Due to existing laws or political conditions, not every local government can ban the development of data centers outright. Instead, local governments can build in mechanisms throughout the data center approval process to reject data center applications that fail to comply with established city or county goals. These may include the locality’s

• water usage plan,
• energy usage plan,
• heat mitigation plan,
• economic development plan,
• environmental standards (such as air pollution and emissions),
• environmental justice goals,
• public health goals, and
• city equity plans.

Mechanisms to ensure that this process is feasible include the following:

The most important requirement, especially for local governments that do not yet have data centers within their jurisdiction, is to create a separate conditional use permit approval process for data centers. Conditional use permits require developers to apply to the zoning board for permission to use their property in special ways. Approval is conditional, meaning developers must meet specific conditions set by the local government before they receive approval. Importantly, conditional permits can be revoked if conditions are not met throughout the lifespan of the property. There are three critical stages to consider in this process: pre-approval, approval, and post-approval.

A key vehicle to limit or restrict data center development is to update the municipal code, often including zoning requirements, usage requirements, and other siting decisions. Through these mechanisms, local governments can dictate where and how data centers can be constructed. Local governments can take one or multiple approaches, including the following:

Local governments must institute strong noise-mitigation measures to protect residents from the noise emitted from data centers. These measures are implemented through zoning ordinances. They include the following:

Data centers use significant amounts of water resources. This is particularly troubling as tech companies increasingly plan to build data centers in water-scarce locations.¹ Local governments must pass water ordinances that limit the impacts of data centers and restrict data center development when proposals do not work in the community’s best interest.

1. Luke Barratt, “Revealed: Big Tech’s New Datacentres Will Take Water from the World’s Driest Areas,” Guardian, April 9, 2025, https://www.theguardian.com/environment/2025/apr/09/big-tech-datacentres-water. ↩︎

Note: The bulk of regulations designed to protect ratepayers from subsidizing the costs of data centers, mitigate the financial risk from data centers, and promote grid stability are best done at the state level. See Establish Strong Ratepayer Protections and Promote Grid Stability and Accelerate Renewable Energy Infrastructure for more.

Sales and use-tax exemptions for data centers are often granted at the state level. This strips valuable tax money away from communities—especially public schools, since property taxes remain the largest source of K-12 funding. Because data centers are so extremely capital-intensive, exempting them from the corporate personal property tax is a very lucrative subsidy.¹

Local governments must protect against this extraction through the following actions:

1. For a comprehensive overview of how data center subsidies undermine state budgets, see LeRoy and Tarczynska, Cloudy With a Loss of Spending Control. ↩︎

Data centers are significant producers of carbon emissions, which threaten the health of local communities. Local governments must protect community members from the harmful and irreversible effects of data centers, including degraded air quality and worsening quality of community life.

Note: Data centers are not significant job creators and many of the promised jobs tend to be temporary construction positions or low-paid, temporary, subcontracted data center operations roles. Establishing fair labor requirements could offset some harm, but would not address the underlying reality.

Note: Community benefits agreements (CBAs) are not suited to comprehensively protect communities from data center development. CBAs negotiate projects at an individual project level—meaning that terms in one CBA do not apply to all projects or future projects. Community benefits agreements also have the potential to significantly dilute the power of grassroots organizing when a limited set of community members trades away concessions without the buy-in from and participation of all community members. This means that policymakers must be as concerned with the process of CBA development as they are with the substantive provisions. 

For these reasons, CBAs pale in comparison to legislation or other forms of regulation. We strongly recommend pursuing policy actions that codify protection for all community members.

Community benefits agreements are contracts traditionally negotiated between developers and community members intended to ensure that benefits from a specific development project accrue to the communities that reside near the project.¹ They are limited in scope and do not apply to data center development projects more broadly. 

The following recommendations are focused on where and how local governments can introduce policy guardrails to facilitate the CBA process in service of broader community participation from frontline communities.

