Public opposition to AI infrastructure is rising

All over the country, resentment I exploded On the ever-increasing glut of server farms that have accompanied the AI ​​boom. The anger has escalated to the point that it has begun to change legislative agendas. Some states and communities are considering temporary bans on the development of entirely new data centers. And earlier this month, New York joined the club, with a bold new proposal to stop local cloud buildup in its tracks.

nNew invoice In New York State, it will impose a three-year moratorium on issuing new permits to build data centers across the state, while local regulators are given a chance to study the environmental and economic impacts the industry is having on communities. The bill’s authors, Sen. Liz Krueger and Assemblywoman Anna Kelis, described the legislation as “The strongest“It was introduced in the country.

While no statewide moratoriums have been imposed yet, local bans are spreading quickly. Several weeks before Krueger and Keles introduced their bill to the New Orleans City Council The moratorium passedpausing all construction of new data centers in the city for one year. In early January, Madison, Wisconsin, He issued a similar law After protests erupted over regional technology projects.

Similar policies have also been passed in large groups of communities throughout construction hot spots such as Georgia and Michiganas well as in many other regions throughout the country.

Environmental activists Data centers have long been targeted, but more recent concerns have come from high-profile lawmakers, tapping into widespread populist anger toward the tech industry. In the conservative state of Florida, for example, Gov. Ron DeSantis recently announced a new plan Amnesty International “Bill of Rights” Which gives local communities the right to limit the construction of new data centers.

In the liberal state of Vermont, US Senator Bernie Sanders did just that He proposed a nationwide moratorium. And in Arizona, where the political center is located Definitely mixedGov. Katie Hobbs recently said she supports it Withdraw tax incentives for the industry. Politicians even started fighting over these topics, with the governor of Mississippi Take screenshots In Sanders online on the moratorium proposal.

The political resistance comes as technology companies allocate more and more money to build infrastructure. The four biggest spenders — Amazon, Google, Meta and Microsoft — plan to spend A whopping $650 billion In capital expenditures over the next year, the vast majority will go to data center construction. More spending is Planned in the following yearsAs companies race to secure as much computing power as possible.

But the speed and scale of these projects has made them increasingly unpopular, according to recent opinion polls. A recent Echelon Insights survey It found that 46% of respondents would oppose plans to build a data center in their community, compared to 35% who would support it. Different poll Politico found that while there is significant concern about facilities, many voters have little opinion either way — making it possible that public sentiment will be swayed either way.

The industry is already spending large sums of money to try to change these numbers, at least in the areas that matter to it. In January, Financial Times I mentioned that Some of the industry’s largest data center operators were planning a “lobbying campaign” with plans to “increase ad spending and targeted engagement” targeting the communities in which they build.

Technology companies also make real concessions, e.g Planned ratepayer protection pledge This would make them responsible for providing power to any new AI data centres. But it is not clear that these measures will be enough to attract the public.

Data centers should appeal to small communities because they provide revenue without straining those communities’ limited resources, Dan Diorio of the Data Center Alliance said in a conversation with TechCrunch. If incentives are cut and companies decide not to build in those places, the revenues won’t be there either. “This is where political considerations at the state level come into play,” he said. “Are you going to restrict the communities where these companies could be of great benefit to them?”

The logic behind pressing pause

Overall, the data center moratorium is intended to give communities breathing room while policymakers weigh the potential costs and benefits of allowing such facilities to be built in their communities. the Construction rate In some states, this pace has accelerated to the point that communities are unsure how the industry will affect them in the long term.

Justin Flagg, director of communications and environmental policy in Senator Krueger’s office, told TechCrunch that the legislation was driven, in part, by what he called New York’s energy affordability crisis. The aforementioned crisis has upset ratepayers and politicians alike.

A group of 30 state legislators recently He called Governor Kathy Hochul declares an “energy emergency” in New York due to rising interest rates. While there A variety of factors In working to raise energy prices, there is consensus Growth in data centers makes the problem worse, not better.

