The major artificial intelligence companies’ prime directive to literally bulldoze AI infrastructure into states with minimal regulation has produced citizen-led, bipartisan demands for local and national moratoriums on data center siting. While the Trump administration is doing everything it can to facilitate the only capital spending with a pulse in the economy, these calls for moratoriums are growing, and connecting with local successes in blocking data center construction.
Sen. Bernie Sanders (I-VT) recently called for a national moratorium on the construction of data centers that are “powering this unregulated sprint to develop and deploy AI.” Sanders did credit “the transformative power of AI and robotics” before calling out Elon Musk, Mark Zuckerberg, Peter Thiel, and Bill Gates with a simple question: “Are these multibillionaires staying up nights worrying about what AI and robotics will do to the working families of our country and the world?” The answer would be mostly no.
Over 230 organizations across the 50 states signed on to a letter to members of Congress organized by Food & Water Watch, a national advocacy group, also calling for a national moratorium on data center siting and construction. The letter characterized generative AI and crypto as generational threats.
But it’s the local rejections of data centers—in places as varied as Chandler, Arizona, and Leesburg, Indiana—that should have the tech oligarchs worried. These results demonstrate that Americans are beginning to grasp the downsides of inserting AI into every facet of daily life. This mushrooming grassroots backlash promises to dominate American politics in 2026.
The fallout from siting these gargantuan facilities near human habitats continues to convulse communities. Residential ratepayers are already grappling with electricity price spikes and see data centers as a major driver of the pain. Power demand from data centers will hit 106 gigawatts by 2035, according to an analysis from BloombergNEF. A Yale Clean Energy Forum report estimates that data centers could take up as much as 12 percent of total U.S. power consumption by 2028, a higher demand than all manufacturing of steel, aluminum, and other high-intensity manufactured goods combined. “Electricity is the new price of eggs,” one industry analyst told The New York Times, and if you’re concerned about electricity, you have to be concerned about data centers.
Since 2019, at least 40 states—both Republican and Democratic—have passed nearly 150 laws aiming to regulate AI and address known harms.
Data centers are also guzzling city-sized amounts of water. By 2028, they’ll require up to 720 billion gallons of water every year to keep servers cool—usage would fill one million Olympic-size swimming pools or furnish water for the interior-home uses of 18.5 million American households.
In Loudoun County, Virginia, which has the largest concentration of data centers in the region that represents the world’s largest data hub, data center expansions have collided with the climate crisis, leading to scrambles from local government to address the “negative impacts on neighborhoods.” While the county wants to find environmental solutions that would reduce the burden on residents while still building the data centers, local elections in Loudoun County and throughout Virginia in November saw candidates who rejected data centers emerging victorious.
Even residents in the fresh water–rich Great Lakes states have raised questions about increased data center usage. Illinois also has one of the highest concentrations of data centers in the country, and local officials and environmentalists have raised alarms that siting decisions don’t always take into consideration how local drinking water needs can clash with data center cooling demands.
Georgia, Alabama, and Florida have actually had “water wars.” In April, a federal judge ruled against Alabama in a dispute with Georgia over Army Corps of Engineers water allocations to metro Atlanta from Lake Allatoona, a northwest Georgia reservoir. Data center projects could complicate those interstate dynamics. NPR affiliate WABE reported that Chattahoochee Riverkeeper, which monitors the river running from North Georgia through Atlanta to Florida, tracks water usage plans for new data centers in the region. One facility, Coweta County’s Project Sail, would use nearly ten million gallons daily, which adds up to one-third of the county’s daily usage from the river.
DATA CENTER DEVELOPERS have been exceptionally skilled at persuading local leaders of their value to communities by touting gains like temporary construction jobs. (There are few on-site permanent jobs.) Unlike what’s transpired in Northern Virginia, where county officials hand out tax credits but still haul in millions in tax revenues, some recent data center projects are steering away from generous agreements with local communities. Instead, project officials focus on tax credits, obscure the details, force officials to sign nondisclosure agreements (NDAs), and never divulge their supernova clients to the public.