1. Marisa Sotolongo, “Energy Justice in Community Benefit Agreements and Plans,” Initiative for Energy Justice, June 26, 2024, https://iejusa.org/energy-justice-in-community-benefit-agreements-and-plans. ↩︎

Note that this should not replace, but complement, other conditions included in the conditional permitting process.

The significant resources (capital, energy, land, and water) going into data center expansion are being deployed in service of largely unproven artificial intelligence technologies—whose purported “productivity benefits” have yet to reach millions of consumers and workers across the country, and whose harmful effects are materially reshaping our institutions in ways that ratchet up inequality. 

Local governments are empowered to protect their constituents, particularly communities of color, immigrants, and low-income and working-class people, from the harms of AI technologies.

Data center developers and operators often want to keep information about their deals secret, obscuring details from the public and arguing that transparency can tip off competitors and affect negotiations for tax incentives. States must develop oversight and transparency mechanisms to ensure that data center developers cannot hide critical information from the public.

Sales and use-tax exemptions for data centers are often granted at the state level. This strips valuable tax money away from communities—especially public schools, since property taxes remain the largest source of K-12 funding. Because data centers are so extremely capital-intensive, exempting them from the corporate personal property tax is a very lucrative subsidy.¹

Local governments must protect against this extraction through the following actions:

1. For a comprehensive overview of how data center subsidies undermine state budgets, see LeRoy and Tarczynska, Cloudy With a Loss of Spending Control. ↩︎

Special economic zones, also known as enterprise zones or tax-financing districts, are geographic areas where corporations receive lucrative tax breaks in exchange for investment in a particular community. In theory, these zones are intended to stimulate economic growth in depressed areas. In reality,¹ these zones lack community accountability measures and the benefits rarely accrue to the residents of the community. AI firms² and states³ are pitching the development of special economic zones to fast-track the development of data centers.

1. “Opportunity Zones Resource Center,” Good Jobs First, accessed December 2, 2025, https://goodjobsfirst.org/opportunity-zones. ↩︎
2. Sebastian Moss, “OpenAI Pitches AI Economic Zones for Data Center Permitting, a National Transmission Highway Act, and More Government Support,” Data Center Dynamics, November 14, 2024, https://www.datacenterdynamics.com/en/news/openai-pitches-ai-economic-zones-for-data-center-permitting-a-national-transmission-highway-act-and-more-government-support. ↩︎
3. Massachusetts Office of Energy Transformation, “Enabling Sustainable Economic Development Work Group,” Commonwealth of Massachusetts, accessed December 2, 2025, https://www.mass.gov/orgs/enabling-sustainable-economic-development-work-group. ↩︎

The staggering power-demand projections driven by increased demands from data centers pose significant challenges to our electric system. In many cases, this increased demand cannot be met with existing capacity, requiring new energy generation and infrastructure development. Without proper protections in place, the costs associated with this expansion are frequently passed on to ordinary consumers.

The staggering power-demand projections driven by data center development threaten to destabilize our fragile energy grids. This escalating demand for power is also prolonging our dependence on the fossil fuel industry and reversing our limited climate progress. States and regulators must pass laws and regulations designed to protect grid stability and end reliance on fossil fuels.

Data centers are significant producers of carbon emissions, which threaten the health of local communities. Local governments must protect community members from the harmful and irreversible effects of data centers, including degraded air quality and worsening quality of community life.

The powerful corporate interests behind data center development can exercise outsize influence over key institutions and processes governing data center developments and approvals, from elections and public-utility commissions to other regulatory processes. States must institute reforms over these democratic processes to check corporate influence throughout the data center development process.

Data centers are not significant job creators, and many of the promised jobs tend to be temporary construction positions or low-paid, temporary, subcontracted data center operations roles. Establishing fair labor requirements could offset some harm, but would not address the underlying reality.

The significant resources (capital, energy, land, and water) going into data center expansion are being deployed in service of largely unproven artificial intelligence technologies—whose purported “productivity benefits” have yet to reach millions of consumers and workers across the country, and whose harmful effects are materially reshaping our institutions in ways that ratchet up inequality. 

