US backlash against AI data centers is growing

For years, US states welcomed data centers with open arms. They promised steady tax revenue, and Texas went further, introducing tax breaks more than a decade ago to attract technology companies. Governor Greg Abbott's administration later actively backed the sector.

In November last year, Abbott proudly announced a $40 billion Google investment and said Texas was becoming the "epicenter of AI development." With abundant land and energy and business-friendly permitting procedures, Texas is now the second-largest concentration of data centers in the United States after Virginia, according to Data Center Map.

But the political mood is shifting. Abbott recently said he had temporarily suspended the approval process for about 1,800 new data center projects worth billions of dollars. He cited concerns about excessive energy and water consumption. Those concerns have intensified with the rapid growth of generative AI since ChatGPT debuted in late 2022.

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epicenter of AI development

The backlash extends beyond Texas. More than 60% of Americans now oppose building new data centers in their area, according to a University of Pennsylvania poll. Critics say the facilities strain local energy and water supplies and support technology that could cost people their jobs. The issue is becoming a growing burden for politicians and candidates from both parties before the autumn elections.

Abbott's Democratic challenger, Gina Hinojosa, has repeatedly used his earlier support for data centers against him. In her latest campaign ad, a woman asks a chatbot why her electricity bill is rising. The bot answers that the reason is data centers approved by Abbott, who received millions of dollars in campaign donations from people linked to the data center, energy and technology sectors, including Elon Musk. "The issue of data centers is another example of the governor acting in the interests of powerful financial groups instead of Texas residents," Hinojosa told The Wall Street Journal.

Pennsylvania Democratic Governor Josh Shapiro has faced a similar problem. He recently signed an executive order that significantly tightened permitting requirements and gave state and local authorities more power to block data center projects. Yet last summer he praised companies such as Amazon for building data processing facilities in Pennsylvania at a summit attended by Donald Trump and other Republican leaders. Like Abbott, Shapiro is now being attacked by his opponent.

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The issue of data centers is another example of the governor acting in the interests of powerful financial groups instead of Texas residents.