People Hate Data Centers. Does it Matter?

Few things in public opinion have swung as hard and as fast as opposition to data centers. According to recent polling, more Americans would prefer to live next to a nuclear power plant than an AI data center, and the trendlines against data centers cross demographic and political lines: strong majorities of young people, older adults, Republicans, and Democrats oppose data center construction near them.

Politicians are taking note, with officials across the spectrum adopting increasingly aggressive stances against data centers, from official state moratoria to de facto prohibitions to renewed momentum for a nationwide pause on data center construction.

But data center construction is now a meaningful part of the entire US economy: Harvard economist Jason Furman estimated last year that US GDP growth would be a mere 0.1% without the data center boost.

Today’s letter will not look at the merits of data center pushback, but instead ask, “How much does it actually matter?” That is, how impactful will the public opposition to data centers be on the real estate industry, the global economy, and on AI development itself?

I’ll also share my biggest concern with the data center pushback — a second-order effect that everyone is sleeping on, which has nothing to do with AI or data centers at all.

The Panic

Before we get into any potential legislation and its impact, it’s worth reiterating that data center opposition is significant and real. It is difficult to find any construction project that the public is less excited about than a data center.