State policymakers are uniquely positioned to pass legislation protecting constituents from the worst AI abuses: Even as federal legislation has lagged, state legislatures have moved to enact measures to meet the moment. 

State policymakers must see that AI regulation goes hand in hand with data center regulation to ensure that if data centers are built, they cannot do so in service of technology that harms people.

Bailouts occur when governments provide financial or other support to a company or industry to prevent its collapse. The US government has already started bailing out the AI industry. The Trump administration’s executive actions lay out a set of extraordinary measures to boost the AI industry and its push to expand data center infrastructure across the country. These actions include directly investing in AI companies, providing federal tax subsidies and tax credits for data center infrastructure,¹ proposing financial support for qualifying data center projects,² accelerating government adoption of AI,³ brokering sales deals with other countries on behalf of AI companies,⁴ kick-starting an exports program to support sales to foreign markets,⁵ and backing a $1 billion loan to bring the Three Mile Island nuclear plant back online to power Microsoft’s AI data centers.⁶ 

The federal government can make clear that it will not tolerate a bailout for the AI industry. Actions it can take include the following.

1.  The Council of Economic Advisers, Artificial Intelligence and the Great Divergence, January 2026, https://www.whitehouse.gov/wp-content/uploads/2026/01/Artificial-Intelligence-and-the-Great-Divergence-5.pdf. ↩︎
2. Executive Order 14318 of July 23, 2025, Accelerating Federal Permitting of Data Center Infrastructure, 90 Fed. Reg. 35385 (2025), https://www.federalregister.gov/documents/2025/07/28/2025-14212/accelerating-federal-permitting-of-data-center-infrastructure. ↩︎
3. White House, Winning the Race: America’s AI Action Plan, July 2025, https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf. ↩︎
4. Robbie Whelan and Amrith Ramkumar, “U.S. Approves Deal to Sell AI Chips to Middle East,” Wall Street Journal, November 19, 2025, https://www.wsj.com/tech/ai/u-s-approves-deal-to-sell-ai-chips-to-middle-east-79d68f36. ↩︎
5. Executive Order 14320 of July 23, 2025, Promoting the Export of the American AI Technology Stack, title 3 (2025) 35393-95, https://www.federalregister.gov/documents/2025/07/28/2025-14218/promoting-the-export-of-the-american-ai-technology-stack; U.S. Department of State Office of the Spokesperson, “U.S. Department of State Pilots ‘Concierge’ Service for Pax Silica Signatories to Accelerate Core AI Infrastructure Exports,” February 19, 2026, https://www.state.gov/releases/office-of-the-spokesperson/2026/02/u-s-department-of-state-pilots-concierge-service-for-pax-silica-signatories-to-accelerate-core-ai-infrastructure-exports. ↩︎
6. Costas Paris, “U.S. Backs $1 Billion Loan to Restart the Three Mile Island Nuclear Plant,” Wall Street Journal, November 18, 2025, https://www.wsj.com/business/energy-oil/three-mile-island-nuclear-power-plant-ba857bc9. ↩︎

AI regulation goes hand in hand with data center regulation to ensure that if data centers are built, they cannot do so in service of technology that harms people. AI systems are increasingly deployed in ways that expand the power of bosses, landlords, and corporations at the expense of workers, tenants, and everyday people. As the data center boom serves to rapidly accelerate AI use across all sectors of our society, we need urgent actions to protect the public and hold tech companies accountable to the communities affected by these technologies, particularly communities of color, immigrants, and poor and working-class people. 

And yet, the federal government has repeatedly attempted to block states from passing laws regulating AI,¹ encroaching upon local and state authority and endangering millions of people. The administration has also broadcast its desire to preempt state and local authority to pave the way for AI data center expansion.² 

Federal policymakers can protect against this administration’s attempts to preempt state and local power and sidestep congressional authority in service of AI data centers.

