rewrite this title Experts Warn Data Center Backlash Could Slow AI Infrastructure Growth – Decrypt

AI data centers are expanding rapidly across the U.S., but growing local resistance is emerging as a potential roadblock for the infrastructure behind artificial intelligence.

A new report from nonprofit think tank Brookings warns that disputes over electricity use, water consumption, tax abatements, and environmental impact are increasingly slowing or threatening data center projects. The authors say legally binding community benefit agreements are necessary to prevent local opposition from constraining AI infrastructure growth.

“Data centers are both controversial and critical to the artificial intelligence technologies undergirding the digital economy,” the report said. “Without abundant data centers, the digital revolution could potentially stall, restricting access to the benefits of digital technologies for individuals, communities, governments, and businesses.”



The report comes as demand for computing power ramps up and AI data centers spread nationwide, supported by the Trump administration. In January 2025, Trump announced Stargate, a $500 billion AI infrastructure initiative backed by OpenAI and Oracle, and called for long-term safeguards to ensure communities are not left with data centers that deliver little benefits.

According to Shaolei Ren, an associate professor of electrical engineering at the University of California, Riverside, local concerns about water use, public health, electricity costs, noise, and related issues are valid and should be addressed upfront before construction begins.

“Ultimately, the metric that really matters is community satisfaction, and that is what we should be optimizing for,” Ren told Decrypt. “There is a growing recognition that community voices matter, and that data centers should be planned and built in alignment with local interests, not just technical or economic objectives.”

“Of course, the first step is measurement,” he added. “You cannot improve what you do not measure.”

Data centers are massive facilities that store and process the vast amounts of data required to run cloud computing and AI systems. According to an October report by the Pew Research Center, U.S. data centers consumed about 183 terawatt-hours (TWh) of electricity in 2024, roughly equivalent to the combined annual energy demand of Pakistan.

The Brookings report said the data center expansion comes amid a growing “techlash” against the AI sector, driven by anxieties over job displacement from automation, energy consumption, and impact on the environment, which has sparked protests and organized opposition in communities around the country.

“Left unchecked, these community concerns could slow down the rapid construction of data centers, weaken AI growth, and slow AI revenue streams, all of which would limit the AI benefits promised by tech firms and government officials,” the Brookings report said.

Major tech firms, including Amazon and Nvidia, have announced multibillion-dollar investments to expand data center and AI infrastructure, adding to a global network that includes nearly 4,000 data centers in the U.S. and about 10,700 worldwide, according to data from tracking site Data Center Map.

Much of that new development is concentrated in the American South, where companies are building large facilities in North Carolina, Georgia, Virginia, Louisiana, Mississippi, Alabama, South Carolina, and Tennessee. Local leaders and advocates argue that data centers are being built in low and middle-income areas that lack the political influence to stop them.

To elevate environmental concerns, Brookings called for legally binding community benefit agreements, or CBAs, as an alternative to informal negotiations and undisclosed development contracts for data centers.

The agreement, the report said, should define costs, subsidies, and tax revenues, while setting enforceable commitments for jobs, electricity and water use, and pollution.

“Well-crafted community benefit agreements can address public concerns and mitigate known problems of data centers,” Brookings wrote. “Greater transparency on each of these fronts would help assuage the worries of the American public.”