face more direct exposure than the largest cloud providers, which can shift capacity across global footprints. CoreWeave is contesting organized opposition to a proposed 250-megawatt site in Kenilworth, New Jersey, where an online petition opposing the project has gathered more than 11,000 signatures. Miquel Vila, lead analyst at Data Center Watch, described the view driving many campaigns: “People consider that stopping data centres is the way to stop AI development.”

Some market participants expect companies with existing operating facilities to benefit if new capacity is constrained. Edge data centers, which are smaller and use far less power and water, may face fewer zoning hurdles and less local resistance. Mark Guberti of The Motley Fool noted, “The presence of fewer data centers helps these companies charge higher prices for their AI infrastructure.”

Analysts say delays will ripple through the supply chain. Logan Purk, a technology industry analyst, warned that extended construction timelines are likely to reduce the total capacity ultimately built and that curtailed access to new power could affect chip makers and other suppliers whose forecasts rely on continued rapid buildouts.