1. Cecilia Kang, “Defeat of a 10-Year Ban on State A.I. Laws Is a Blow to Tech Industry,” New York Times, July 1, 2025, https://www.nytimes.com/2025/07/01/us/politics/state-ai-laws.html; and White House, Ensuring a National Policy Framework for Artificial Intelligence, Executive Orders, December 11, 2025, https://www.whitehouse.gov/presidential-actions/2025/12/eliminating-state-law-obstruction-of-national-artificial-intelligence-policy. ↩︎
2. Under the December 2025 Executive Order, Ensuring a National Policy Framework for Artificial Intelligence, the administration plans to prepare a legislative recommendation for a uniform federal policy framework for AI that preempts state and local laws. This legislative recommendation will include preemption recommendations around “generally applicable permitting reforms” for AI data center infrastructure. See Executive Order 14365, Ensuring a National Policy Framework for Artificial Intelligence; and Executive Order 14318, Accelerating Federal Permitting of Data Center Infrastructure. ↩︎

Tech companies are riding the current AI boom to amass even more market power, relying on a permissive regulatory environment that rewards consolidation and market dominance. Big Tech firms have spent decades amassing unrestrained data access and economic power and then using those advantages to control key inputs at all levels of the AI stack. The industry, across all aspects of the AI supply chain, utilizes mergers, acquisitions, and inflated circular spending deals to further consolidate power. This trend toward monopolization in an already concentrated sector will only increase if we don’t take action, with deep consequences for our innovation ecosystem, our economic stability, and our long-term prosperity.

Given both the absence of clear public benefit from the AI boom and the unresolved risks around reliably supplying data centers with necessary resources, there exists little justification for turning over public land to private technology firms—by the Department of Energy or any other federal agency.¹ We must protect federal lands and waters from the development of data centers and the infrastructure needed to support them.

1. U.S. Department of Energy, “DOE Identifies 16 Federal Sites Across the Country for Data Center and AI Infrastructure Development,” April 3, 2025, https://www.energy.gov/articles/doe-identifies-16-federal-sites-across-country-data-center-and-ai-infrastructure. ↩︎

Despite the staggering projections for energy and resource use coming from the data center industry, there is no comprehensive system for tracking and evaluating data center resource use. Data center developers and operators often try to keep information about their deals and resource use secret, obscuring details from the public and claiming that transparency can tip off competitors, threaten national security, and affect negotiations for tax incentives. While states should develop their own state oversight mechanisms—including the ability to intervene to stop data center proposals that threaten state resources—the effects from data centers are felt regionally and across state lines, requiring a federalized approach to data center transparency.

Our energy sector has faced decades of consolidation and private takeover, with the regulatory processes designed to check abuses on corporate power captured by industry and marred by corruption. Data centers are bringing these issues home for households across the country that are facing rising electricity bills; policymakers and utilities are prioritizing the needs and interests of data center developers and oil and tech executives over those of everyday consumers. This opens up a significant opportunity to advance a progressive policy agenda for energy security and resilience—one that treats reliability, affordability, and sustainability as the bedrock of an innovative economy.

Data center expansion is ensnaring us in our reliance on fossil fuels and reversing our limited climate progress. States are keeping coal plants open, building new gas-fired power plants, and reopening nuclear plants solely for data center use.¹ According to the Center for Biological Diversity, carbon emissions from data center expansion, primarily powered by fracked gas and goal, are expected to triple by 2035, reaching 10 percent of our economy-wide emissions.² Federal policymakers can act to stop this handout to Big Oil companies and prohibit the expansion of the fossil fuel industry for AI data centers.

