Key Takeaways:
- At least 25 data center projects were canceled in 2025 due to local opposition, accounting for 4.7 gigawatts of electricity demand
- The number of cancellations quadrupled over the past year, with 21 of the 25 cancellations occurring in the second half of 2025
- Data centers have a significant impact on local communities, including water shortages, soaring electricity prices, and air pollution
- Local opposition is driving policy action, with states like Minnesota and New York passing laws to limit data center energy and water consumption
- The data center buildout could be a tipping point in the political landscape, with some politicians starting to take notice of the issue
Introduction to the Data Center Controversy
The data center industry has been experiencing a gold rush in recent years, with tech companies and the U.S. government investing trillions of dollars in data center infrastructure. However, this growth has not come without controversy. According to research from intelligence platform Heatmap Pro, at least 25 data center projects were canceled in 2025 due to opposition from local communities. As stated in the report, "the rise in cancellations is reflective of souring sentiment against the data center gold rush and increasing local backlash." This number may seem small compared to the overall demand for data centers, but it represents a significant increase from previous years, with only six project cancellations in 2024 and two in 2023.
The Impact of Data Centers on Local Communities
The impact of data centers on local communities is a major concern. Data centers require massive amounts of energy to operate, which can put a strain on the local power grid and resources. As a result, people living in close proximity to data centers have reported water shortages and soaring electricity prices. According to a Bloomberg report, people living in areas near data centers saw their electricity bill jump 267% compared to five years before. Furthermore, data centers can also have an adverse effect on the health of the local community, with a recent study by the Environmental Data & Governance Initiative finding that those living within 1 mile of an EPA-regulated data center were breathing air pollution at levels above the national average. As the report notes, "the increasingly negative news about such projects helped make Americans more aware of what happens when a data center comes to town, and could have assisted the rise in local opposition."
The Rise of Local Opposition
The rise of local opposition to data centers is driving policy action. According to Heatmap, 770 data center projects are planned, and at least 99 are being contested by local activists or residents. The report found that water use was the biggest reason for local opposition, mentioned in more than 40% of the contested projects, followed by energy consumption and higher electricity prices. Some experts say that the pressure data centers put on the local grid can cause it to exceed load capacity, increasing the risk of winter blackouts in places with a high concentration of data centers. As Peter Freed, Meta’s former director of energy strategy, stated, "about 40% of data centers that face sustained local opposition are eventually canceled." Additionally, Freed expects only about 10% of the projects that are currently underway to ever be completed.
Policy Action and Political Implications
The data center buildout could be a tipping point in the political landscape. In response to the growing opposition, some states are taking action to limit the energy and water consumption of data centers. For example, Minnesota passed state laws to limit data center energy and water consumption, and New York Gov. Kathy Hochul is expected to propose an "Energy NY Development" program that will have data center companies pay more for electricity. As the report notes, "the opposition is also driving some policy action." Furthermore, the issue is starting to gain attention from politicians, with President Trump stating on Truth Social, "I never want Americans to pay higher Electricity bills because of Data Centers." Hours later, Microsoft announced a five-point plan to minimize the local impact of its data centers, called "Community-First AI Infrastructure." The plan aims to address concerns around energy consumption, water usage, and community engagement.
Conclusion and Future Outlook
In conclusion, the data center industry is facing a significant challenge from local opposition. The impact of data centers on local communities, including water shortages, soaring electricity prices, and air pollution, is driving policy action and political implications. As the industry continues to grow, it is likely that we will see more cancellations and increased scrutiny of data center projects. As the report notes, "the gradually souring conversation around the data center buildout could be tipping the political scales." It remains to be seen how the industry will respond to these challenges and whether the growth of the data center industry will continue unabated. However, one thing is clear: the issue of data centers is no longer just a local concern, but a national issue that requires attention and action from policymakers and industry leaders alike.
https://gizmodo.com/data-center-project-cancellations-quadrupled-in-2025-as-locals-fight-back-2000709669