“There is widespread dissatisfaction being expressed about energy prices,” Flagg said. “We certainly hear that constantly from our constituents, whose electricity and gas prices are rising.” He added that the local decline was also driven by environmental concerns – which he described as “the impact of water, noise and the impact of local infrastructure as well”.

In response to these network concerns, major technology companies – including… MicrosoftAnd Google and Meta and OpenAI -I promised that Paying for their additions to the electrical grid In the communities in which they operate, they often install behind-the-meter power supplies coupled with new data centers.

The Washington Post I mentioned recently Silicon Valley is increasingly looking to build its own electrical supply — a kind of “shadow grid” — that can be used to power the energy-hungry properties that now fuel the artificial intelligence industry. The strategy involves harnessing massive new private energy sources rather than relying on the public grid.

One example of this practice comes from xAI, Elon Musk’s artificial intelligence startup, which – at its massive data center location in Memphis, Tennessee, Known as “The Giant” – He built a series of methane gas turbines that were accused of polluting the local community.

The company’s efforts have already run into a major problem. xAI had It is said He told local officials that because of a legal loophole, the turbines were exempt from air quality permits. In January, E.P.A The ruling on that Musk’s company was not exempt from permits, making its previous operation illegal. Environmental activists decry the facility’s discharge of “pollution resulting from smog, soot and hazardous chemicals,” Announce Earlier this month they planned to sue the company over it. Musk’s facility has since commissioned its turbines.

As the xAI example shows, if a “shadow network” strategy aims to solve one problem (public network overload), it threatens to create a host of new problems – with environmental activists and local communities alike. Expressing concern To find out how new facilities can spread pollution into people’s backyards.

At the federal level, the Trump administration — which has made artificial intelligence one of its top priorities — has also sought to cast the industry as responsible stewards of the communities in which they build. Indeed, Trump officials did so I introduced a default policy To force AI companies to absorb the costs of their additions to local electricity grids, although the details of this policy remain vague.

Controversy over taxes

For many years, communities have incentivized data center development through tax breaks. last summer, CNBC analysis It found that 42 states across the US either have no sales tax or offer full or partial sales tax exemptions for technology companies. Of that number, about 16 states have publicly announced the amounts they have given businesses through tax breaks. The outlet wrote that confiscated revenues amounted to about $6 billion over five years.

But now, more and more states are considering turning off the spigot. In Georgia, for example, A variety of bills have been introduced recently It would eliminate the benefits of the industry. State Senator Matt Brass, who introduced the bill That would eliminate the server sales tax exemptionHe told TechCrunch he doesn’t think tech companies need the extra money, and he doesn’t think doing away with the benefit will discourage them from doing business in the state. “In Georgia, if you compare us to other states, our property taxes are low, our property values ​​are low, and our overall tax burden is low,” Brass said. “So, you know, our overall business climate is good. That should be the attraction.”

Brass, who chairs the state Rules Committee, told TechCrunch he expects there will be significant support for his policy. The Georgia Legislature passed similar legislation in 2024, but the governor vetoed it. Brass added that if the exemption were eliminated, he believes it could generate hundreds of millions of dollars for the state.

In Ohio, a similar political battle is currently taking place. A group of Democratic lawmakers recently Legislation introduced This would – as in Georgia – move toward eliminating the state’s sales tax exemption. A similar policy was introduced last year, but – as in Georgia – was defeated by the state’s governor, Mike DeWine.

“The most ridiculous tax break on the books right now is for data centers,” one of the lawmakers supporting the bill, state Sen. Kent Smith, said. He said recently. “This tax break must end, to the benefit of everyone who has an electric bill.”

Meanwhile, there are still plenty of lawmakers who support a tax break on server sales. In Colorado, state representative Alex Valdez Recently introduced a bill This would keep data centers vulnerable for the next 20 years. Valdez told TechCrunch that the exemption is just a carrot to get tech companies in the door. Once they establish a base of operations in the state, they become a source of passive income that inevitably bounces back to benefit the communities in which they operate, he said.