1. Antonio Olivo, “Internet Data Centers Are Fueling Drive to Old Power Source: Coal,” Washington Post, April 17, 2024, https://www.washingtonpost.com/business/interactive/2024/data-centers-internet-power-source-coal; Josh Saul, “Gas Power Roars Back to Drive Data-Center Boom,” Bloomberg, September 16, 2024, https://www.bloomberg.com/news/newsletters/2024-09-16/us-gas-power-roars-back-to-drive-data-center-boom; Adele Peters, “Is Restarting Three Mile Island Really a Good Idea,” Fast Company, October 8, 2024, https://www.fastcompany.com/91204023/is-restarting-three-mile-island-really-a-good-idea. ↩︎
2. John Fleming and Jean Su, Data Crunch: How the AI Boom Threatens to Entrench Fossil Fuels and Compromise Climate Goals, Center for Biological Diversity, Center for Biological Diversity, October 2025, https://biologicaldiversity.org/programs/climate_law_institute/pdfs/DataCrunch_report.pdf. ↩︎

Note: This section is adapted from the AI Now Institute’s November 2025 report Fission for Algorithms: The Undermining of Nuclear Regulation in Service of AI, written by Dr. Sofia Guerra and Dr. Heidy Khlaaf. Read the full report.

Because the staggering demand for energy to power AI data centers cannot be met with capacity from our existing power grid, AI firms are turning to nuclear as a source for additional power. The reality is that nuclear development timelines—often ten to twenty years—cannot safely match the rapid pace of AI development, but the government is fast-tracking nuclear development in ways that raise serious safety and oversight concerns.¹ In this process, the US government is enforcing positions that have been independently deemed perilous for nuclear safety and security, threatening widespread, catastrophic risk to serve the demands of AI firms.² The federal government must reject the use of AI as justification to roll back nuclear energy safety regulations put in place because of nuclear’s propensity for catastrophic risk.

1. Sofia Guerra and Heidy Khlaaf, “Fission for Algorithms: The Undermining of Nuclear Regulation in Service of AI,” AI Now Institute, November 2025, https://ainowinstitute.org/publications/fission-for-algorithms. ↩︎
2. Ibid at 13. ↩︎

Tech firms are investing an eye-watering amount of capital into AI infrastructure based on projected future demand that is detached from demonstrated need.¹ Firms are taking on record levels of debt to build data centers, raising the alarm for economists concerned with firms’ ability to pay down their debts with a steady cash flow.² At the same time, AI firms are increasingly reliant on circular spending deals— where AI companies invest in and buy from one another—which can create skewed market incentives and distort decision-making.³ Because only a handful of buyers represent a large share of the overall market, circular spending deals in a market downturn can drive cascading negative effects.⁴ This instability threatens not only the health of our overall economy and financial institutions, but the pocketbooks of millions of Americans, including their life savings, retirement plans, pension funds, and life insurance policies.

1. Sheryl Estrada, “MIT Report: 95% of Generative AI pilots at Companies Are Failing,” Fortune, August 18, 2025, https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo; David Crawford, Anne Hoecker, and Dana Aulanier, Technology Report 2025, September 2025, https://www.bain.com/insights/topics/technology-report; and Meghan Bobrowsky, “Big Tech Is Spending More than Ever on AI and It’s Still Not Enough,” Wall Street Journal, October 30, 2025, https://www.wsj.com/tech/ai/big-tech-is-spending-more-than-ever-on-ai-and-its-still-not-enough-f2398cfe. ↩︎
2. Aaron Gregg, “Big Tech Is Taking On More Debt than Ever to Fund Its AI Aspirations,” Washington Post, January 23, 2026, https://www.washingtonpost.com/business/2026/01/23/ai-corporate-debt-record. ↩︎
3. Cedric Sam, Rachael Dottle, Agnee Ghosh, and Kyle Kim, “A Guide to the Circular Deals Underpinning the AI Boom,” Bloomberg, January 22, 2026, https://www.bloomberg.com/graphics/2026-ai-circular-deals. ↩︎
4. Ibid. ↩︎

The significant resources (capital, energy, land, and water) going into data center expansion are being deployed in service of largely unproven artificial intelligence technologies—whose purported “productivity benefits” have yet to reach millions of consumers and workers across the country, and whose harmful effects are materially reshaping our institutions in ways that ratchet up inequality. Federal policymakers must see that AI regulation goes hand in hand with data center regulation to ensure that if data centers are built, they cannot do so in service of technology that harms people.