Most residents are hard-pressed to fight corporate secrecy. The New York Times recently spotlighted Doña Ana County, New Mexico, a predominantly Latino community of 15,000. The data center developer for Project Jupiter, a multibillion-dollar component of the $500 billion SoftBank- and OpenAI-led Stargate Project, got to know the locals, but the underlying clients remained unknown because county officials had signed NDAs. Residents only found out after the project moved forward that the heavy hitters included OpenAI and Oracle.
Instead of property tax revenues, the county will see a payment in lieu of taxes (PILOT) program, which essentially allow companies to decide how much—or how little—money they’re willing to offer a community. But this trick isn’t having much staying power. Data Center Watch, coordinated by 10a Labs, an applied research and technology company specializing in AI security, reports that in the second quarter of 2025, data center opponents slowed the roll or thwarted projects totaling about $100 billion—more than the total of every quarter since 2023. In one three-month period, 20 projects fell through.
That includes a project in Chandler, a Phoenix suburb, where Arizona’s former Sen. Kyrsten Sinema personally lobbied at local meetings for a 422,000-square-foot data center plan operated by Active Infrastructure, a hyperscale data center developer. In the end, the Chandler City Council voted against the data center unanimously. In rural Leesburg, Indiana, the town council refused to rezone land for industrial use to build a data center on 554 acres. “I’m really just trying to speak out for the future of agriculture, and passing a data center is not the future of agriculture,” said one local resident.
The possibility that a facility might be rejected has affected data center financing. In Michigan, Blue Owl Capital, a private credit firm, pulled out of a $10 billion data center deal with Oracle amid “shifting market sentiment around enormous AI spending” and concerns that “the Saline Township site … might face delays.”
Elsewhere in Michigan, data center opponents rallied in Lansing last week and called for “no secret deals” between local governments, utilities, and data center developers. At the gathering, Attorney General Dana Nessel demanded that the state’s public utility commission step back from fast-tracking a major utility project to power the Saline Township project. Anthony Hudson, a Republican gubernatorial candidate who attended the protest, mostly agreed with Nessel. A pair of state lawmakers, one a Democrat and the other a Republican, have teamed up to propose reversing tax breaks for large data center facilities. But residents want a statewide moratorium.
SINCE 2019, AT LEAST 40 STATES—both Republican and Democratic—have passed nearly 150 laws aiming to regulate AI and address known harms.
Unfortunately, federal regulation has lagged miles behind the internet revolution. The Senate did manage to stave off, by a vote of 99-to-1, a White House–endorsed attempt to prohibit states from passing AI regulations for ten years. The prohibition on state AI regulation came up again in the annual defense policy bill and was again beaten back. But even though that proposal generated outrage, the major overstep into state regulatory authority hasn’t motivated Republicans to fill in the blanks.
President Trump has seized on that inertia to issue more than half a dozen AI executive orders this year, the latest coming in mid-December complete with plans for a litigation task force and an annual evaluation of state laws determined to obliterate any opposition to AI usage or data center expansion.
The Brennan Center has labeled that move “little more than political theater.” Executive orders do not invest the federal government with the powers to file lawsuits. So federal officials cannot “directly enforce” the order through court action. “To challenge a state AI regulation in court,” writes Gowri Ramachandran, the director of elections and security in the center’s elections and government program, “the department would need to base the lawsuit on a federal statute or constitutional provision—not simply on the executive order itself.”
Combine data center moratorium drama with the gutting of the Affordable Care Act, the nothing-to-see-here response to the affordability crisis, and extortionate trade tactics, and the White House and congressional Republicans have set themselves and everyone else up for a very dismal New Year. But despite their best efforts, local initiatives to stop the plowing over of homes and farms and businesses with giant warehouses of servers and chips will continue—and they’re starting to have an impact on the AI transition.