A growing nimby movement could upend the data center boom – Crypto News

President Donald Trump touts AI data centers as economic necessities that will boost the nation’s economy and help it beat China. Spending on tech infrastructure is becoming America’s most powerful growth engine, accounting for more than half of GDP growth in the first half of this year.

But residents in communities across the country are starting to push back against attempts to build data centers in their neighborhoods, worried about how the enormous warehouses will impact their lives, and consume water and electricity. By one measure, these local rebellions have sunk or delayed tens of billions of dollars worth of potential data center projects. “There is absolutely a movement here,” says Tyson Slocum, director of the energy program at Public Citizen, a nonprofit consumer advocacy organization.

In several cases, communities have won surprising victories against data center projects proposed by tech behemoths. Last month, Google pulled out of plans to build a 468-acre data center campus in Indianapolis just minutes before the start of a City Council meeting where the plans were expected to be voted down because of community pressure.

Andrew Filler, a mechanical engineer who lives in southeast Indianapolis, was one of the residents who led the effort against the data center. He said he got a notice earlier this year that a company was looking to rezone an empty field across the street from his house. He lives in a quiet residential neighborhood, where he has a small farm raising cows, pigs and vegetables.

He worried that a data center would destroy his peace and quiet, bringing noise and light pollution and hogging the area’s water and electricity. It also bugged him that the data center could get a sales and use tax break for up to 50 years for its equipment under Indiana law, while other local homeowners and businesses had to pay their full share.

Filler met with neighbors, and posted about the data center on his farm’s Facebook page. He also did his own research, driving about three hours to visit another data center. That experience rattled him.

“I took some video and photos and got even more terrified,” he said. “They say it’s just a little warehouse building. No, it is more than a warehouse. There’s generators, there’s cooling equipment. There’s just tons of stuff outside of it.” Standing near the building, he said it sounded like a loud air conditioner, running 24/7.

The Google project sailed through early approvals. But Filler’s grassroots group grew, and filled up meeting halls with opponents. They eventually convinced a small majority of City Council members to vote no on the project. Just before the council meeting on the project was going to start, Google pulled the application.

“We have withdrawn the rezoning application for the proposed data center development in Franklin Township,” Google said in a statement. “While we are disappointed that this project is not moving forward, we look forward to continued opportunities for growth in the state.”

The same dynamic is playing out in several parts of the country. In Virginia, home to more data centers than anywhere else on earth, at least 42 groups have sprung up to oppose more data centers in their towns, according to Data Center Watch, a research firm backed by AI security company 10a Labs. Using media reports and government filings, Data Center Watch found that $64 billion worth of data center projects in 28 states had been delayed or blocked between May 2024 and March 2025 due to community opposition. Since then, several more projects have hit speed bumps.

In August, Tucson residents rallied against a 290-acre data center campus that was expected to use hundreds of millions of gallons of water a year. Much of the state has been in a drought. Local officials denied the operator’s request to be annexed into Tucson and have access to the city’s water. Afterward, the county passed new regulations to force large water users to go through a more onerous process.

Both urban and rural areas are pushing back against data centers. Just this week, farmers in Kentucky helped defeat a rezoning application for a site that would have been home to a data center, over fears that it would hoard energy resources and foul the county’s water. “We are already struggling as farmers,” said one resident, according to the local CBS station. “We don’t need something else to fight against. A lot of farms use well water.”

Data center water use—for cooling the servers inside the buildings and other purposes—has been a particularly large concern. In 2023, data centers used 17 billion gallons of water for cooling, according to an analysis by the investment bank Jefferies. But they also used 211 billion gallons indirectly for power generation, the bank said. For scale, New York City used 365 billion gallons of drinking water in 2024.

Data centers also use a great deal of power, and have been blamed for exacerbating electricity price inflation in some parts of the country. New data centers could use as much electricity as is produced by 45 nuclear reactors over the next five years, according to the nonprofit Electric Power Research Institute.

And while data centers can stimulate economies, they lead to fewer jobs per dollar invested than many other kinds of economic development. A $7.3 billion Microsoft data center project in Wisconsin is expected to lead to 800 permanent jobs. By comparison, a $7.6 billion Hyundai auto plant in Georgia is expected to lead to 8,500 jobs.

Slocum, of Public Citizen, said that communities are objecting to a process that has been shrouded in secrecy, with public officials sometimes being asked to sign nondisclosure agreements about the projects. The Data Center Coalition, a trade group, didn’t respond to requests for comment on the community pushback. But the group has previously pointed to large economic benefits from the industry, including one study that it financed saying data centers added $2.1 trillion to the GDP from 2017 to 2021. The economic impact has certainly grown since then.

Community opposition is unlikely to fully derail the AI buildout, given all the other forces aligning to make sure these buildings get constructed. Governors are giving out big tax breaks to lure data centers to their states. The four biggest tech hyperscalers are on track to spend more than $300 billion on capital expenses this year, much of that to build and outfit data centers across the country.

Tech companies are planning to locate several of their data centers far from population centers, allowing them to avoid conflicts with local communities. At least three of the country’s largest data center campuses are being built in West Texas, which has large tracts of open land. Among them are Stargate, a megaproject involving OpenAI, the maker of ChatGPT. Meta is also building a massive datacenter in a rural part of Louisiana that is expected to use power from three large new natural gas plants. It is far from population centers and has already won approval from state regulators.

And data center operators are finding ways to assuage some community concerns. Beale Infrastructure, the company behind the Tucson project, updated its data center plan to use a new air-cooling system. “This system uses minimal amounts of water that are continuously recirculated, thereby eliminating water loss and the need to consume water for industrial purposes,” the company said. It still needs government approval.