The Problem of Data Centers

Data center construction has exploded in the US over the past few years both in numbers and in scale of facilities, driven by Big Tech’s speculative AI “boom” and its close ties to the fossil fuel industry, military and defense industries, and cryptocurrency mining.[^7] Contrary to data center backers’ claims that this expansion serves everyday people, there is a deep lack of evidence of benefits—and even of any justification for the demand.

Tech firms are investing a tremendous amount of money in AI infrastructures based on projected future demand that is detached from demonstrated need. Bain & Company estimates that $2 trillion in annual revenue will be required by 2030 to make the AI infrastructure build-out profitable—more than the combined 2024 revenue from Amazon, Alphabet, Apple, Meta, Microsoft, and Nvidia.[^8] At present, however, AI firms are showing nothing remotely approaching this kind of scale on the near- or mid-term horizon. This ratcheted-up pressure to show a return on investment for shareholders and investors incentivizes AI firms to adopt increasingly toxic business models.[^9]

The data center build-out reveals who truly benefits from the acceleration of AI across all sectors of society, and who is left to pay the price. More than a decade of evidence and community experience shows that data centers, particularly hyperscale facilities, operate as tangible sites of corporate extractivism, in the form of empty promises made to localities that are trying to survive austerity and legacies of deindustrialization. This rampant expansion has deep consequences for local communities, our regional infrastructure, our scarce natural resources, our public budgets writ large, and our futures. See our recommendations to prohibit or restrict data center development locally, reject data centers that do not fit within a locality’s goals, and pass statewide or regional moratoriums.

Data Centers Are Bad for Economic Development

AI developers justify data centers’ immense resource use and billions in tax breaks with promises of economic development that fail to materialize—and prevent investment in industries that are more sustainable.

Data centers are one of the most subsidized industries in the US, costing states billions of dollars in lost revenue annually through tax breaks and other corporate giveaways. They also threaten our public budgets, including for education and basic infrastructure.[^10] According to Good Jobs First, at least 10 states lose more than $100 million annually in tax revenue to data centers, with Texas losing over $1 billion in 2025 and Virginia over $700 million in 2024.[^11] The few states that have calculated their returns on taxpayer investments have determined that they lose between 52 and 70 cents for every dollar they spend on data center sales tax exemptions[^12]—only one type of tax break that data centers typically receive.

This stands in sharp contrast to the promises data center developers and tech companies make of billions in investments for localities, and their performative donations to local school districts and other institutions. Oregon public schools, for example, lost an estimated $275 million to property tax abatements in 2024 alone.[^13] Oregon’s Crook County, home to numerous data centers including facilities operated by Meta and Apple, gave away $29 million in 2024 in local revenue to property tax exemptions to corporations—orders of magnitude away from Meta’s donation of roughly $2 million to the county school district over the past decade.[^14] Simultaneously, data centers require so much electricity—and have the power to negotiate preferential deals with utilities—that they crowd out more sustainable industries from the grid and thus the local economy. See our recommendations to repeal or limit tax incentives and subsidies at the local and state level.

Data Centers Are Not Significant Job Creators

The other justification for billions in tax breaks is the promise of job creation, despite the fact that most data centers create remarkably few permanent jobs.[^15] A single facility can operate with only a few dozen employees, including both higher-paid technicians and lower-wage security, landscaping, and janitorial roles, who may be subcontractors.[^16] The promised jobs numbers are often vastly inflated by temporary construction positions, with no guarantee these roles will go to local workers.[^17] Subcontracting practices with specialized temp agencies hire data center workers in temporary positions without benefits, rather than as direct employees, as in the case of a Google facility in Council Bluffs, Iowa.[^18] High-paid construction roles, such as electricians, are often filled by workers who travel from project to project across the country.[^19] These numbers pale in comparison to other developments; Indiana Michigan Power’s (I\&M) own report shows that data centers create 100 times fewer jobs than other industries, by amount of power used.[^20] In exchange for these jobs, states are paying almost $2 million in tax breaks on average.[^21] See our recommendations to establish fair labor requirements at the local and state level.

Data Centers Threaten Our Scarce Natural Resources, and Subsequently Our Public Health

Data center expansion is returning communities to reliance on fossil fuels and reversing our limited climate progress. States are keeping coal plants open, building new gas-fired power plants, and reopening nuclear plants solely for data center use.[^22] According to the Center for Biological Diversity, carbon emissions from data center expansion, primarily powered by fracked gas and goal, are expected to triple by 2035, reaching 10 percent of our economy-wide emissions and 44 percent of the power-sector emissions allowable to meet the US 2035 climate target.[^23] See our recommendations to regulate data centers’ energy use at the local level and accelerate renewable energy infrastructure at the state level.

Carbon emissions threaten not only our planet’s future, but the immediate health of communities, with air pollution leading to rising cancer and asthma rates. By 2030, air pollution from data centers alone could cause an additional 600,000 asthma cases annually in the US and an estimated 1,300 premature deaths.[^24] As the electricity grid struggles to keep up with the immense demand of AI data centers, companies are increasingly turning to dirty behind-the-meter power sources, further exacerbating public health impacts. The diesel generators frequently used for backup power release additional pollutants and toxins that cause asthma, cancer, heart attacks, and cognitive decline.[^25] Nitrogen oxide from gas turbines is making it hard for nearby residents to breathe: In the Boxtown neighborhood of Memphis, for example, xAI’s supercomputer facility operates 35 turbines without pollution controls or adequate permits.[^26] Noise pollution from data center construction, generators, heating and cooling systems, and energy sources can also result in negative health consequences for workers and nearby residents (including headaches, stress, and disrupted sleep, which in turn lead to cognitive impairment and cardiovascular risks), as well as impacts on local wildlife.[^27] See our recommendations to prevent air pollution and protect community health locally and institute strong noise-mitigation measures.

Data centers are using up precious water resources across the country, with a single data center consuming as much water as a city of 50,000 people.[^28] Tech companies report record water consumption figures due to their growing data center footprints, even as they build more data centers in water-scarce locations.[^29] These numbers are also likely an undercount, as water for construction, cooling, and energy infrastructure is rarely considered in projections of data center water use.[^30] Claims that projects will be “water positive” do not replenish stressed aquifers, but refer to nominal fees paid by companies for water stewardship projects elsewhere.[^31] See our recommendations to regulate data centers’ water use.

The data center build-out is also a massive land grab that threatens historic sites and cultural landmarks, Tribal Nations and Indigenous communities, rural and agricultural communities, and affordable housing. Data center construction has encroached on wilderness areas, state parks, and historic sites, and has also damaged century-old Black cemeteries.[^32] Recently, the federal government has opened up federal lands to data center construction.[^33] Tribal Nations and Indigenous communities have raised alarms about the threats of data centers to their sovereignty, lands, water, and environment, as well as about the impact of nuclear energy projects and mining of critical minerals.[^34] Data center proposals and expansion of energy infrastructure including transmission lines cut across and reduce working farmland.[^35] Data centers lower quality of life for homeowners and residents close by—in some cases reducing potable water and increasing power outages, noise, and light pollution—and divert resources from affordable housing construction.[^36] See our recommendations for establishing conditional use permitting for data centers and passing zoning ordinances and municipal code amendments. Note: This toolkit does not yet include protections specific to Tribal Nations and Indigenous communities; for more information, please see No Data Centers on Native Land.

Data Centers Destabilize Our Energy Grid—and Pass Energy Costs Onto Everyday People

By 2030, data centers are expected to use 12 percent of US electricity consumption, triple the current 4 percent.[^37] Even in lower estimates, this exceeds the amount of electricity needed to power 26 million households.[^38] This energy grab is already destabilizing our energy grid, with the North American Electric Reliability Corporation (NERC) citing data center growth as one of the greatest reliability challenges for US power grids,[^39] increasing the risk of power outages and bringing higher risks of energy shortfalls to virtually the whole country.[^40] Near misses of blackouts are already increasingly common; for example, in July 2024, data center operators almost caused blackouts across Virginia as they prioritized their own facilities’ continued operations following an equipment failure.[^41]

As the wealthiest corporations in the world demand exponentially more power for their data centers, everyday people are regularly subsidizing the companies’ energy costs. Across the country, energy bills have gone up for regular ratepayers (individual households and small businesses),[^42] directly attributable to the buildout of data centers and associated energy infrastructure.[^43] Despite promises to pay their fair share, the industry has fought against obligations to ensure its costs aren’t passed along to ratepayers, in states including Georgia and Ohio.[^44] See our recommendations to establish strong ratepayer protections and promote grid stability.

Data Centers Are Introducing Massive Risk into Our Infrastructure and Financial Markets

The AI market is increasingly based on speculative financial structures, with a growing reliance on private credit markets. If there is indeed an AI bubble and that bubble bursts, this dynamic could jeopardize the stability of our pensions, retirement savings, and insurance policies; it could also potentially produce stranded assets.

The data center build-out is largely built on demand projections—not actual demand—which works to the advantage of AI companies jockeying for investments and rapid access to energy infrastructure. Forecasters tend to overestimate electricity demand because they emphasize static load growth, increasing at similar rates over time, rather than efficiencies that are likely to develop.[^45] Utilities companies are simultaneously incentivized to overproject energy demands to grab investors’ attention;[^46] this overestimated demand is likely further inflated, as data centers tend to request—but not use—services from multiple utilities.[^47] All of this functions to benefit tech firms, which can use demand projections as a strategic policy lever to petition the government to bring more power sources, like natural gas plants and nuclear development, online quickly.[^48] Not only does this harm communities by backtracking on decarbonization goals and increasing reliance on fossil fuels; it also significantly introduces the risk of stranded assets if and when actual demand fails to materialize.

Some firms are already walking back their data center commitments because the math simply doesn’t add up. Microsoft has pulled back on multiple data center projects globally,[^49] and a US Census Bureau study found that AI adoption rates are starting to decline for large companies.[^50] This has stopped neither the proliferation of data center investment, nor a nationwide push to expand fossil fuel infrastructure and redirect energy infrastructure investments toward AI’s insatiable ends.

This investment further consolidates corporate power and serves to expand a technology largely used to surveil everyday people and degrade the quality of our lives, access to resources, and basic rights. See our recommendations to protect constituents from AI harms at the local and state level.

Data Center Developers Benefit from Economic Development Policies, Secrecy, and Regulatory Systems That Assume Corporate Interest Will Lead to Public Benefit

More than a decade of existing data center development shows that the supposed gains from this trickle-down approach fail to materialize. Our local and state regulatory systems often prioritize attracting economic development regardless of the cost to residents, and largely do not take into account users operating at such a massive scale of resource consumption. Widespread corporate use of nondisclosure agreements, backroom deals, and secretive practices excludes the public—and in some cases local officials—from decisions about data centers in their backyards.[^51] Corporate lobbying (which operates largely without spending limits) and campaign contributions from super PACs further exacerbate this dynamic, as tech companies pour millions into shaping elections and the outcomes of legislation to their benefit.[^52]

Part of the work of opposing data centers is addressing these flaws in our systems, as much of data center development is governed by zoning processes, economic development boards and corporations, and local and state bureaucratic mechanisms. See our recommendations to establish statewide oversight and transparency mechanisms and limit corporate influence over processes and institutions involved in data center development.

The Current Trajectory of Data Center Development Is Not Inevitable

Data centers simply do not need to be built out at the size, scale, and level of acceleration currently pushed by AI firms, tech companies, and developers increasingly backed by private equity. We are facing a critical inflection point in the expansion of this infrastructure and the acceleration of AI technologies used to justify it, as the takeover of our electric grid, precious resources, public and Tribal lands, and infrastructure ramps up to previously unthinkable levels. We can choose another direction, following the lead of communities already living the impacts of these toxic developments and their visions for an alternative future.

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